If I've saved 100K where should I invest it?

Question

Savings accounts are yielding 5%+, and for short- to mid-range investment I'm not seeing comparable yield. Yet all the investment pros say "Don't put it in the bank! Invest!" Do they mean you should throw your money at a broker or lose it yourself on the stock market? T-Bills? War bonds?

Answer 1

This question can't be answered without knowing what you want to spend the money on.

If it's an emergency rainy-day fund, you need a savings or money market account and will only get 4-5% or so. That's the cost of having the money available whenever you need it.

If you are saving for a particular date (say college fund, or retirement) that is 5 years or less out, you might go with CDs, Treasuries, Corporate Bonds, Prosper.com, or other longer-term interest bearing investments. These will probably get you 5-6%, maybe a little more if you go with prosper or take some risk.

If you are saving for retirement, or another savings goal that is over 10 years out, you probably want to buy stock-based mutual funds. You could also consider rental real estate. This will probably get you 7-9% on average, but it won't be a consistent 7-9%. Some years will be 20%, other years you will lose 10%....

That's just traditional wisdom. As for the Roth IRA which someone else mentioned, it's probably a good idea, but you can only contribute about $5000/year, so that isn't a place you can park $100k tomorrow.

-->Adam

Answer 2

It really depends on your risk appetite and the time range you can afford to set the money aside without dipping into it.

First priority is of cos to pay off all your debts (mortgage, credit cards etc) - especially credit card debts which charges like 24% p.a. No amount of deposits in the bank or bonds will give you that kind of return, so cut your expenses by repaying loans that charges you more interest than what you can earn with your $100k investment.

Next, if you still have surplus after the repayments, consider your risk appetite in investment. Assuming you are a high risk appetite investor with a long time range (i.e. you do not have to use the money in like a long time and are willing to accept loses in exchange for higher returns), then you can go for more volatile instruments like shares in the stock market. Eg if you invest in some good blue chip stocks, even if the market crashes later, it'd be just paper loss so long as you don't sell it. That is, you need strong holding power to play this. The upside is of cos higher returns when the market is on the upswing (as compared to term deposits in banks). So for this you will need time, strong gut and holding power.

If you are more conservative (i.e. more careful with your hard earned money and not willing to risk losing it and willing to accept lower return) then consider maybe a structured deposit. Banks nowadays have principal protected structured deposits that pays better interest cos they take your deposits and invest it in stocks and bonds. But so long as you hold the deposit to maturity, even if the stocks & bonds crash, your principal is still protected (i.e. intact, no losses except loss of interest)

Of cos the worst case scenario is that you are totally conservation and wants some guarantee of interest but with zero risk. Then term deposit is the way to go, although what you earn with the interest may not even cover inflation.

So there's some soul searching you need to do and then market research of the appropriate products in the market.

Hope this helps.

Answer 3

Invest it indeed, set up shop and sell something. Get with a good company, study for an insurance license, figure out what businesses or people in your area need and will pay a premium to get, then see if you can make the connections and get it for them (for a piece of the pie, of course). If nothing else, you can almost get into a Taco Bell, and several smaller burger chains will let you in for about that kind of capital if you can't think of anything else. What does your town need that you might be able to do? If you can pile up $100k, you can put your industriousness to work and make some serious money if you tried. Good luck and good hunting. (if nothing else, a good certificate of deposit can beat what most of us are getting trying to find the next high-flying stock to make up for the dogs we've bought this year, there's no shame in letting the bank loan your money out to someone and pay you $5k next year, plus return the $100k)

Answer 4

Open a brokerage account at Fidelity and invest in the Stock Markets with the help of a Portfolio Manager with over a decade of experience in the Stock Markets like myself.

Answer 5

sure, you're being a slacker, yet i discover it stunning that a Wall highway type organization does no longer comprehend which you're no longer doing something effective. in my opinion, it mightcontinual me nuts to take a seat down around and don't something, in spite of the money. yet, boy, might I actual have a no longer project-free time leaving a job that shall we me take a seat around and surf the 'internet for 6 figures a 365 days. the disadvantage is in case your bosses clever up on your modern status and brush aside you, what in the worldwide are you going to placed on your resume as to what you performed at your previous activity? which could be a project. in case you identify to pass away, could you propose me on your activity? ;)

Answer 6

My father is not a sophisticated investor, but he is definitely not a novice. His advice for me is to invest in a ROTH IRA. He advised me to go with Vanguard Mutual for it. If you are in your 20's or younger, it is in your best advantage to place some money in it. 30's is ok, but you would not make as much when you hit retirement.

I am not as knowledgeable as he is, so I suggest learning more about it on your own before you take my advice.

Answer 7

I say get a safe put the money there and hide it somewhere safe. coz I heard if u got more than 10k in the bank they tax you for it. and of course the other dangers i say put likr 5-8k in a bank wiht good intrest and keep the rest with u in a safe place

Answer 8

You need to find an honest, educated, experienced financial planner because based on your quesitons, you have no clue as to what you are doing.
I'm a CFP, but I have a $250K minimum

Answer 9

Chicken ranch in Nevada.

Answer 10

After you save 100k 1st.

Before you really had any saving, all these are empty talk.