unexpected money, what to do with it?

[ragamoffyn]

Hi, all. I recently received a small sum of money from an investment in a friend's tech startup that was purchased by another company. After taxes and some other expenditures, it'll probably come out to maybe $10,000 or so. I'm wondering what to do with it.

I have about $45,000 in student loans that I'm paying off. However, those are at a fixed rate of 2.25%, so it's probably not urgent to pay those off immediately. Instead, I'm wondering about perhaps investing the money for a little while in something like Google or Apple.

I'm not a very experienced investor, and I'm risk-tolerant mainly if the money is going into some retirement fund for a long time. However, this is found money, sort of -- I hadn't budgeted for it, and although I would dislike losing it if the market takes a tumble, it wouldn't be a disaster for me.

I'm guessing that if I sit the money in one of the tech giants, I perhaps have a decent chance of earning more than the 2.25% interest I'm paying on my loans. Is that a valid assumption, do you think?

Thanks for any advice.

[bjl584]

Well, if you don't care if you lose it, then you might as well be risky with it. or at least a little riskier. Maybe instead of investing in a bellwether, try to look for some smaller companies. Maybe some high dividend payers or even a high dividend REIT or bond fund. If I had a "free" 10K that showed up at my front door and I didn't care if I lost it all, and I didn't intend to pay down debt with it, then I would defenitely go high risk with it.

[Slug]

Already maxing a 401k and Roth this year?

[ragamoffyn]

Already maxing a 401k and Roth this year?

Well, yes and no. I'm living in Norway currently, so I'm contributing to retirement savings here. But I haven't put anything into my U.S.-based retirement accounts...

[chasingbread]

Hi, all. I recently received a small sum of money from an investment in a friend's tech startup that was purchased by another company. After taxes and some other expenditures, it'll probably come out to maybe $10,000 or so. I'm wondering what to do with it.

I have about $45,000 in student loans that I'm paying off. However, those are at a fixed rate of 2.25%, so it's probably not urgent to pay those off immediately. Instead, I'm wondering about perhaps investing the money for a little while in something like Google or Apple.

I'm not a very experienced investor, and I'm risk-tolerant mainly if the money is going into some retirement fund for a long time. However, this is found money, sort of -- I hadn't budgeted for it, and although I would dislike losing it if the market takes a tumble, it wouldn't be a disaster for me.

I'm guessing that if I sit the money in one of the tech giants, I perhaps have a decent chance of earning more than the 2.25% interest I'm paying on my loans. Is that a valid assumption, do you think?

Thanks for any advice.

I would invest it into p2p lending. I started experimenting with p2p lending about 15 months ago with Prosper. I choose them because they are the first and most recognized company in p2p. I have made $27.6K in the 15 months in interest. Basically, you purchase "notes" from the company by investing into people who are looknig to borrow money at a interest rate. The rate depends on how good their credit is. It IS very risk but there are some very good and worthy borrowers on there.

Google Prosper and goodle sociallending. The latter is a blog about p2p which teached you a lot. It is still all fairly new but very promising.

Check out and let me know what you think.

[Frugal]

If it were me personally (and I don't know your exact situation, so it might be different!), I would spend some of it, maybe half, on student loans. I had a small, small unexpected windfall last year, and put about $1,000 towards my student loans. It really helped pay down the principal faster. I still owe a lot, though, which stinks!