Hypothetical situation:
A friend asks you to hold $20,000 for him in cash, and says in about 6 months he will ask for it back in increments, like $2000 per month or so...
Can anything be done with this amount in that time frame investment wise? Can you make a couple of bucks for you, safely so as not to loose the principal? If so how?
2007-07-12 07:19:20 · 11 answers · asked by arctanx 2 in Business & Finance ➔ Personal Finance
startingathebottom, I said the question was "hypothetical", I can do without the "your friend trusted the wrong person" comment. If you don't have an answer don't respond please.
2007-07-12 09:49:41 · update #1
If the person is only going to ask for the money in increments after 6 months, you could put the money in a money market account and draw about 5% interest (about $85 per month). It would be hard to say do something in the stock market because of the fear of losing principal. However, over 6 months, the stock market will more than likely increase in value. Chances are, it will give you a higher return than the money market. Try an index fund or even a blue chip stock.
If you want greater returns, you will risk losing money. It all depends on what you (and your friend) are comfortable doing.
Ron, ChFC
2007-07-12 07:27:22 · answer #1 · answered by Anonymous · 0⤊ 0⤋
the only 'safe' investment i'd even begin to contemplate would be US Treasury bills and/or a reputable bank account or money market fund. Everything else risks that you'll not have the 20k when your 'friend' asks.
AND -- you're officially warned -- this looks like a try on his part to avoid the money laundering reporting requirements if he deposited the 20k on his own. So, where did the cash come from and is it clean money?
If it isn't known to be clean money [or is some scam to dodge something like bankruptcy or his ex-] -- STAY AWAY.
You do not want to be answering pointed questions from the cops or a court about this money.
clear?
2007-07-12 14:28:19 · answer #2 · answered by Spock (rhp) 7 · 0⤊ 0⤋
Yeah, I think you'd be foolish to let the 20K sit around and not earn some money. If you're willing to take a small amount of risk, invest it in a 5-star mutual fund or an S&P index fund. If you are not willing to take any risk at all, at least get it in the best rate 6-month CD you can find.
2007-07-12 14:33:17 · answer #3 · answered by RdStrcklnd 2 · 0⤊ 0⤋
You could put it in a 6 month cd and maybe make 3%. You should check with your friend first.
This sounds like a wierd situation though..........hopefully you know where this cash came from, why it is in cash, and why they cant hold onto it for 6 months, and why they dont want it all back at once.
2007-07-12 14:27:58 · answer #4 · answered by skiracer712 4 · 0⤊ 0⤋
Open up an ING Direct money market account - the current rate is around 4.5%, so on $20,000 you could earn about $75 per month just sitting on the money.
www.ingdirect.com
2007-07-12 15:13:46 · answer #5 · answered by kerry77 3 · 0⤊ 0⤋
I would tell him to put it in the bank. Because 20 grand is a lot of money, but if you where slezy and he gave it to you. Theres no paper trail leading it to you so u can go buy a house and leave him in the dust. Even though i would never do that.
2007-07-12 14:27:35 · answer #6 · answered by whitehawk 2 · 0⤊ 1⤋
I think your friend trusted the wrong person with his money.... You do exactly what is expected, hold on to it for the six months, then give it back..
2007-07-12 14:23:56 · answer #7 · answered by ~Kim~ 6 · 0⤊ 0⤋
Bonds are about the only safe thing, or cd's at the bank. Dont do anything risky, for if you lose your friends money, you will also lose your friend.
2007-07-12 14:29:59 · answer #8 · answered by Nemo the geek 7 · 0⤊ 0⤋
Man you're friend stole this money. He/she can't put it in the bank immediately otherwise it'd be obviously.
2007-07-12 14:39:44 · answer #9 · answered by krumpmaster terrell 4 · 0⤊ 0⤋
put it in the bank -- and collect the percent of it... (just be careful bank might get very suspicious )
2007-07-12 14:29:18 · answer #10 · answered by Mrsashko 5 · 0⤊ 0⤋