How should I invest $20,000? I just moved to the U.S. Should I invest in CDs, and some in stocks?

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‘I’ve applied for a master's program and want to fill out a Free Application for Federal Student Aid.'

Dear Quentin, I’ve just moved to the U.S. to join my family, and I have about $20,000 in my bank account, and I’m not sure how to invest it. I have no need for the money at the moment, but I’ve applied for a master’s program and want to fill out a Free Application for Federal Student Aid form.

Should I use some of the money I have to pay the interest on the financial-aid loan throughout the two years of school, or should I invest part of it in CDs and part in stocks? How should I invest my money for the next 2-5 years?Dear New Immigrant, Congratulations on saving $20,000, and on the forthcoming addition to your family. And as one immigrant to another: Welcome to America.

If you are purchasing a home in the near-term, you don’t have time to be aggressive, says Robert Seltzer, founder of Seltzer Business Management in Los Angeles, Calif. “Invest most if not all of that nest egg in fixed-income investments. Money markets at brokerage firms offer liquidity, flexibility, and rates above 4%. However, if none of this money is considered as an emergency fund, but is designated for a home purchase, invest in treasuries.

You may need to set aside some cash for your education. U.S. citizens have access to federal student aid, but non-U.S. immigrants have less access to federal aid. You can read more on that here. “The FAFSA asks families to report their income, as well as certain assets like college savings plans and brokerage accounts,” my colleague, Jillian Berman, deputy enterprise editor at MarketWatch, recently wrote.

 

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