$230K in savings, $300K income, best way to invest it ?

[JBinKC]

It depends upon the how long you intend to keep this money "safe". If its short term by all means keep it in a interest bearing money market account but if you are intending to keep the money in a cash for a longer term I probably would look into currency ETFs with my "safe" money. There is some short term risk but if you look at the macroeconomic picture, its hard believe that you are not going to lose if you keep you store of wealth in dollars.

My big problem is when you leave it in a US derived after tax interest bearing account you are going to make less income less than the rate of inflation thus lose spending power on you capital over the long run and I believe at a faster rate than in the past.

Our currency is bound to lose its value faster than published inflation given we print it at a rate of 16% per annum and a system so derived upon accumulating debt and importing goods.

[TMoney]

I think you should pay off all your debts first. Is there some reason why you have not paid them off yet? No point in paying interest rates when you don't need to, that's just letting money go to waste each month (unless your interest rate is below what your return rate would be, but i'd pay it off).

Next, like many of the others said, you should start some kind of retirement account, SEP IRA, Roth, etc.

I also disagree on the idea of the rental properties, only because you don't have the time to manage them, otherwise I'd say, go for it! I'm on the east coast, if you ever need someone to help manage em, i'm in, haha.

But seriously congrads on your early success, and welcome to the board.
I'm 25 and wouldnt mind being in your shoes at 29!

[secretlyrich]

JBinKC: Thanks for the heads up about currency ETFs. I'm plan on investing with ETFs soon (reading "The ETF Book" now, and have a couple others)

TMoney: I agree about the unnecessary interest, but my student loan is at 2% interest. I upgrade my car every year or 2 , so I'd rather have that cash on hand and earning interest than paying it off (I would lease, but I dont like the mileage restrictions). Thanks for the kind words.

I'm very happy I found this board !

[jIM_Ohio]

Thanks for all the replies so far ! I appreciate them all

As to the questions posed :

maat55:
I never said or mentioned that I had no idea about investing. Just be cause I solicit opinions on the best ways to invest a chunk of money does not mean I have no idea about investing


jIM_Ohio:
1) what are annual expenses for living?
I use a number of programs (e.g.: Quicken) to track my expenses, and its about $60K annually

2) what are annual expenses for the business (list only fixed expenses)
less than $10k
3) what are annual variable expenses for business?
less than $5k
4) retirement comment needs some adjustment- you appears to contradict yourself asking to invest, but not wanting to invest for retirement. You need to be clear about the investments step- so you get appropriate advice.
Sorry for the ambiguity. I do want invest to some degree for retirement, I just dont want that to be my sole reason.

zetta:
Just wondering about the $300k figure. Is that gross revenue, net profit, or the salary that you pay yourself?
The $300K is gross salary I pay myself.

5k per month for expenses, I would open 12 different 5k CDs (90 days, 120 days and 150 days, 180 days etc..). When these mature, rollover to a 1 year CD. You will have 12 CDs, each with 1 months expenses in them. I would do this to tie up money to where you need to put in effort to cash them in. These cover you for 1 year if business goes belly up.

10k for fixed business expenses. I would keep 20k in a money market account for the business. I would try to make sure this account is never below 20k. This allows you to keep business for two years even if you are not turning a profit.

Annual Variable expenses- 5k. I would keep 5k in a cash account for business. if you have wages to pay, I would also add these to the variable expenses- at least enough to get through 6 months of bad times.

This ties up 85k of the 230k you have in cash now.

I would then invest the rest for retirement. If you are self employed, I would look to create a SIMPLE IRA or solo 401k. You can then defer taxes on much of the income you set aside for retirement (for example you could contribute $15,500 for yourself to solo 401k, then also give yourself a 200% match at $31,000 for then year and not pay any taxes on the $46,500 you put into the 401k).

[maat55]

maat55:
I never said or mentioned that I had no idea about investing. Just be cause I solicit opinions on the best ways to invest a chunk of money does not mean I have no idea about investing

Didn't mean to offend you, just a little shocked that this money hasn't been invested already. I didn't start learning much about investing till I was your age, but I didn't have any money either.

80% conservative and 20% aggressive seems a little too conservative at your age. There are plenty of MF's out there that average 12% and better to choose from. Sorry if I affended you, good luck.

[m3racer]

The bottom line is do what you feel most comfortable with.....It's your money. I just find it amusing how there are people on this forum that are quick to criticize about $$$ allocation when it's not their's. Remember that it's your $$$ on the line.