Investopedia/Richard Roush: What are the best investment options for a short-term, two-year investment if I want to grow my money to pay off my student debt?

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What are the best investment options for a short-term, two-year investment if I want to grow my money to pay off my student debt?
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I have a good amount of student loan debt. But, I have saved up about $10,000. I want to try and grow that money through investments and have enough to pay off the debt completely in about two years. What kind of approach or investments should I consider for this situation?
Debt, Investing
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3 days ago
Richard Roush
Roush, Richard
Fresno, CA
www.roushinvestments.com/

With a two-year time horizon, it is usually not recommended to invest the assets in anything other than CDs or savings accounts.  However, the yield on these instruments will probably be less than the loan is currently accruing at.  It would be my advice to take those funds and apply them to the loans now.  If it does not cover all of them then apply it to the ones with the highest interest rate first.
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Yesterday
Rosemary Frank
Frank, Rosemary
Brentwood, TN
rosemaryfrank.com/

You don't say if you are still a student or if you are in repayment mode. If still a student, then I suggest remaining safe and put the money into the best CD you can find. Your time window is really too short to take on any investment risk. If you are repaying at this time, and your interest rate is more that what you could earn with a CD, which it most likely is, then simply apply your savings to the debt now. For instance, if your interest rate is 7%, by reducing the debt by $10,000 you will have effectively just "made" 7% on your money. Through it all, keep in mind the necessity of always having an emergency fund. If this is your only savings, I do not recommend tying it up in a CD or using it to pay off debt, as you really do need to keep it accessible.
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3 days ago
Andrew Rosen
Rosen, Andrew
Wilmington, DE
lifelongadvisors.com/

Cash is your answer unfortunately.  If your time horizon is 2 years and it is for debt payoff I recommend nothing except cash. There are high yield savings accounts like the one at live oak bank which I am a fan of.  These today are paying 2% interest which is excellent.  I just think the risk is too high and the importance of getting these loans paid off is too great for you to start taking equity risk with it.  Just think the equity markets are off like 10% this month alone.  I wouldn't be concerned if long term investments but for something this short term you have to play it safe.
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4 days ago
Joe Arns
Arns, Joe
Princeton, NJ
nwcriterion.com

Keep in mind that all stock portfolio can only be expected to return 7-9% annually right now.  And that's simply an expectation.  It is possible for an all-stock portfolio to lose nearly half of its value over a two-year period.  If your timeframe is limited to 2 years, the best strategy is simply to take the $10K and pay down the loans with the highest interest rate.
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5 days ago
Levi Sanchez
Sanchez, Levi
Seattle, WA
millennialwealthllc.com

2 years is a short amount of time in the investment world and I'd be hesitant to invest in equities with that short of a time frame. Markets are unpredictable in the short term. Instead, you may consider looking at CD's or a high yield savings account. As interest rates have continued to rise, high yield savings are starting to pay increasingly higher interest rates (1.95% was highest I could find at time of this answer). They're FDIC insured as well.

Best,
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