If you had $800,000.00 what would be the safest and fastest way to make it grow?
- Thread starter Arkitech
- Start date
$800,00.00? How much is that?
Eight hundred thousand?
Eighty Thousand?
Eight Hundred?
In other words, where's the comma SUPPOSED to go?!
Commas can make a big difference!
Eight hundred thousand?
Eighty Thousand?
Eight Hundred?
In other words, where's the comma SUPPOSED to go?!
Commas can make a big difference!
The safest investment is US Treasury securities. But the return will be the one of lowest available. CD and other bank rates are pretty bad right now, often less than Treasury rates.
Before you can decide what to do with the money, you have to have goals and time horizons mapped out. If some of it is needed many years from now, that portion would need a different strategy than the piece that might be needed in a year or less.
Before you can decide what to do with the money, you have to have goals and time horizons mapped out. If some of it is needed many years from now, that portion would need a different strategy than the piece that might be needed in a year or less.
Yup, safe=low return and fast=high risk. jjm's points are important.
You can get a terrific education on what you need to know by reading the investment bood suggestions at bobbrinker.com It is imperative that you get that education. He usually suggests parking the money in a good money market fund at one of the big houses like Vanguard while you get that education. You need to know about asset alocation, diversity, no load funds, index funds and tons of other stuff. What you don't want to do is get into a situation where the advise you get makes somebody else rich.
You can get a terrific education on what you need to know by reading the investment bood suggestions at bobbrinker.com It is imperative that you get that education. He usually suggests parking the money in a good money market fund at one of the big houses like Vanguard while you get that education. You need to know about asset alocation, diversity, no load funds, index funds and tons of other stuff. What you don't want to do is get into a situation where the advise you get makes somebody else rich.
HardcoreRobot
Lifer
- Nov 7, 2000
- 16,403
- 3
- 81
diversify! (actually im not sure *exactly* what this means or any specifics i just hear it a lot in terms of investing). either way im sure some member of this extremely qualified community will come up with something
I may be coming into a large sum of money very soon and I'd like to find out how much I can earn from the interest.
what are the average return rates for CD accounts?
better yet does anyone know of any sites that deals with finances?
what are the average return rates for CD accounts?
better yet does anyone know of any sites that deals with finances?
- Oct 28, 1999
- 62,484
- 8,345
- 126
Diversify would be doing something like this:
Putting 10% in a high risk, small cap market index
Putting 10% into bonds
Putting 10% into real estate
Putting 10% into tax free municipal funds
Putting 10% into commodities
Putting 10% into CD's
Putting 20% into an S&P 500 index fund
ect...
You get the idea. Basically, you want a nice breakdown. You want some of your money to be in the high risk, but high gain area, such as small cap market. You want guaranteed income such as in the bonds and CD's. The Bonds are also inflation rate dependent, so if inflation goes skyhigh, you'll do good there. The S&P 500 index fund is a hodge podge of hundreds of companies that make up the stock market, and the index fund directly reflects how the stock market does. It has no key areas - IE tech, utilities, financials, ect, so you won't make or break yourself if a particular area flourishes or flounders. In the past, the 500 index has pulled about 12% a year.
Milage may very depending on how you break it up, and just how much risk you want to assume.
Did you get a big ass inheritence or something?
Putting 10% in a high risk, small cap market index
Putting 10% into bonds
Putting 10% into real estate
Putting 10% into tax free municipal funds
Putting 10% into commodities
Putting 10% into CD's
Putting 20% into an S&P 500 index fund
ect...
You get the idea. Basically, you want a nice breakdown. You want some of your money to be in the high risk, but high gain area, such as small cap market. You want guaranteed income such as in the bonds and CD's. The Bonds are also inflation rate dependent, so if inflation goes skyhigh, you'll do good there. The S&P 500 index fund is a hodge podge of hundreds of companies that make up the stock market, and the index fund directly reflects how the stock market does. It has no key areas - IE tech, utilities, financials, ect, so you won't make or break yourself if a particular area flourishes or flounders. In the past, the 500 index has pulled about 12% a year.
Milage may very depending on how you break it up, and just how much risk you want to assume.
Did you get a big ass inheritence or something?
- Oct 28, 1999
- 62,484
- 8,345
- 126
CD's really vary with the interest rates. Right now, short term interest rates are really low, so CD interest rates suck! Last I looked a 12 month CD would pull about 4.5% annually. Bleh!
12 months ago, a 12 month CD would have pulled in nearly 6.5% annually.
12 months ago, a 12 month CD would have pulled in nearly 6.5% annually.
I would invest
1/4 in real estate - for rentals
1/4 in stocks
1/4 in setting up a business
1/4 in bank
if you want to be safe
or
1/3 real estate
1/3 stocks
1/3 business
if you want to be more aggressive.
1/4 in real estate - for rentals
1/4 in stocks
1/4 in setting up a business
1/4 in bank
if you want to be safe
or
1/3 real estate
1/3 stocks
1/3 business
if you want to be more aggressive.
glenn1
Lifer
- Sep 6, 2000
- 25,383
- 1,013
- 126
Without knowing your personal situation, it would be tough to make recommendations. Before you do anything else though, you should take the following steps:
1. Review your current finances, and determine what your current assets, liabilities, net worth, and estimations of future income streams.
