Okay, these two are probably not at all related, but they are the two things my husband and I are currently looking into to diversify our investments. If I understand them right, there is more risk in the mutual funds but you may be able to get to your money faster and/or with less penalties if you need it?

Yep. CD's get locked in for months at a time. They may earn higher interest, but are less fluid. A money market does fluctuate in price (and I suppose you could wind up the loser in the scenario), but either one tends to remain within 1-2% of each other. If you don't mind keeping your funds tied up for a little bit, you might consider looking into Tax certificates - these are guaranteed (although there is a learning curve) and can result in 14-50% return on your investment.

Benji, I'm not familiar with Tax Certificates is there somewhere in particular I can read up on these? A 14% return doesn't sound half bad, and we are expecting to tie up quite a bit of our investment funds, at least for right now.

The way tax certificates work is that you are paying off someone elses property taxes. They need to repay you and the government is happy to let you become the collection agency for repayment. The property owner has a vested interest in paying you back (with high interest). If they don't you may have claim to their property (usually after two years non-payment on property taxes). This is a guaranteed return with possible property residuals.

Google this subject for more information. Banks use tax certificates all the time to raise capital. So, they borrow your money and offer you 4-6% while they use your money to purchase tax certificates that result in 14-50% return - that's probably why they don't tell you about this investment opportunity.

I think of these two in terms of easy cash or not. I suppose in my mind I think of CDs as short term savings tools that are off limits because of the penalties. Mutual funds have no penalties so can be cashed in at any time.

I don't think I ever thought of CD's as short term. Thanks for putting that into my head. Now I'm wondering how little I can get into CD's for. Is it worth it to invest $500 in a CD and is it even possible.

We are living on a public school teacher's salary, so we save by penny not by dollar - but we are saving, and I'm always looking for ways to make the money grow faster!

I'm so glad that you brought this up. I was reading last night on these things and got myself completely lost. We have next to nothing available to invest but I want to get something started and I thought that these might be a good place to start but I have no clue how you go about investing in them and the sights that I looked at were less than helpful.

Everything that I'm looking at says $1000 minimum and I don't have that and odds are I won't have that for a very long time. Are there other things out there that don't require a mega start up amount?

It depends on what kind of liquidity you want. Do you want to put in for the short term or long term. Mutual fund can be very good or very bad in the very short term.