I am 54 on disability don't need income right now. I have $50,000 to invest and don't know where to start.

Question

Don't want big risk, but want more than 2-3%, have no ideas as to how to figure what I should do. No debts, single.

Answer 1

Look for Private Money Firms. I can name a few if you want. You can look at 10+% on those. You can get 2-3% in the bank or CD.

Stonrgly consider rental properties as well. Real estate is still the best investment. You can easily still 6% plus cash flow on those...

Answer 2

A lot depends on your definition of "big risk" and when you might need the money.

T-bills currently pay about 4.8% to 5.0%. The rates are currently a little low because people are fleeing other more speculative investments. T-bills are considered the most risk free investment. Interest is not taxed by state and local governments.

You buy them from this site.

http://www.treasurydirect.gov/indiv/products/prod_tbills_glance.htm

Now lets talk more risk but historically better returns. These are presented by mutual funds and index funds. But they are not for short term investments normally. Plan on 5 years minimum. Expected return is about 10% annually over a long term. Over a short term it can vary greatly from +25% to -25% maybe more depending on the volitility of the fund.

Some better mutual fund companies to consider are Fidelity, Vanguard, T Rowe Price, and Royce Funds. They are all on the internet. If you do decide on mutual funds or index funds do not put all of your money into one fund and do not invest all of it. Keep a portion in t-bills, maybe $10,000 to $25,000. Some of your assets should always be in reserve.

Answer 3

One opportunity that I recently got involved in is prosper.com

Prosper is involved in building a network of lenders and borrowers that work outside the traditional network of financial institutions. Think "Ebay for unsecured loans."

People who want to borrow post a listing of how much they need and what interest rate they're willing to pay, then lenders bid on those listings. This creates an efficient market where the borrower gets the lowest possible rate and lenders get better rates than they could get from savings or CDs.

If you sign up through this link, both you and I get $25:
http://www.prosper.com/referrals/all.aspx?referrer=ahem&utm_source=referrer-ahem&utm_medium=referral-button&utm_content=all_dark-180x150&utm_campaign=referrals-all

You can earn higher returns if you're willing to tolerate higher risk, but most importantly, you can diversify your investments such that no borrower can default on more than $50 of your money if you so choose.

I've currently got a portfolio with an average interest rate of 15.5%, which is spread across borrowers of all risk levels. YMMV, no warranty either express or implied, but after three months I haven't had a late payment or default (since the loans are repaid from automated transfers out of the borrower's checking account).

Good luck with your investment plans.

Answer 4

Start by learning some basics of investing:

- Mutual Funds for Dummies, by Eric Tyson
- http://www.invest-for-retirement.com has a free downloadable book, by me.

To answer your question, you will need to set a time horizon. This will determine how much risk is appropriate for you. If you could re-edit your question and give us a time frame, we could answer your question more specifically.

Here are some general guidelines that I go by:

- If your time horizon is less than 2 years, a money market account is a good idea

- If your time horizon is 2 - 7 years, an intermediate-term bond fund might be a good choice

- If your time horizon is 8 years or longer, then a mix of stock and bond mutual funds is probably a good choice.

Check out www.vanguard.com and check out some of their fund-of-funds. They call them LifeStrategy Funds. Search on this page:
https://flagship.vanguard.com/VGApp/hnw/funds/vanguard/bytype

What these funds do is invest your money in other underlying mutual funds. For example, the Conservative growth Fund:
https://flagship.vanguard.com/VGApp/hnw/funds/snapshot?FundId=0724&FundIntExt=INT will invest about 50% in stocks, 30% in bonds, and 20% in money market securities. You get a balance of the three major asset types. Click on the performance tab and see what has happened in the past. Past returns are not necessarily a predictor of future returns, but give you an idea of the volatility and risk you might expect from this fund.

Vanguard also has other LifeStrategy funds which have different levels of risk. The more conservative ones use more bonds and money market securities, while the more aggressive ones use more stocks. Their "agressiveness" or "riskiness" is defined by their stock to bond/money market ratio. (Academic studies show that your stock to bond ratio determines most of the risk and return of your overall portfolio in the long run.)

Vanguard is not the only company to use fund-of-funds. Fidelity has them too. You should consider one of these, since you can pick a risk level that you think is appropriate for your time horizon and personal risk tolerance. Fund-of-funds make investing much more simpler, since you only have one fund to track. They also stress the importance of balance and diversification. We can never know which asset class will perform best the upcoming year. By having a little money in each category, you limit your losses. You also prevent all of your money from winding up in the losing asset class for that particular year.

Answer 5

Heres a great option...do you have a favorite store or restaurant that is privately owned..maybe a friend..ask the owner about investing in his business ..using your money to make the business bigger or menu larger..if you and them agree get a short term legal agreement..and enjoy being a investor of something you love..

Answer 6

1/3 mutual funds TRowe Price Equity income fund.
1/3 short term bonds
1/3 cd`s or money market fund above 4%
This is very non-risky .

Answer 7

You can get around 5% with CD's. If you are willing to tolerate a little risk, pick a couple solid mutual funds and put it there.

Answer 8

Congratulations Dave, I hope your disability isn't too crippling. You sound like a sensible man who could go far, with your outlook on life and with an improvement to your health.
Best of luck in the future.

Answer 9

Have you thought of investing part or full time .
you can make good money on a regular basis.
But you have to be disciplined..
If you are at home alot with your disability this may be the thing for you.
have a look at this site and see for yourself if this is for you
Good Luck
Leon

Answer 10

ING is a really good place to go to for CDs. Their current rate on a 12 month CD is 5.35%