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wedding fund
Old 05-08-2011, 07:38 PM   #1
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wedding fund

I have $30,000 sitting in a "wedding fund" for one of my daughters. What would be the best plan for investment, assuming I probably would need to use it in the next 5-7 years? Currently, it is sitting in a newly opened Fidelity money market account.

Thanks.
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Old 05-09-2011, 02:40 AM   #2
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Offer your daughter 1/2 if she elopes.

Sorry I couldn't resist, but you got to admit it is much better investment....
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Old 05-09-2011, 07:04 AM   #3
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Offer your daughter 1/2 if she elopes.

Sorry I couldn't resist, but you got to admit it is much better investment....
+1. I was going to suggest a negotiated settlement.
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Old 05-09-2011, 07:10 AM   #4
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With a short timeframe, and such current low interest rates, whatever safe option you choose won't yield much in actual interest payments. To maximize whatever interest you can, and still be safe, 1, 2 and 3 year CD's will pay a tad more than current money market rates.
Perhaps some short term US bond funds would pay a bit more without much risk, but I'd stick with CD's for this purpose.
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Old 05-09-2011, 07:14 AM   #5
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Offer your daughter 1/2 if she elopes.

Sorry I couldn't resist, but you got to admit it is much better investment....
Or just offer the $30K to do as she pleases in planning her wedding, and she gets to keep any balance - for honeymoon, starting out expenses, etc. Then you make the generous contribution you wanted to and she can choose how lavishly (or not) to spend on the various details - venue, dress, cake, flowers, etc. She then has a reasonable budget to select what's really important to her for the ocassion - with some personal incentive to keep an eye on value.

As for you original question, FWIW, I'd suggest CDs in that range (5-7 years) that don't hit you too hard on interest penalty for early withdrawal should you need the money a bit earlier than planned. There doesn't seem to be much better at the moment that you can be confident of preserving/returning your principal in that time range.
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Old 05-09-2011, 07:19 AM   #6
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Or just offer the $30K to do as she pleases in planning her wedding, and she gets to keep any balance - for honeymoon, starting out expenses, etc. Then you make the generous contribution you wanted to and she can choose how lavishly (or not) to spend on the various details - venue, dress, cake, flowers, etc. She then has a reasonable budget to select what's really important to her for the ocassion - with some personal incentive to keep an eye on value.
I like that idea. Who other than the bride can better plan a wedding. If mom or dad does it they will likely impose their own views about what is good and bad.
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Old 05-09-2011, 07:20 AM   #7
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Offer your daughter 1/2 if she elopes.

Sorry I couldn't resist, but you got to admit it is much better investment....
+2

I think we spent $1,500 on our wedding and spent double or triple that going to Hawaii. If we had to do it over again, we'd apply the $1,500 toward an extra two weeks of Honeymoon.
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Old 05-09-2011, 07:29 AM   #8
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What would be the best plan for investment, assuming I probably would need to use it in the next 5-7 years?
What's more important to you? Taking a shot at growing that $30K into something larger or giving your daughter at least that much? 5 to 7 years is probably the inside edge for what I'd consider a long enough time horizon to put money at risk. So you could invest that cash in a mix of stock and bond funds, maybe 50/50 and hope for the best. In all likelihood, in seven years, that money will have grown to something larger. But then you'll have to figure out how to transition that money to something safer as D-Day approaches.

A safer option is to just stick that cash in a 5-yr Alley CD, currently yielding 2.4%. They have low penalties on early withdrawal so if rates go up and you want to grab more yield, or if your daughter gets married earlier than you plan, you can get to your money inexpensively. It's a better option than a money market fund and a safer option than either a bond or stock fund. This is the choice I'd probably make.
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Old 05-09-2011, 08:34 AM   #9
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I think it depends greatly on your daughter who will be wedded and you. How much did you put into your other daughter(s) wedding? I would give your daughter to be wedded the approximately the same amount adjusted for inflation.

Is your daughter who always ask what have you done for me lately kind or always remember you for your sacrifices and generosity? If she's latter, I'll just give her the money and not worry about it.
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wedding planning ongoing....
Old 05-09-2011, 04:07 PM   #10
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wedding planning ongoing....

Many thanks for the suggestions that have been given. I have been going back and forth as to the best option....stocks, mutual funds, CD's, etc.

We are in the midst of getting ready for daughter #1's wedding this summer. Our budget was $30,000, but I suspect (final tally TBD) we will be over...and unfortunately, I am not sure by how much.

Anway....I went ahead and stuck $30,000 into a Fidelity account, so that it would get sucked into current household expenses and so that it might grow some over the next 5-7 years. Who knows....daughter #2 might meet someone and get engaged much sooner than that.
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Old 05-09-2011, 04:16 PM   #11
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oops....I meant "would NOT"
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Old 05-09-2011, 07:05 PM   #12
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I have $30,000 sitting in a "wedding fund" for one of my daughters. What would be the best plan for investment, assuming I probably would need to use it in the next 5-7 years? Currently, it is sitting in a newly opened Fidelity money market account.

Thanks.
Um...do you adopt?

Just kidding. I am a frugal gal who had to pay 1/2 the cost for my one and only wedding, with the other 1/2 paid by the groom. Not a gripe, just a fact. We kept it very low cost and had a ball. I bought my wedding gown in the JC Penny catalog and looked marvelous.
I would humbly suggest that a newly married couple would be better off spending that kind of cash for starting out living costs more than they need a designer gown, 8 attendants, a 4 story wedding cake, a professional videographer and a lavish honeymoon.
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Old 05-09-2011, 07:32 PM   #13
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Um...do you adopt?

Just kidding. I am a frugal gal who had to pay 1/2 the cost for my one and only wedding, with the other 1/2 paid by the groom. Not a gripe, just a fact. We kept it very low cost and had a ball. I bought my wedding gown in the JC Penny catalog and looked marvelous.
I would humbly suggest that a newly married couple would be better off spending that kind of cash for starting out living costs more than they need a designer gown, 8 attendants, a 4 story wedding cake, a professional videographer and a lavish honeymoon.

I totally agree! I offered my first daughter the $30,000. She could have had a small family wedding, and use the rest for down payment on a house, which at this time, could be had for a good price. She turned it down! To spend all that money for one evening....the whole idea is perpetuated by mothers to daughters, IMO.
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Old 05-10-2011, 04:19 AM   #14
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When we planned our wedding it was our understanding that we would finance it all on our own and would get some financial wedding gift from my parents (DH's parents died early). As my parents never lived large, we did not expect much.
We had a great party (no debt necessary, down payment for house still intact), just some very reasonable compromises with both sides family had to be made, everybody was happy.
When my mom learned later how small the costs of the event actually were she + dad sent us a check for all of it.

Not all mothers have the idea of a cinderella wedding nor pass it down to their daughters.
But if your wife made your wedding a cinderella wedding, maybe it is time to start saving for your daughters wedding...
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