investing $30,000 inheritance?

Question

I'm interested in investing a $30,000 inheritance I'll be receiving soon, but I don't want to stick it on a account. I want to risk it for a high return. I currently have a savings account with about $10K in it.

In terms of debt, I don't have any (I still live with my parents). I only have my college loan (which I still owe about $12K) and my credit card, which I'm currently paying off. Overall, I want to invest most of the inheritance myself (no third-party brokers, planners, etc...)
With that in consideration, what percent should go to stocks, mutual funds, and to the bank? I don't want to put that much into the bank because the interest is horrible.

Thanks.

Answer 1

Think about what it is that you want. What are your goals for this money?

Do you know anything about investing, mutual funds or the stock market?

Diversify. Do not put all your eggs in one basket.

Investing tends to only get exciting when you make money quickly or you see the end result of a good investment over a fairly long period of time 15 - 20 years or longer.

The more risk we are prepared to take, the more we can expect to make. That is why the stock market will generally return more than a savings account.

To be successful you will need patience, discipline, and wisdom. But most importantly you need a plan and you need to define your goals.

It may prove expensive to acquire that much needed wisdom on your own. Learn by other peoples mistakes. Learn from other peoples successes. Read some books. Visit your local book store and find a book that you like and feel comfortable with.

Some of the titles I have on my bookshelf include:
One Up on Wall Street by Peter Lynch
How to make money in Stocks by William J. O’Neil (Founder of Investor’s Business Daily)
The Millionaire Next Door by Thomas J Stanley and William D Danco

Check out web sites like fool.com and yahoo finance.
Investigate trading strategies with a proven track record over 3, 5, 10, and 15 years.

Pick something that you understand, find easy to use and will help you realise your goals. Pick a strategy where you can take responsibility for your investments and be in full control of your capital.

Systems like the Stocks Monthly system are definitely worth investigating once you are up to speed with the nuts and bolts of investing.

Answer 2

First things first. You will need to get a basic education on stocks, bonds, and mutual funds. This way you will be better able to weed through the information that will be thrown at you when you invest. Also, it will enable to you to become a do-it-yourself investor. Here are some good books for beginners.

1) Mutual Funds for Dummies, by Eric Tyson. This should be issued to all college grads, IMO. Great book.

2) http://www.invest-for-retirement.com has a free downloadable book. You will learn about retirement investing and pick up general advice for other goals as well.

3) The Boglehead's Guide to Investing

If you are interested in purchasing individual stocks, then a great book to read is Morningstar's "The Five Rules for Successful Stock Investing", by Pat Dorsey.

To properly invest, you will first need to set a goal for your money, and then estimate a time horizon until you need it. Your time horizon will determine the amount of risk that you sould take. Focus on your asset allocation and costs, not what is currently going on with the markets, and you will do well.

If you are interested in mutual funds, which I recommend, I would suggest you first look to www.vanguard.com or www.fidelity.com to find low-cost funds.

Good luck.

Answer 3

Invest your money in a target allocation fund such as Janus Smart Portfolio - Growth (symbol - JSPGX). This is a no load fund with an allocation of around 80% stocks and 20% bonds. I would put $20,000 of the $30,000 in this fund and put the remaining $10,000 in the Janus Money Market Fund earning just under 5%. Janus is a good family fund with a good track record. They had a slight bump in early 2000's but they are back on track. If you do not like the Janus Funds go to Vanguard, another excellent mutual fund with a great track records.

Good luck.

Answer 4

First, pay off your college loan so you have no debt at all, and so that the one who give you inheritance may rest in peace.

Second, be carefull with Ponzi Scheme.
http://en.wikipedia.org/wiki/Ponzi_scheme

Third, education is important for everything. Study and do your own homework before making big investment, eventhough you may will use proffesional or buying mutual fund, it is better for you to know about the investment.
If you don't want or don't have time to study, then just put your money to the bank, the saving rate now is 5% at www.emigrantdirect.com.

Answer 5

Every Business must face up to 2 realities - Profit or Loss. Hence, your Investment Portfolio of U$30K could be subject to Profit or Loss. As you would certainly not want a Loss Scenario, you would have to exercise "Good Judgement" which requires you to balance Subjective and Objective concerns. In so doing, here are some tips: (1st) Set an amount of your hypothetical "Maximum Loss". If you could not take the Risk-of-Loss, don't invest; (2nd) Set an amount of your hypothetical "Maximum Profit". In Speculative Investments, when you attain your Profit Target - unload. Don't be greedy; (3rd) Spread your Risks. Each type of investment has its "Gains & Pains". Generally, the higher gains have attendant higher risks.

Good Luck.

Answer 6

Why not pay off the student loans and credit card and move out of your parents' house?

For the first, is the interest rate so low that your investments, minus the brokerage fee, will exceed what you'll be paying?

If you're working, you could put some of this in a Roth IRA. I'm doing that with for my sons with money from their grandmother.

Answer 7

it's hard to get a return that would beat what your cost of financing a credit card so i would first pay that off.
then start to dollar cost average into an no load fund that tracks the s&p 500
if you really must gamble do it with only about $3000 to find for yourself exactly how easy it is to lose money chasing high returns
if by chance you can beat the s&p then slowly move more money into towards whatever it is you're beating it with and let me in on it too
remember the first rule of investing is preservation of wealth

Answer 8

In terms of making the most with your money, your risk factor points to stocks. Go with about 80% in stocks, 15% mutual funds, and the rest in an interest accruing account (ing or hbsc).

go here for money advice as well: www.fool.com

Answer 9

Read tips on Stocks, Investing and Mutual Funds to help you more on this site

Answer 10

If you're young and don't have any massive expenses staring you in the face short term, I'd just stick all of it in the market, either stocks (if you have the time to research them) or mutual funds/etfs if you just don't want to worry about the money.

Buy shares of either the SPY or IVV etfs and you'll own all 500 stocks in the S&P 500.