Recently came into a lot of money...

elektrobank · #1 (**permalink**) 09-08-2009, 12:43 PM

I've been a longtime business owner, but recently things picked up considerably and I have a very large chunk of money sitting in my savings account, which is growing every day. I'm 30 and have been maxing out my SEP IRA. Right now that money is making about 1.5% in my savings account. What's the best thing to do with this money? I want to keep a good piece of it readily available to possibly put towards some real estate, but the rest can be wrapped up in some more long term investments.

Are there any kinds of shorter term investments that I can put all my money in that would be very low risk (obv low return too), but would give me a better return than my bank and give me access to my money at any time?

How should I go about determining how to invest the rest of it? Who's the best person I can discuss investment strategies with?

Any advice would be appreciated.

disneysteve · #2 (**permalink**) 09-08-2009, 01:02 PM

Quote:

Originally Posted by elektrobank

Are there any kinds of shorter term investments that I can put all my money in that would be very low risk (obv low return too), but would give me a better return than my bank and give me access to my money at any time?

If you want access to your money at any time without penalty, you are pretty much limited to bank accounts, money market accounts and money market mutual funds. Anything else would have some time restriction or early withdrawal penalty. You could do a short term CD, like 90 days, but that probably isn't paying any more than a MMA right now.

arthurb999 · #3 (**permalink**) 09-08-2009, 02:17 PM

Just hold on to it... make sure you're not over the fdic insurance amount... if so, spread it around.

shultice24 · #4 (**permalink**) 09-08-2009, 08:38 PM

How bout this- you use the money to self-publish a book explaining how you actually made money in such a downer economy. If it's legit it should sell like hotcakes.

jasonnoguchi · #5 (**permalink**) 09-25-2009, 04:57 AM

I would be looking to invest a significant portion of that money into short term government bonds if I were you. I would also be looking to park some money into the recovering real estate market.

shultice24 · #6 (**permalink**) 09-25-2009, 08:23 AM

Quote:

Originally Posted by jasonnoguchi

I would be looking to invest a significant portion of that money into short term government bonds...

CD's and savings accounts are paying crap right now, but still much better than treasuries are. You are literally almost as well off just to hide it under the mattress.

LuxLiving · #7 (**permalink**) 10-11-2009, 01:13 PM

How soon do you see yourself using the Real Estate portion?

Snodog · #8 (**permalink**) 10-11-2009, 02:38 PM

Even if you are making only 1% or so in a savings account it is not as bad as it seems. With inflation running near zero or negative you are comming out ahead.

InsuranceGuy · #9 (**permalink**) 10-16-2009, 01:07 PM

For your long term portfolio, you might consider a fixed or indexed annuity account. They are low to no risk and offer much better rates than bank instruments right now.

snafu · #10 (**permalink**) 10-16-2009, 11:01 PM

Inflation is lurking given the sums sloshing around. Desperation has driven investors into the stock mkt. which accounts for the DOW increase since March. I suggest you take note of the value of the US dollar relative to other currencies.

It appears there will be another tranche of mortgage defaults as those who have lost jobs will be unable to keep up payments. It's full of RISK but read up on S. America if you want to keep value for that 'chunk of money.'

Scanner · #11 (**permalink**) 10-17-2009, 11:17 AM

Fixed annuities, South America. . .what's next? Silver?

buildmybudget · #12 (**permalink**) 10-17-2009, 12:28 PM

As a relatively young business owner, you should determine how much cash you need to continue to run your business. Pay off any personal debt and then establish an emergency fund for yourself using either a cd ladder, mma, or savings account. Next interview two or three financial advisers to try and find one that you are most comfortable investing with. These advisers can help you invest whatever you have leftover according to your level of risk. However, I think at 30 you are better off taking some risk(especially during this market rebound) in order to try and gain some higher returns while you are still young. Good luck!

tripods68 · #13 (**permalink**) 10-18-2009, 10:25 AM

I like GNMA (Vanguard) paying around 4.5%.

AtlantaLife&Health · #14 (**permalink**) 10-22-2009, 12:34 AM

Cash Value Dividend Paying Whole Life Insurance! Did you know that Tiger Woods has a policy with New York Life that he dumps money into each year? Why does he do this? Because NYL pays dividends each year if they make out better than they expected. They are a mutual company, meaning they are owned by its policy holders. If they make a profit, who gets paid? YOU. With AIG, they are a stock company, owned by shareholders. If they make a profit, the investors get paid. Call a NYL agent in your area and tell them some crazy broker gave you this crazy idea. There are other Mutual companies but NYL is the best.

shultice24 · #15 (**permalink**) 10-22-2009, 11:55 AM

Elektrobank definitely had a valid question, but unfortunately it was a hanging curveball for the insurance salespeople on these forums. LOL.

Scanner · #16 (**permalink**) 10-23-2009, 09:33 AM

LOL. . .forgot. . .cash life insurance policies. . .didn't think of that one.

Tell you what elektrobank. .. just give me your money and I will send you a check every month after a certain time.

I promise.

I'll even put it into writing being the honest guy I am.

Scanner · #17 (**permalink**) 10-23-2009, 09:38 AM

Seriously though, you will have to separate the good advice from the questionable.

If you don't have time/willingness to learn on your own (buy a few basic books), then I would recommend asking a CPA/CFP (a lot of them carry the dual certification/license). for advice. Their advice tends to be as unbiased as possible and you can link it with your 4rth quarter tax advice, etc. You'll pay a fee for time/expertise.

Don't ask a broker. A broker is a salesman selling products, of which many are inappropriate. The term "financial advisor" has also been a code word for "broker" or "sales agent" at many companies.

The financial community has got to learn to divorce their investment advice from the products they are peddling. Until then, proceed cautiously.

saving peter · #18 (**permalink**) 11-09-2009, 12:55 AM

One certainly mustn't write off the stock martkets just because we've hit a particularly rough patch. It would be a good idea to prioritize your expenses heads, set money aside for those you'll readily need cash for (put them into a short term instrument) and figure out how much you can put into long term investments. Invest these in long term instruments (3 to 5 years) like stocks / bonds. Since your business is doing well, you could even think of an SIP.

disneysteve · #19 (**permalink**) 11-09-2009, 10:54 AM

Quote:

Originally Posted by saving peter

Invest these in long term instruments (3 to 5 years) like stocks

3-5 years is NOT long term. Money needed in that time frame doesn't belong in stocks.