What to do with 50k from house sale?

[AirplaneGuy]

My Girlfriend and I moved in, and she has about 50k from the equity in her house now sitting in her savings account. Obviously this isn't ideal since its making next to nothing in interest.

The plan is to invest 10k for college of her child. (he's 4 now -and a ton of fun)
The 40k will be used (or a portion of it) when we build a new house in about 3-5 years.

We've been looking at an ING Mutual fund account, and putting the 40k in ING balanced fund (IDBAX), and the 10k in strategic growth fund (IDSGX).

Thoughts? We don't need this money for anything for a few years 3-5, and we want, like everyone, this money to work for us and to grow.

Thoughts?
AirplaneGuy

 

[JohnDoe]

Stay away from ING as their expense ratios are ridiculous. Just look at the two funds you mentioned - both well over 1%.

As most will recommend on here, look into Fidelity and Vanguard. With a 3-5 year time frame, I wouldn't get too aggressive with this money. For starters, I would move it a money market fund once you choose a brokerage.

If you are going to invest 10k all at once for college, then you'll want a 529.

HTH,
JD

 

[maddythebeagle]

If you dont max out a 401k type plan, I would suggest that first and spend down the cash and keep some for an emergency fund, etc. and worry about the cash needed in 3-5 years..

 

[AirplaneGuy]

We've got the emergency fund already taken care of outside of this money.

Ah, I almost forgot about setting up a 529 plan. I'll have to dig into that.

I'll look into some of the fidelity / vanguard funds.

 

[Brat]

Oakmark Income (OAKBX) has been steady on it's feet this year. Closed to all investors except for those who buy direct from the fund. After you purchase it you can transfer it to Fidelity.

 

[brewer12345]

If your plans are reasonably firm re: building a house in a few years, I would buy a CD or find a nice Muni bond maturing in that time frame. You could well take a beating in 3 years in a fund with significant equity market exposure. If your plans are more nebulous, you could do worse then Vanguard STAR or Wellington.