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how would you invest $500,000?

W

wasssup

Diamond Member
Just trying to help a close relative with investing $500,000. He's currently getting a really crappy return (something like $1000-$1500/year), assuming he puts it into something like citibank e-savings (5% return) that's $20,000 right there a year. Then there's higher interest CD's...

Stocks are out of the question, as we're not looking to take risks...a few years ago he got burned on a few stocks and lost most of his savings, he's not young anymore so he can't rebuild his savings yet again.

If we were to put money in a high-interest savings account or CD's, should we split them up (ie. between different banks)? Just trying to gain some insight here.
 
What is the intended length of investment?

Unforseeable?

Is this money that is there to stay, or is it a savings that is changing month to month?

Is this a retirement fund or just some mad cash he's got? Is this a 0 risk factor deal?
 
Is this a joke? $1500 on $500k? How is that even possible?

Do this and only this. Go talk to a financial advisor that works on compensation only. $500k is a decent amount of money, and accepting some nonsense like 0.3% return a year is almost as irresponsible as asking how to manage that amount on ATOT. It will only cost you ~$1k and you'll have a comprehensive plan that will help your relative manage his assets into and through retirement.

[edit]Looks like others beat me to it.[/edit]
 
Originally posted by: Descartes
Is this a joke? $1500 on $500k? How is that even possible?

Do this and only this. Go talk to a financial advisor that works on compensation only. $500k is a decent amount of money, and accepting some nonsense like 0.3% return a year is almost as irresponsible as asking how to manage that amount on ATOT. It will only cost you ~$1k and you'll have a comprehensive plan that will help your relative manage his assets into and through retirement.

[edit]Looks like others beat me to it.[/edit]
Click to expand...
They left out that key part though. A lot of less honest advisors will earn commissions (or indirectly as bonuses) by selling you products like annuities or high-load mutual funds that are second-rate investments.

Also, he got burned gambling on picking stocks, but stock index mutual funds can still be a safe part of his portfolio along with bond funds and CDs. Over decades the S&P 500 index has returned double the growth of bonds and cash investments.
 
Talk to a CFP (Certified Financial Planner). Like others have said, the upfront cost will be worth it with the vastly increased return.
 
Depending on the desires and location of the client, I'd be looking at muni's for that chunk of change. Tax free interest would be a good thing with that much $$ on the line.

But as has been addressed, go see a high regarded fee based Finanical Advisor and see what plans they can cook up.
 
Put it all one google when it gets around $380, sell as soon as it hits $400. Even safer than buying at $360 and selling at $420.

Gauranteed money, GOOG has been this way for over 10 months.
 
If he wants no risk, then you are going to have to go with 6% CDs at multiple banks. That will make a lot of money off 500k.

Other forms of investment only get about 8-10% returns, so if he doesn't want risk, CDs are the way to go. Check out World Savings Bank. They are a big bank with great rates.

Or you can try real estate, but there are always risk there. There are also funds (aka stocks) that you can try, but again, risk there.
 
Originally posted by: F22 Raptor
Put it all one google when it gets around $380, sell as soon as it hits $400. Even safer than buying at $360 and selling at $420.

Gauranteed money, GOOG has been this way for over 10 months.
Click to expand...

Excellent idea, that way if Google's Enron-esque scandel is exposed tomorrow he will have $0.
 
he should have a money manager with that much, you can find ones that only charge ~1% of the portfolio
 
They need to talk to a good financial planner, a CFP is a good idea. You can find one who will only charge you for the plan and can not actually sell you any investment products.
 
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