If my business has an extra $2K, what would be the best 1 year investment?
What would be a good way to make some money on this $2K over the next year that is fairly safe (no stocks)?
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M$4 Answers
All in all, $2k is not very much as far as investments go. If you want to make sure none of the principle can be lost, you should look into things such as high interest savings accounts (e.g. via Ing Direct, HSBC, etc.) or a Certificate of Deposit (CD). These have the advantage of being insured by the FDIC, and you know in advance exactly what interest you will get.
One step less safe, but still very safe is a bank money market account, which is still FDIC insured.
Next step, a money market fund from a respected mutual fund company such as T. Rowe Price, Vanguard, etc.
Finally, since you want to avoid anything involved in stocks, you could invest it in a bond mutual fund. Mutual funds provide you with active management to identify good opportunities, a high level of diversification, and convenience in investing and withdrawing the money. Keep in mind however that bond funds (as well as bonds) can lose value, if e.g. the market interest rates go up. Bonds are only guaranteed if the issuer does not default, and if you hold them to maturity. If you sell before maturity you could get back more or less than you invested.
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M$You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$personal opinion
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M$@catt969: Seeing as though there are only three employees (one being me), I already "invest" in them. Also, this doesn't answer the financial question, but does answer a management question.
@opher: Yes... non-profits don't worry much (if at all) about tax benefits.
I'm not sure a non-profit would get any further tax benefit, though higher employee retention and improved productivity could make this a reasonable move. However, the question seems to indicate @drmatt is seeking advice on possible financial investments.
yes I agree. that is why I almost didn't answer. but I did. forgive me. and good luck
What then could you do with those funds?
Consider pre-paying certain suppliers. If your non-profit has certain services for which you pay a monthly fee, find out if they offer discounts for paying several months in advance. Many do, such as, VoIP, cell service, broadband, etc. These discounts can sometimes be significant, 10%-33% off monthly rates. I can assure you that you will not find a traditional investment vehicle that will offer you the equivalence of what you would save in those discounts as premium on a rate of return.
Using this same "out of the box" mentality, you may want to consider paying for preventative maintenance on any equipment used by your organization. Preventative maintenance today can surely spare your non-profit from having to pay more later for repairs.
Without knowledge of specifics for your organization it is difficult to offer more detailed suggestions. Basically, look more towards leveraging your $2000 for the purpose of lowering expenses that you would normally incur during the course of the year. You will get more benefit out those funds that way than a one year, low risk investment vehicle.
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M$