I don't think you should invest anything until you either understand what you're doing on some level yourself or have hired someone to help you make those decisions.

Seconded. My rule is, if I don't think I understand it well enough to explain it to someone else, I don't do it.

How about for an annuity I won't see the contents of for another 20 years?

In this class I'm taking this semester, every example we did on annuities was 6 or 6.5%, which may not mean anything, but I've found that the examples are usually based on current available data (the book we're using was published less than a year ago).

The other good thing about a Roth IRA is that you can take out the principal without penalty, so you can use it for a house downpayment or a trip around the world.

Also, use your credit card and pay it off each month. It will really help your credit score when you get to the point when you want to buy something. Just my two cents.

Oh, I do that now that I have a real credit card. The last payment on the other credit card was $1.50. In 2003. But it was totally on time!

Also, I'm buying both those books you recommended.

...from the Amazon Marketplace, because it saves a few bucks. I CAN'T HELP IT.

I won't be able to touch any of my savings for...let's see...another 27 years. That's the downside. The upside is how much my money will have compounded by the time I finally can. Yes, Virginia, there really is retirement.

ING also has 5.2% 12 month CDs.

Also, Ginger, I did *not* know that about the Roth IRAs. Thanks for the info!

PC I want to thank you for starting this conversation about money. I'm terrible about my money and have been barely scraping by pay check to pay check with no savings. (Although I hav eput some in everytime I check my checking balance the money is right there and I tend to spend it). After reading all this I think I'll open a savings account with ING and check into the automatic transfer thing now that I have a raise.

I know the one thing I need to do is start investing independent of my 401(k). While it is doing quite well, it's all with Fidelity. And while Fidelity is a pretty damn good set of funds to be in, it's only one company of funds and feels like I'm putting all my eggs in one basket. I need to branch out more, but that would require being more disciplined in my savings than I am right now. At least with the 401(k) it's "out of sight, out of mind" savings that I can rely on.

eta: pronouns.

You're welcome, askye! I'm glad someone else got something out of this.

Hm. Hold on a second, I think I found the catch! Bank of America sez:

When you transfer funds to or from accounts you own at other financial institutions, these transfers cannot be reversed. There are daily and monthly limits to the transactions, depending on the delivery type you choose. You will be charged a fee for outbound transfers: $3 for three-business-day processing or $10 for next-business-day processing.

So it's...not as convenient, technically, but the eightfold jump in interest is worth it. It might be worth it to keep a small chunk in the BOA savings for easy access?