MARMAC

Let’s say you have $20,000 to invest. Maybe it’s sitting right now in a retirement account at work, and you think you might want to be more aggressive with the way in which you invest it—or some of it. Maybe you’ve just gotten an inheritance or a huge raise at a new job. Maybe you’ve just had this money sitting in a savings account, have felt for a long time that you could do more with it than leave it in that savings account, and suddenly decide: Now’s the time. Whatever the case, let’s say it’s $20,000, but it can in reality be more or even much less. Let’s see how to invest it.
So that you can get used to the investment waters, rather than investing 100 percent of it all at once, I want you to divide it up and start investing slowly over the first year, to see how it makes you feel. The chances, I think, are good that by the end of the first year you’ll be ready to plunge in.
Take 80 percent of what you have to invest, which in our example is $16,000, and put that money in a Treasury bill or note, or just leave it in your money-market fund, anywhere it will be kept safe for you for about a year. After that year is up, it will be up to you if you want to keep investing it so safely, invest more on your own, or if you want some professional help in investing it. Your inner voice will tell you which is best for you. Trust yourself.
If these are not funds you are investing within a retirement account, the best way to buy a Treasury bill or note is by contacting the Federal Reserve office nearest you and setting up what is called a Treasury direct account. This is where you buy your Treasuries directly from the Federal Reserve absolutely free of charge. You could also, if you wanted, buy your Treasuries from a broker, either a discount or full-service broker; but this would cost you about $30, and why spend $30 if you don’t have to? The other reason to buy your Treasuries directly is to get used to them and the way they work (they’re simple!). When it comes time to stop investing for growth, many people transfer some or all of their money from the market into Treasuries and draw the money they need to live on from the interest. This might be part of your overall plan, too, and it’s a great idea to become familiar with how they work right now.
So $16,000, or 80 percent, goes into Treasuries or is just kept safe. The other 20 percent, in this case $4,000, is what you’re going to invest in the market.