How would you invest 60k right now?

nOOky

Platinum Member
Aug 17, 2004
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I didn't want to post in the stock market thread, because buying single stocks is not what I want. Basically we have a bit of extra money, and we have to decide what to do with it. The wife has a car loan of about 20k left to pay, but it's zero interest. We have about 22k from a kitchen remodel, but that's zero percent interest also. We thought about just paying for the kitchen, but why not use someone else's money for a bit? We owe 80k yet on our house, but the interest is under three percent. We are paying that off as it is at about 2k a month right now, paying in extra on the principal.

I'm looking for something that will earn interest over and above the home loan, otherwise we'd just throw it at the house. What with inflation being what it is I'm not sure we can even cover that. FWIW we have an appointment with a financial advisor that we currently have some mutual funds with and a simple IRA. I'm also soliciting opinions about what we should be looking at. I have a 401k at work that I'm putting the max in along with catch up, and I'm maxing out a Roth. We have emergency funds for ourselves and for her business. Looking at maybe 5 years until she retires, more like 6 1/2 for me as I provide insurance.
 

deadlyapp

Diamond Member
Apr 25, 2004
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So it's hard to tell here what your timeline is for the investment and your risk for the money is. Right now the market is very low and could dip a bit lower, but over 5-10 years will probably give pretty good gains. Tech is in the middle of a correction and may yet go a bit further down, but should rebound some with time. Real estate has been doing very well over the last year or two compared to most of the market, but probably won't perform as well in the near term.

If I had 60k I'd split it up between several funds, probably a mid-cap, a large cap, and REITs, which should diversify pretty well and give an average 8-10% / yr over the next few years.

If you want to go low risk, you could do bonds, which are at least doing a few percent now. Fidelity has 5 year bond funds doing about 7% return, 3 years doing about 2%.
 

brianmanahan

Lifer
Sep 2, 2006
22,771
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in the next day or two, you could put 20$k in I bonds at treasurydirect.com (2 accounts, 10$k per person)

that would give you about %8 return over the 15 months (can't withdraw the money for a year, and they delay paying interest for the first 3 months)
 
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herm0016

Diamond Member
Feb 26, 2005
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So it's hard to tell here what your timeline is for the investment and your risk for the money is. Right now the market is very low and could dip a bit lower, but over 5-10 years will probably give pretty good gains. Tech is in the middle of a correction and may yet go a bit further down, but should rebound some with time. Real estate has been doing very well over the last year or two compared to most of the market, but probably won't perform as well in the near term.

If I had 60k I'd split it up between several funds, probably a mid-cap, a large cap, and REITs, which should diversify pretty well and give an average 8-10% / yr over the next few years.

If you want to go low risk, you could do bonds, which are at least doing a few percent now. Fidelity has 5 year bond funds doing about 7% return, 3 years doing about 2%.
this.

we are 20 years out and own a lot of public market stuff. looking to diversify in VC and REIT's. Bonds are about even with inflation so I may avoid at this time, unless you want nearly 0 risk.
 

jpiniero

Lifer
Oct 1, 2010
11,512
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I'd do nothing right now. Wait until after the Fed's June meeting at the earliest. Bonds could easily get crushed too.. maybe less than stocks but still quite bad.
 

herm0016

Diamond Member
Feb 26, 2005
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I'd do nothing right now. Wait until after the Fed's June meeting at the earliest. Bonds could easily get crushed too.. maybe less than stocks but still quite bad.
there is always something to wait for, you could wait the rest of your life to start investing and end with with nothing.
 

nOOky

Platinum Member
Aug 17, 2004
2,334
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So it's hard to tell here what your timeline is for the investment and your risk for the money is. Right now the market is very low and could dip a bit lower, but over 5-10 years will probably give pretty good gains. Tech is in the middle of a correction and may yet go a bit further down, but should rebound some with time. Real estate has been doing very well over the last year or two compared to most of the market, but probably won't perform as well in the near term.

If I had 60k I'd split it up between several funds, probably a mid-cap, a large cap, and REITs, which should diversify pretty well and give an average 8-10% / yr over the next few years.