2. Review and ensure you have current and appropriate insurance coverage, legal papers (will, living will, etc.)
3. Pay off any unsecured debt you have. You should have NO credit card debt, etc. if you have the ability to make it so, even if it requires your entire windfall to make it so. Unsecured debt is a financial cancer.
4. Put together a financial planning team consisting of an attorney, insurance agent, CPA, and financial advisor. All parties should be made aware of and note any potential problems with recommendations made by other members of your financial team (decisions significant enough to be able to significantly impact another aspect of your financial life).
Congratulations on your good fortune, and best of luck to you
1. Review your current finances, and determine what your current assets, liabilities, net worth, and estimations of future income streams.
2. Review and ensure you have current and appropriate insurance coverage, legal papers (will, living will, etc.)
3. Pay off any unsecured debt you have. You should have NO credit card debt, etc. if you have the ability to make it so, even if it requires your entire windfall to make it so. Unsecured debt is a financial cancer.
4. Put together a financial planning team consisting of an attorney, insurance agent, CPA, and financial advisor. All parties should be made aware of and note any potential problems with recommendations made by other members of your financial team (decisions significant enough to be able to significantly impact another aspect of your financial life).
Congratulations on your good fortune, and best of luck to you
I would probably put about 40% of it into mutual funds, and then the other 60% I would invest in companies that I knew would do well like maybe ten grand in each so that if one does really bad the others would probably make up for its loss. I think that nortel would be good to invest in now because it is around $15 cad and it was $80 cad so it will probably go up pretty soon
kranky
Elite Member
- Oct 9, 1999
- 21,019
- 156
- 106
It would be nice if you could turn it over to a certified financial planner and then sleep soundly until retirement. But with that kind of money comes the responsibility to learn how to manage it.
Yes, you SHOULD get with a CFP and discuss how it should be invested. A good one will end up asking you more questions than you ask of him/her. And at the same time, you need to read up on investing. No one is going to care as much about your money as you do, and even though you might get the most brilliant CFP in the world, you still need to understand the reasoning behind the recommendations the planner makes. You also have to understand the tax implications of certain moves because they can weigh heavily on your net earnings.
Understand that $800,000 at 8% will grow to over $3.7 million in 20 years. At 5%, it's $2.1 million. A big difference, wouldn't you say? Knowing what you are doing and having good advisors will make the difference.
To answer your question about the interest, going with a safe 5% return (which would be something like bank CDs or government bonds) would earn $40,000 in a year. Of course, if you are spending the interest, you don't end up with the $3.7 million in 20 years.
jjm, vi_edit, moonbeam and glenn1 all had good advice.
[edit]Just as a footnote, I remember it was just about a year ago that I had a discussion with a member here (I think it was gorth) regarding investing in individual stocks. He was high on JDS Uniphase and had a lot of reasons why it was destined to go up, up, up. At that time JDSU was selling for about $80 a share. Today I noticed JDSU is selling for $10. Individual stocks are too risky for casual investors. If you are going to follow stocks closely, that's a different story. [/edit]
Yes, you SHOULD get with a CFP and discuss how it should be invested. A good one will end up asking you more questions than you ask of him/her. And at the same time, you need to read up on investing. No one is going to care as much about your money as you do, and even though you might get the most brilliant CFP in the world, you still need to understand the reasoning behind the recommendations the planner makes. You also have to understand the tax implications of certain moves because they can weigh heavily on your net earnings.
Understand that $800,000 at 8% will grow to over $3.7 million in 20 years. At 5%, it's $2.1 million. A big difference, wouldn't you say? Knowing what you are doing and having good advisors will make the difference.
To answer your question about the interest, going with a safe 5% return (which would be something like bank CDs or government bonds) would earn $40,000 in a year. Of course, if you are spending the interest, you don't end up with the $3.7 million in 20 years.
jjm, vi_edit, moonbeam and glenn1 all had good advice.
[edit]Just as a footnote, I remember it was just about a year ago that I had a discussion with a member here (I think it was gorth) regarding investing in individual stocks. He was high on JDS Uniphase and had a lot of reasons why it was destined to go up, up, up. At that time JDSU was selling for about $80 a share. Today I noticed JDSU is selling for $10. Individual stocks are too risky for casual investors. If you are going to follow stocks closely, that's a different story. [/edit]
Go to a financial planner. Tell him that you want to earn 10% on it for the rest of your life. He/she can make it happen easily with that size of initial money.
The first year, you earn $80,000 (pre-taxes). Keep the 800,000 invest plus add 20,000 to compensate for 2.5% inflation. You could spend 75% of your interest every year (beginning with $60,000 the first year) and never go broke. Since you're compensating for inflation, the amount you get every year increases appropriately (61,500 in the second year, for example).
The first year, you earn $80,000 (pre-taxes). Keep the 800,000 invest plus add 20,000 to compensate for 2.5% inflation. You could spend 75% of your interest every year (beginning with $60,000 the first year) and never go broke. Since you're compensating for inflation, the amount you get every year increases appropriately (61,500 in the second year, for example).
TRENDING THREADS
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 24K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes Discussion Threads
- Started by Tigerick
- Replies: 20K
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
-
Facebook
Twitter