I have $50,000 cash sit on CD, I would like to invest somewhere, I like to have one million in next 15 years, any idea to invest?
2006-12-05 03:16:46 · 5 answers · asked by Anonymous in Business & Finance ➔ Personal Finance
To answer this question, you need to ask yourself what level of risk you are willing to assume. With CDs, you may have made anywhere from 3.5-5% interest with a standard deviation of around 1% (stdev is based upon the inherent riskiness of the asset). Using the basic PV formula of: FV = PV(1+r)^15. Assuming 1m in nominal dollars and an annual compounding period, you need to have an annualized return of around 22%.
The S&P500 has a long-run return of 14% with a standard deviation of 20%. So you need something more risky or more than likely, something that is far more illiquid than the market. Depending on who you know (if they'll do you the favor of investing that sum), private equity or venture capital would probably provide those kinds of returns. Again though, these firms traditionally deal in tens of millions not tens of thousands. Another possibility is a fund of funds. These mutual funds of hedge funds provide low buy-ins of around 25K vs the more traditional 100K+. If these aren't your cup of tea, the real estate market should bottom out soon. Fed fund futures are predicting several rate cuts within the next year making borrowing more attractive, especially for real estate investments.
2006-12-05 08:17:00 · answer #1 · answered by Anonymous · 0⤊ 0⤋
You're expectations are WAY too high. In 15 years at a return of 12% your 50k would be worth about 300k. Not a mil, but not bad at all.
2006-12-05 08:11:32 · answer #2 · answered by Big R 6 · 0⤊ 0⤋
look up Lifestyles Unlimited. They will be able to help you reach your goals. The point is not to get to a curtain dollar amount its to get your passive income through rental properties ( preferably multifamily) to meet or exceed your bills. Look them up. I'm 30 years old and within 2 to 4 years of financial freedom. It's worth a look trust me!
2015-11-22 01:54:50 · answer #3 · answered by Anonymous · 0⤊ 0⤋
buy a 400,000 house, with a 15 year mortgage, at the end of the 15 years, with inflation the way it is, you will have a million dollar asset, trust me, this is what i do for a living. if you want to call me, you can, and i will help you, 203-729-8900 x-111, ask fo david powell, or call 203-410-4427, i can help you.
2006-12-05 03:48:21 · answer #4 · answered by Anonymous · 0⤊ 2⤋
Buy and sell real estate.
2006-12-05 04:17:49 · answer #5 · answered by Phoenix, Wise Guru 7 · 0⤊ 1⤋