If you want to go low risk, you could do bonds, which are at least doing a few percent now. Fidelity has 5 year bond funds doing about 7% return, 3 years doing about 2%.
The money could sit there for 10 years, I think we won't realistically retire until we feel comfortable, and I'm only 54, she is 56. My current investment "strategy" if you could call it that is rather medium risk overall, but we have been making great gains up until recently. Not interested in real estate, part of the reason I'm thinking about using this money is because my limited knowledge of the subject thinks it may be a good time to buy when it's low. I feel like I'd have to at least cover inflation. The financial advisor gets about 1.125% which seems about normal, does that seem crazy, should we be doing this ourselves?

I will have to spend a bit of time researching this, I appreciate the replies.
 

brianmanahan

Lifer
Sep 2, 2006
22,771
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The financial advisor gets about 1.125% which seems about normal, does that seem crazy, should we be doing this ourselves?
yeah that is pretty darn high. all too common, but the effect over a decade or two can be quite large.
 

AdamK47

Lifer
Oct 9, 1999
14,007
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I can't think of any scenario right now where it would be advisable to pay off 0% loans early.

Mutual funds / ETFs are always a good move long term. The only problem is the when. The market is full of uncertainty right now with the fed holding it's hand over the interest rate button. The first rate hike was an opening move. The second one will set a precedent for future hikes. That will be a decent (not great) time to make a decision. There are also concerns of a recession looming.
 

jpiniero

Lifer
Oct 1, 2010
11,512
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there is always something to wait for, you could wait the rest of your life to start investing and end with with nothing.
The risk that the market plunges is very high. The only reason it hasn't so far is because of (well founded) skepticism that the Fed is serious.

Assume the main purpose of the Fed's policy is to compel RTO haters to go back to the office (among other things). How far do you think the market has to drop to make that happen?
 
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deadlyapp

Diamond Member
Apr 25, 2004
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The money could sit there for 10 years, I think we won't realistically retire until we feel comfortable, and I'm only 54, she is 56. My current investment "strategy" if you could call it that is rather medium risk overall, but we have been making great gains up until recently. Not interested in real estate, part of the reason I'm thinking about using this money is because my limited knowledge of the subject thinks it may be a good time to buy when it's low. I feel like I'd have to at least cover inflation. The financial advisor gets about 1.125% which seems about normal, does that seem crazy, should we be doing this ourselves?

I will have to spend a bit of time researching this, I appreciate the replies.
When I say real estate, I don't mean directly investing in houses or commercial, but holding a fund that is across real estate / impacted by real estate markets. These would be REIT funds and similar.

And also, important to recognize that your advisor may get 1.125% but funds will also have an expense ratio that could be as low as a fraction of a percent, or up to 1% or higher, which would not be included as part of the advisor. They're going to be inclined to offer funds that they may be kicked back for, unless this advisor is also a fiduciary.
 

dullard

Elite Member
May 21, 2001
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Mathematically the best thing is to buy whatever returns the most. Two problems with that. (1) You don't know what will return the most and (2) you aren't a math problem. You have feelings and emotions and needs. Because of this, I personally feel that we shouldn't just optimize math, we should also consider quality of life.

For example, retiring with a mound of debt is something that you might want to avoid. You owe at least $124,000 (plus credit cards or anything else that comes up). Will you be able to pay that off in 6.5 years? If not, then you'll have added stress when you retire with debt. It is such a great feeling when you have a home, fully paid for, and owe nothing more than what you put on the credit card this month. So, in your situation, I would find out how much debt that I would have when I retire. Then I would use the $60k to pay off that much from the house. Suppose you were going to owe $40k at retirement. Then, put $40k of that into the mortgage and invest the remaining $20k. You don't have to do this, but I think quality of life is worthy of considering too. At your age, you should start investing somewhat more conservatively, so it isn't like returns (especially after advisor fees) will be that much higher than the savings you get on your mortgage interest.

With the money that I would invest, it honestly is not that much. At least not enough to bother splitting into many different investments. I'd plop it into a S&P 500 fund and sit back and enjoy life. No need for an advisor for such a simple thing. Remember, if you get 5% per year for 20 years, then that $60k would earn you $67k for doing all the risk but it will earn the advisor $32k for doing nothing but telling you generic advice. 5% over the long run is fairly close to what you would expect since you won't likely be fully into stocks in your mid 50s.
 
