if you have 400,000 how would you use it to generate more money?

Question

regardless of whether fast or slow time consuming, and no banks please, interest rate too low although steady.

Answer 1

The best way for you to invest depends on a lot of things.

First, if you don't have an emergency fund worth 3-6 months of expenses, establish one first, maybe in a money market fund so you can get at it in an emergency. It won't pay back much, but it's better than having to borrow money in an emergency and getting into debt because your money is locked up. Nor do you want to sell your investments during a temporary downturn to pay for something like a new roof. Then you'll have lost that money permanently.

Next, if you haven't done the 401(k) thing and the IRA thing, do it. Tax-free or taxed deferred savings are good.

Finally, if you've already done all those things and still have $400K left to invest, there's still more stuff to think about. Long term, stocks will grow faster than anything else, but can be very risky short term. They're a terrific investment if you're young and have a long time line. If you're older, you have to think more about safer investments, because you don't have as much time to recover from a downturn in the market.

Anyway, there is no "best" way to invest a sum of money. What's best depends on a lot of different circumstances. If you really want a good investment, go buy a book on investing so you can decide what makes sense for you. Sure, you could give your money to a financial advisor but how do you know he's not just in it for the fees and commissions he charges you? How do you know his advice is any good? You need at least a foundation so you can make an informed decision. Personally, I like "The Only Investing Guide You'll Ever Need" by Andrew Tobias. It'll give you the basics. Good luck.

Answer 2

Put all of the money initially in relatively low risk funds (gov bonds, muni’s). Then every 6 months or 12 put the 2 times the earnings in well selected stock funds. That way assuming the risk in the stock funds should not be more than 50% (that is not a rule but a relatively safe assumption) you will never go “under water”. Bond funds also have some risk associated but not if you decide to stay for the long run.
With this strategy with the time you will put more and more money in assets earning more and more.
Basically at any one time you should put your total of investable money (TIM) minus 400k x2 (or all of it after TIM is > 800k) into stock funds.

Selecting good bonds and stock funds is a whole separate science but sites like Morningstar.com with there simplified “stars” rating can help you.

Answer 3

Get a high yield money market fund or three. Spread out your money amongst them. Most of them are paying 4.5%, I just signed up for a Citibank E-Savings account (which is a money market fund) that's giving me 5%. For every $100,000, you'll make $5k a year assuming the divident rates hold up. @ a $400k investment, that's $20k a year. Let that money sit, and in ten years you'll have $650,000. In 30 years you'll have $1.7 million. That is the safest way to invest while retaining instant access to your money. You may also want to think about investing in an international mutual fund. If you don't have any qualms about investing in Chinese stocks, then invest in an mutual fund that buys heavily in Asian stocks. One thing that you MUST do is stay ahead of inflation. If you let your money sit in a savings account, you will actually lose money because the dividends payed to you don't exceed the current inflation rate. The official line on inflation is that it's at ~2%. I have been told that it is more like ~4%, the govt just isn't reporting it as such.

Answer 4

I personally would invest about half in secure div paying stocks such as CAT, MO, BAC(for example). Not only do you get somewhere of a 4% div, but you also have the possibility of stock growth. Also, some of these stock will have ever increasing div. So if you invest in a stock like MO and the div goes up then your effective div rate went up. This is a good source of regular income. Then with the other half I would see what I am comfortable with. If you are good with stocks then play some. If you are good in real estate then get into that. If you have no idea what to do with your money then I would put it in some sort of high yield account and then start doing my research. After researching you will have a better idea of what to do. If you don't want to do any research then the best way is to find a good money manager and have them help you with investing. It really depends on what you know and what you are willing to do research on.

Answer 5

I would put half into a LOFT IRA, which doubles in 20 years and play with the rest in stocks for the 20 years. If you go bust in the market, then you still have the 400,000 you a\started with and if not than you have the 400,000 plus your earnins in 20 years.

Answer 6

your open for fast or slow progresison with the growth of your money, but are ruling out banks?

a CD would be the best way. interest rates are somewhere around 5-7% and its guaranteed.

you grow your money, the bank helps.

or gambling.

if your gonna ask a stupid question and rule out the only legitimate answer.....gamble the whole lot of it away.

Answer 7

Select an investment firm to handle they money. They handle all the problems, they spread it across the stock market to avoid taking too many risks on one stock, and they know the best stocks to get. They also have preferential treatment for rich people.

Then spend the time you would be worrying about how to handle your money to make more money. That's how the super rich do it. They select investments that make money on their own, so they are free to work or play.

Answer 8

I suggest you to open a brokerage, margin and options account at TD Ameritrade and invest in the Stock Market with the help of a Portfolio Manager like myself.

You can drop me a line for more detailed information.

Top 3 Answerer in Business & Finance. (Vote for me)

Answer 9

Build your own business if you're not risk averse other than that invest in paper asset like shares etc and real estate and you would be glad you did. By the way I hope I can see a currency sign before the amount in figures.

Answer 10

i would buy as many houses as possible and fix them up and sell them for almost double what i bought them for and the turn time on a house would be 4 months so to keep payroll down, you tell everyone they get so much per week and the rest when the house is done, this encourages people to get the job done rather than ride the clock as so much of our workforce seems to do these days