What would you invest in TODAY for the long term if you were 18 and had $50,000 ?

Question

Only "realistic" investment ideas -- mutual funds, stocks, ETFs, bonds, etc please. I'm not going to dump all of it into one high risk tech stock, but I certainly would not discount a tech mutual fund or the tech sector as a whole.

Time frame is VERY long-term -- 10, 20, 30 years from now.

Any ideas?

Also, I DO have a full brokerage account currently. I do NOT have an IRA because I do not work and I do not plan to work for at least several more years as I'm a college student right now.

Another thing -- my current education costs and future higher education costs have all been taken care of for me. I have no student loans and currently receieve a 100% tuition scholarship.

Answer 1

You sound smart. Understand that smart isn't enough. You need to be lucky too. Well, it looks like you're lucky too...

Get a bachelor's and MBA (both) in finance. When you're there, you'll know what to do with the money, and you won't have to work a day.

Take my advice, though, and wait until you have your bachelor's before you start investing it in anything heavier than low-interest bonds. Don't even make the money avaiable to yourself, because all it takes is one moment in the next few years to make a bad move.

Do this, and you'll have unlimited potential to help others with their finances. You'll be able to set up retirement funds for minumum wage workers based on SEC-exempted securities. You'll be able to check out Grandma's finances and fire the crook that handles her mutual fund. You'll be able to arrange for healthcare for the whole family. What else? Find out in school.

Trust me, when you're going into your first year of grad school, you'll be ready to start making moves. Before then, there's every chance that you'll make a bad move or someone you trust gets the drop on you.

50 grand? Trust no one. (Tell no one.)

Answer 2

Since you said long term, i assume you won't be needing the money any time soon (not even for your education). However it's best to set a more specific time frame. 10 years and 30 years are quite a difference.

Your investing method and goal should correlate with the amount of time and effort you are willing to spend on them, and the risk you're willing to tolerate. It is not viable for one to wanting to "get amazingly high return with no risk and no effort at all".
Warren Buffet once said that the he get rich by "reading and analyzing thousands of financial reports every year". (Believe me when i tell you that's hard work)

Having said that, i will give you an advice assuming that you'll want to spend minimum time taking care of your investment. Built a portfolio of Stocks, Bonds and For-Ex, with the proportion of around 70%-25%-5% (or somewhere around this).

With the amount you have, for stocks, consider a broad market ETFs, such as SPY (which tracks all the stocks in S&P 500). No need to try to beat the market, 90% of money managers fails to beat the market in the long term anyway. ETFs is good to utilize when you have a relatively big amount to invest. 10 dollars or so commission for a 35 thousands dollars purchase accounts as less than 0.03%.

For bonds, you could either buy Long term Treasuries issues yourself, or simply invest in a bonds fund that invest in government and high-grade corporate issues bonds.

For for-ex, i would really recommend just investing in a good mutual fund, instead of doing it yourself.

Having done that, then re-adjust your portfolio again each year so that the proportion doesn't get out of line.

I love discussing about investment (in general, but no stock-picking advice from me :D) and if you want to, you can message me for a long talk about it. Good to see an 18 year old with a passion to invest.

Hope that helps.

Cheers,
Ed.

Answer 3

Here's my brief story: At 18 I had a free ride to school. I had 60K. I bought a house and with the other 20K invested it. The house was traded in 2x for new ones that are now 380K and the investments are 250K. I have been *very* lucky and aggressive. I can say that the guy who tells you to get the bach degree and MBA finance seems straight forward and I like what he says, but do not forget to like what you do.

Buy a condo or house and invest is my recommendation. For the investments read Investing for Dummies to start by E. Tyson. Rent the extra rooms to your buddies.

Good luck!

PS I like ETF's more than mutual funds...cost issues

Answer 4

Short answer -- I'd put half into MVV and half into SSO.

Those are the leveraged (i.e. "2x Long") ETF's for the S&P Midcap and S&P 500 indexes. Given your long-term time frame, something like those should do well. My only concern would be that we're currently near a market high -- since their introduction in mid-July, these two ETF's are up about 19% and 25%.

If you're feeling a bit more adventuresome, you could also considers the 2x Long ETF for the NASDAQ index -- QLD, but it's up almost 40% since its inception in mid-July as well.

But I can guarantee the long-term performance of these ETFs will not continue on such a strong streak...

Answer 5

At your age I would invest that money in my education. There is no stock, no mutual fund or any other investment that will return a higher yield on your investment than higher education. The world is very competetive, and will only get more competetive.

If you had more money to invest right now, say 250k or higher, I would give you different advice.

Answer 6

With assumption that the 50k is for investment only, you should go into real estate. You will good return in the long run, and you still be able to pledge it when you are starting your own business and need additional working capital.

Answer 7

IMHO, I would invest in gold bullion. NOT GOLD COINS THAT COLLECTORS COVET!!! YOU WILL BE PAYING FOR THE RARITY OF THE COIN AND NOT THE GOLD!!
You dont have to declare it to the IRS, it will never go down in value and you will have it on hand in case of dire emergencies.
Even if the value of the dollar goes down, gold will always be the standard until someone finds a way to make synthetic, which alchemists and scientists have never found a way.
Keep it close at hand and not in a safe deposit box. If there is an uprising of any sort or the U.S. declares it illegal to own gold again, you will have access to it.

Answer 8

i think real estate is the best possible investment ; possibly a condo near your school for the next 10 years and then turn in over to buy a home with the profit

Answer 9

For the long term, try China. Thats where the big growth is going to be