I’m 22 and have $150,000. What should i do with it?
February 17, 2010 by
Filed under realestate rentals
I’m about to get my inheritance and I am almost clueless. I’ve looked into realestate, buying up rental properties and renting them. I’ve looked into stock and all that, confusing! I would love to invest it in a way that i could get money every month for rent. I will of course still work but I’m a student and a server so my income doesn’t amount to much. Suggestions?
I’m about to get my inheritance and I am almost clueless. I’ve looked into realestate, buying up rental properties and renting them out. I figure that makes a good monthly income. I’ve looked into stock and all that, confusing! I would love to invest it in a way that i could get money every month for rent. I will of course still work but I’m a student and a server so my income doesn’t amount to much. Suggestions? I’m not going to blow it, i already own my own car, and i don’t have school loans… i’m paying for school just fine.
you could put it down for a nice house, you will be ahead of the game by 20 years for your age
Umm…make a donation to my charity?
You can just make the check out to me.
I could definitely use some of that..
Stocks are very risky right now, you’re better off opening an IRA that is stabilized and buy yourself a house!
LUUCKKKYYYYYYYY
GO WILLLDD
BUY A CAR TO
put most of it into the bank, or invest in something
Buy a beautiful condo.
Buy a nice house and rent it out
Why on earth would you keep renting when you have more than enough money to buy your own house?!?!?!
SAVE
Talk to your bank adviser. They will sit down with you and figure out what is the best type of investment for you.
SAVE IT
First of all, do not listen to anyone on Yahoo. Second find a person in the investment business, that has stellar references, and talk to them.
save it for when you have a family
burn it.lol
no put it in a savings
Invest into a CD or IRA that will mature when you are done with school..The smartest people on earth don’t work, they let their money work for them
Go to the biggest bank in your town, and ask to talk to an investment advisor. Talk to the person, and listen to what they say, then make your own decision on where to put your money.
Money market accounts are safe, give reasonable return, and you have access to your funds.
Diversifying is good. Don’t put all your money in one place.
Some investments can be set up to give you a monthly pay out.
first go on holiday and see the world then find something to invest in to ive you a secure future
How about…invest?
look into indexed annuities or something that can give you the interest every month without touching the principle.
chances are you might blow it and it will all be gone in 2-3 years
my neighbor got a $250,000 settlement and was broke in 3 yrs
i would keep it split (75 75) in two separate banks (FDIC only insures up to 100) , until the market steadies
then invest
best of luck !
Talk to a professional- I suggest First Investors Corp if there’s an office in your city- there is no charge for meeting with them, and they can give you suggestions or you can eventually choose to invest with them. Good luck!
If you really don’t want to go to a financial adviser, check out Suze Orman’s website and read her books on personal finance. She’s a great resource for learning about sound investing – whether you’re doing real estate, stocks or whatever.
Buy a house esp now that houses are low prices due to the economic downturn.”)
I would also suggest forclosure properties but you might also wanto try investing. Try to invest in some of the strong companies that are just going with the recession. All stocks are cheap right now but make sure you invest in a stong company, do your research. You might also try buying some bonds. If you spend 25k now……a few years down the road you will be 25k richer
For now, do nothing. Don’t buy anything or spend the money. Put the funds into a savings account for the next 6-8 months. Finish your schooling. Once you graduate, pay off any school loans.
In the next 6-8 months, read some journals about personal finance, investing and the like. Learn it from the bottom. TRUST no one. Make your own decisions.
buy shares in general motors
Put it in a CD for a year and get used to having the money. Then, after you are over the thrill of the new money you will be able to make a mature decision.
u need to go talk a financial advisor.
i think it would be best to save the money to pay off your school loans if u’ve gotten any, if not, then investing it in a house sounds ideal.
I’d avoid the stock market right now it’s pretty volatile.
Instead of rent, why not buy a house? it’s a buyers market, you can get a lot of bang for your buck, and assuming the housing market doesn’t disappear you will be able to recoup your money on it.
since house prices would have gone done by the recession, you could invest in a house, then when we are finally out of recession the house prices will go up.
Buying a house at 22 is a very nice achievement.
Make sure you do research though.
I would buy some real estate. It’s cheap right now & as you mentioned you would get monthly rent. May even be idea to buy 2 unit so you have someplace to live and collect rent from the other unit. Make sure you plan for insurance & taxes. Buying right now also has tax benefits etc. Down the road when values come back up you will also have more equity.
That’s fantastic!!! Where do you live? I would invest in a personal residence for yourself, and any family you may have in the future. That will save you a lot of trouble later on. Rental properties are A LOT of work. I don’t think you’ll want to deal with that. Depending on how much homes are where you live, you can put a good Down Payment on a (modest, not too big) home. The rest I would put into a high interest bearing account at the bank, where it will make money with little effort. If you know someone who is experienced in stocks- you can have them help you out with that. I would only do that if you have someone to help you though. I find it very confusing. Just keep it simple but do your research and be smart. All you really need in life is food , clothing and a roof. If you use some of your money to buy a house, you’ll have 1/3 of that all taken care of! Hope this helps:)
You will want to look carefully at both your short term and long term financial goals.
Putting away a $50K block toward retirement now will yield HUGE benefits later on. Consider opening a ROTH IRA.
You will want to invest, of course. Put the money to work making more money for you. Having this much to work with will allow you to begin getting price breaks on reputable mutual funds right away.
If you have outstanding debt from university, consider retiring it quickly. No sense paying interest unnecessarily.
Please resist the urge to go out and buy a bunch of luxuries. That ’stuff’ will come. Your tastes will change. Fancy cars and fancy clothes will be expensive and will be gone in five years.
