I have no idea about investing money. I would like to invest around 10K.?

Question

How should I do this? What should I invest in? I dont want to just put it in my checking account and would like some ideas. Thanks

Answer 1

First, I would make sure you have at least 3 months salary saved up in the bank or in a money market fund for an emergency fund. (Some people say 6 months.) Financial disasters like getting layed off or sick happen to all of us.

Second, I would pay off all high interest debt. Pay off everything you can except the house mortgage and student loans. Paying off debt is one of the best investments you can make. You will have more money in the future because you won't have credit card bills to pay. (Depending on the rates, you may want to pay off the mortgage and student loans as well.)

Third, start investing in stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks, as individual stocks are too risky. For most folks this means buying mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money conservatively, in money market funds and bond funds, and part aggressively in stock funds. Vanguard.com has an on-line questionnaire which will give you an idea how aggressive you want to be.

Investing in a mutual fund IRA for retirement may give you an income tax break. Talk to your tax adviser. You may also be able to invest in a mutual fund via a 401K plan at work.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

http://www.vanguard.com/VGApp/hnw/planningeducation
http://finance.yahoo.com/funds
http://www.dallasnews.com/sharedcontent/dws/bus/scottburns/columns/2007/vitindex.html
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
https://flagship.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education

Answer 2

The important thing to remember is that cash is also an investment and not to invest 100% of what you have available. An investment is taking a risk, in that sense it's gambling however unlike gambling there is value coming in from the business model while in gambling the only value is from the wagers. To use a gambling analogy, you don't want to wager everything if there is a risk of loss, you only want to wager a fraction of what you have, the higher the probability of success, the higher the fraction. There's actually an equation for this fraction because so long as there is a positive expectation of return, your assets will grow exponentially so long as you stay below a certain fraction of your available capital being at risk but once you go over that fraction, the probability of losing everything outweighs the probability of gain. This is known as the Kelly Criterion or Kelly Formula and was developed at Bell labs to calculate the maximum data rates that can be transmitted over noisy channels. The fundamental premise is keep some of your investment in cash. A common sense analogy would be the recent downturn in the economy, how many people lamented not being able to take advantage of the low stock prices because they were already fully invested in stocks? Had you kept a percentage of your portfolio in cash, you can benefit from a downturn by rebalancing your portfolio. For example if you kept half your portfolio in cash and half in stock, then when the stock goes up, the percentage of your portfolio that is in stocks increases so you sell stocks to get back to 50/50, if the stock goes down, the percentage of your portfolio in the stocks goes down so you buy stock to get back to 50/50. Effectively, you are buying low, selling high. At MIT, Claude E. Shannon proved mathematically that such a strategy would always make money. If you don't know Shannon, you should, he is considered to have been more of a genius than Einstein. Read "Fortune's Formula" by William Poundstone. The house would probably not be a good idea because there are a lot of additional costs such as municipal property taxes, county property taxes, MUD taxes, School district taxes, insurance et al. The taxes on my house amounted to over $1,000 a month and that was on top of the mortgage. Practically 40% of my mortgage payments! The taxes that you look up at the county appraisal district is based on the last sale of the house so although current taxes may appear low, that was from decades ago so taxes after you buy a home will be high. You should wait till you have a lot more than $13,000 in the bank. Car restoration is a money loser when you take into account the amount of time and labour that you put into it. But it is an enjoyable past time and can be the source of a lot of pride. Look at how many people started a project car but never completed. Your best investment right now would be to read a personal investment book once a month. You can deduct the cost of the books from your income taxes. Books like "Take Your Money and Run" by Alex Doulis will give you insight as to what's important in your life and books like "Fortune's Formula" will show you that there is a mathematical foundation for success even when risk and probabilities are involved.

Answer 3

If you are not in a big hurry to immediately plug your money into something and you can afford to wait a couple of weeks I may have a very good idea for you.

Over the next two weeks I will personally work with you to teach you a very interesting strategy that will consistently generate MONTHLY returns greater than what any bank would pay you in a YEAR.

I can teach you this system for free and you can decide for yourself if it is an appropriate opportunity for some of your investment dollars. No cost, no risk, no obligation......just some free education.

http://www.15daytrial.com

Answer 4

1st. Beware of ANYONE that has a guaranteed success plan. If it were so guaranteed, why are they so hot to get YOUR money?

For $10k, your best place is a CD. They are earning 4-5% which beats inflation. If you wanted to 'gamble' on the stock market, I'd suggest looking into index funds as they are a grouping of many funds (so the risk is spread out). Remember though, any money you put into the 'market' you are willing to lose. There are ZERO guarantees on return with stock or mutual funds.

Another option might be to talk to a broker. They shouldn't charge for a consultation (cause they want your money too).

good luck

Answer 5

Top 3 safe/secure investments:

1. Savings account, secured by FDIC, returns around 5%
2. Tax liens, secured by real estate bonds, returns around 18%
3. Savings bonds, secured by U.S. govt, returns around 3%

I invest in all, but I like #2. You can do it online too quite easily. I'll recommend a book below on how to start this, it's what I read to get started.

Answer 6

cds do NOT beat inflation after taxes unlike what is said above. 4% less 25% taxes is 3% which is less than true inflation by a good margin. No plans work either - do not contact. @ schwab.com could get 4 index mutual funds that cover a braod spectrum: SWINX SWEGX SWHGX JAOSX FMDCX No load or fee up front. Good to get started. feel free to contact via answers

Answer 7

My first advice is do not invest in anything you do not fully understand. Stay away from tax liens if you are not an experienced real estate lender and investor. Talk to a financial adviser you trust.

Answer 8

I would open a high yield savings account. ING direct offers one and it is linked to your checking account so you can transfer from one to the other as needed. They are currently offering 4.50% APY and have no risk. I like it better then CD's because you have access to your money with no penalties.

Answer 9

let me help you , i have a solid plan that i know will work. contact me thru email