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beginner99

Diamond Member
Jun 2, 2009
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Choose something like 3 stock funds and then make regular payments into them (eg DCA). How regular depends on the fees on the service you use. Ideally weekly or if too costly fee-wise monthly but larger. This means 20k into each fund. hence seems reasonabel to invest 3k per months (1k per fund). by not buying all at once you get a more average price which helps especially if the market crashes.
 
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nOOky

Platinum Member
Aug 17, 2004
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Mathematically the best thing is to buy whatever returns the most. Two problems with that. (1) You don't know what will return the most and (2) you aren't a math problem. You have feelings and emotions and needs. Because of this, I personally feel that we shouldn't just optimize math, we should also consider quality of life.

For example, retiring with a mound of debt is something that you might want to avoid. You owe at least $124,000 (plus credit cards or anything else that comes up). Will you be able to pay that off in 6.5 years? If not, then you'll have added stress when you retire with debt. It is such a great feeling when you have a home, fully paid for, and owe nothing more than what you put on the credit card this month. So, in your situation, I would find out how much debt that I would have when I retire. Then I would use the $60k to pay off that much from the house. Suppose you were going to owe $40k at retirement. Then, put $40k of that into the mortgage and invest the remaining $20k. You don't have to do this, but I think quality of life is worthy of considering too. At your age, you should start investing somewhat more conservatively, so it isn't like returns (especially after advisor fees) will be that much higher than the savings you get on your mortgage interest.

With the money that I would invest, it honestly is not that much. At least not enough to bother splitting into many different investments. I'd plop it into a S&P 500 fund and sit back and enjoy life. No need for an advisor for such a simple thing. Remember, if you get 5% per year for 20 years, then that $60k would earn you $67k for doing all the risk but it will earn the advisor $32k for doing nothing but telling you generic advice. 5% over the long run is fairly close to what you would expect since you won't likely be fully into stocks in your mid 50s.
Everything will be paid off when we retire. Without going fully into all our finances, we also have a business to sell when she retires that we aren't really figuring into our retirement funds. We are working on a 5 year plan to have someone come in and take over the business and buy it out. Typically veterinarians bring in a new vet, they earn an income while the wife is still owner, then if all goes well they take out the loan to buy her out assuming past income and earning potential are there.

The extra 60k is right now sitting in the wife's emergency fund earning nothing, but doing the math her emergency fund is way too big, so we have decided to parse that out and try and make money from it. We still don't want to play with it and risk it, but right now with inflation being what it is it seems like it's hard for an average person to even cover that without getting too risky. Hence the appeal for advice here.
 
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Shmee

Memory and Storage, Graphics Cards
Super Moderator
Sep 13, 2008
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Hmm, a good question. I would look into certain stocks, like AMD, that look promising. Or certain coins, such as BTC or ETH.
 

Red Squirrel

No Lifer
May 24, 2003
62,877
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twitter.com
If I ran across 60k today I'd pay off the mortgage and credit line. Not exactly investing, but getting rid of debt is sorta an investment. I would then see a financial advisor to see what kind of investment setup is good for me and then put whatever went to the mortgage towards that instead. Probably do Index Funds, GICs or something along those lines.
 

otho11

Member
Feb 16, 2011
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20k to ibonds, the rest in a basic 3 fund portfolio.

Ditch the advisor if you're confident you won't panic sell during a recession, or have a unique complicated situation. Vanguard, Fidelity, etc make it simple to manage .
 
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skyking

Lifer
Nov 21, 2001
20,261
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Thanks for the link, that looks like something I can handle lol.
It just beats the hell out of picking one thing, and having it be the wrong thing. We just got started at the very end of last year and have yet to buy our bonds for this year. Everything else is pretty much in the market in one form or another or in some bond funds which are still funds.
 

ultimatebob

Lifer
Jul 1, 2001
25,135
2,429
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An S&P 500 Index Fund would be a good way to go. Now is the time to buy low!

Of course, it would be more exciting to invest it all in Dogecoin... not that I would recommend it!
 

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