A suggestion: consider taking on a financial advisor. I’ve been an Edward Jones client for almost 15 years. I like the company’s philosophy; they don’t have any of their own products so I’m not worried about conflict of interest. An Edward Jones FA will take the time to educate you about your possibilities and offer a number of options.
First, calm down. Put it in a basic savings account first and collect some interest on it. Get your head straight before doing ANYTHING!
Move a $50k portion of it to CDs, Ecah month move $10k each. make it Ready access, short 9 month terms. This is for your emergencies only. They will rollover and when the interest rate goes up it will accumulate some nice interest. Spend this only for emergencies.
Open up a brokerage account with an online firm like Fidelity. Start yourself a Roth IRA and contribute the max to it each year. That should be like $4k or so yearly. Invest this money in the IRA in something broad and a little risky, like the Magellan Mutual Fund. This is for your retirement only. Do not plan to use this until 67 years old.
Earmark about $50k for your home, whenever you plan to buy it. You will need at least that for a down payment. Do not jump the gun on this. Wait until you are married or settled in the right place, or buy something that you can keep as a vacation house later.
Take $20k for yourself NOW. Buy a car, a boat, take a trip, do soemthing and get it out of your system.
The rest, well, think long and hard before making too much of an investment beyond a bank account. You can loose the whole thing overnight if you are not careful.
With today’s economy, real estate and the stock market are extremely risky. Rental properties sound great at first, but have many downsides and costs. I would place the money where your risk factor would be the lowest, such as bank CD’s, savings or money market accounts. I am including a link where you can check out the different types of bank accounts offered, and it can be narrowed down to your own city and state. That way you can see which local banks offer the highest interest.
you should buy a house and flip. then you’ll have more money. then if you liked doing it and the outcome, you can do it again. or just put it in a bank forget about it. I think buying a house to rent it isn’t the right way to go, your going to buy a house for 150… and charge what for rent? it will take you so many years to get the money even back and there’s so many other problems with renting a house, the tenants could be scum,or what if you cant find someone to rent then your stuck paying it, the roof might leak, and you need the money to fix it,like that day. I mean anything could happen in the house the fridge might go, the stove… i mean thats just examples. get what im saying? Just be smart with it, dont blow it. you will appreciate it alot more when you get older. its nice to hear someone as young as you was even thinking about doing the right thing with it.
Well you probably won’t find anyone to rent property right now and w/ the economy as it is that’s not a good idea.
I would recommend buying a home now. If you plan to stay in the area 2 years (no capital gains tax) then buy a home and live there 2 years…don’t forget to do the Homestead filing for lower taxes. Homes also offer as a inflation hedge (about 3%).
I was scared about taking the risk but, renting is a WASTE of money. 1) you’re paying someone every month …. 2) no asset building! Get an asset which you can sell later!
Investing in a little gold is a good idea…just don’t put all your money there. CDs are not paying out well but, will help you keep that money safe. Don’t invest in a mutual fund…too many fees (and the people who “help” you collect comission from you). Look at the stock and devote a little money to them…if you want to go conservative bet on the markets…or utilites are always good.
Buy a home!! (get it inspected!!! and don’t buy too much home…you should pay it all up front aka no mortage). Take advantage on tax credits!!
Good luck!
Real estate and government bonds!
Avoid the stock market.
Just be very careful about the real estate. Renting is almost always a messy business. Be sure you scrutinize your tenants “to the tee”.
Best thing is a 3 month deposit for damages in advance. The sum can accumulate interest in a savings account during the time they are renting, but if there are damages or repairs that must be taken care of when they leave, the deposit will cover it.
Also, a 3 months notice if they decide to move and no subletting without your knowledge. No pets is usually also a good policy, although I’m an animal lover. But some people let their pets pee all over…seriously. You might also want to consider a “no children” policy. We had people renting once who just threw the diapers in a corner for a couple weeks before discarding them.
Just try to be careful and prepare for the worst!
A real financial plan takes in consideration all your income, future income, goals for the future, and so on. You can work on that over time.
With what you have said here, this is what I would suggest to a friend and what I had set up for parents that also wanted to generate income and get a consistent check.
Put it all in to mutual funds, I like Vanguard because of the low fees. Mutual funds are managed by professionals so that puts most of the the confusing “investing” in the hands of a pro. You only need to decide on the type of investments, not the investments themselves.
One of the funds should be a money market. Start by putting it all in there and then you can move it in to other investments that return more. Since you want income you may want some in a bond fund and I suggest a fund that invests for income in high yield stocks. Right now is a very good time to invest in high yield stocks because prices are low and income is high.
Then you can have a monthly deposit sent to your bank account every month. On the other funds the income and capital gains distributions should go to the money market. One reason for doing it that way is that the distributions from stock funds are uneven throughout the year with most capital gains paid at the end of the year. Using the money market evens that out.
Your emergency fund can be the money market fund. If you have a job you need less “safe” money.
My money market yields only 2% at this time but averages more like 4% generally. My GNMA bond fund is still producing 6%. Wellington, which is a mix of high yield stocks and bonds kicks out over 4%. Stocks alone historically have averaged closer to 10% total return (not as much yield as some is growth, increase in value). Stocks have been very bad in the last decade because of this bear market and recession. But now is the time to buy low.
Income investing is like retirement investing so you might want to read up on that. They say you can generate a maximum 5% if you are drawing on a “retirement” portfolio.
That would be $625 a month for you. With more stocks you might average closer to $1,000 return but that would vary greatly year to year. That is the risk in stocks and drawing on stocks.
The money market would only pay you $250 a month right now if all was in there only.
If you can get by starting out with $500, I would say do that and put it all in several diversified funds then adjust what you draw next year by how your investments perform.
And if you can draw less than than it generates then you can grow it and thus take more later.
Good Luck.