Hypothetical question here

**PMMM** · 03-30-2011, 02:09 PM

I would educate yourself and invest the money yourself in the stock market. You can make some decent money if you play your cards right. Much more than any bank would pay. I would put away a good 6 month emergency fund in a very liquid asset. For instance a no penalty CD or other money market type instrument.

And then I would use the rest to invest. If you don't have any Roth IRA's I would max that for sure and then maybe open a Scottrade or some other online brokerage account to invest the rest. You can get some fine education yourself online and rather than pay someone else to invest (Who may not do any better then you.)you can do it yourself. I'm not a huge fan of ETF's but there are lots of mutual funds to choose from. I don't invest in individual stocks simply because I don't have the time.

Pat

**disneysteve** · 03-30-2011, 02:18 PM

I would keep a 3-6 month emergency fund in liquid accounts: checking savings, money market, maybe some laddered CDs. How I would invest the rest would depend on my overall asset allocation plan so I really can't answer that without knowing the big picture. It depends how your existing accounts (IRA and 401k) are currently invested and what your intended allocation is.

**Slug** · 03-30-2011, 03:19 PM

What Steve said except maybe some bond laddering as well.

**krantcents** · 03-30-2011, 04:01 PM

What is your risk tolerance? Depending on your answer, it will dictate your investment strategy. The your asset allocation and ultimately your investments.

**Mr Nice Guy** · 03-30-2011, 07:19 PM

First of all I want to congratulate you in achieving that sum of disposable cash. You haave options, and options are great.

If you are well-versed in investing in any of the investment vehicles available, go that route. From your post I would venture a guess and say you are not.

Since you have a considerable amount of money to invest, I would maybe ask or hire a professional with a good record to help you. If that does not interest you, I urge you to hit the library.

**canada94** · 03-31-2011, 12:18 AM

Originally posted by listerine View Post

Hi guys; first post.

I just had a quick hypothetical question on investing.

Given that I'm a single 50 year old female who has paid off her mortgage, maximizes contributions to my IRA and 401k plans, and have 100k in cash savings (but no further investments besides my retirement accounts), how would you invest (or not invest) that 100k? Index funds? ETFs? Stock market? Bonds? Under the mattress (not actually serious)?

Just interested in peoples' opinions.

Making your money work for you is what matters, also leverage is critical,if you invest 100k in the stock market you get 100k worth of stcks...no leverage.
On the other hand, if you invested only 10k into property, you can leverage that by 10 with a motgage, so as long as you purchase the property below market value, and your rental value is higher than your mortgage expenses,job done.
There are plenty of books on how to do this, i would recommend any by Robert Shemin.

Hope this helps

Kevin

**Hector** · 03-31-2011, 02:46 PM

Originally posted by Mr Nice Guy View Post

First of all I want to congratulate you in achieving that sum of disposable cash. You haave options, and options are great.

If you are well-versed in investing in any of the investment vehicles available, go that route. From your post I would venture a guess and say you are not.

Since you have a considerable amount of money to invest, I would maybe ask or hire a professional with a good record to help you. If that does not interest you, I urge you to hit the library.

I firmly believe that indexing with proper AA is a lot more effective than any plan suggested by a hired professional.

**MonkeyMama** · 03-31-2011, 03:04 PM

Personally, I'd keep the whole $100k in cash.

That said, not enough known about your whole financial picture to give relevant advice.

I would not give this advice to many 30-year-olds. But, you said you were 50. As you near retirement, I think its important to have more cash on hand. For many people, 50 seems the crossover point for chronic unemployment, etc. Age discrimination, etc. Throw in more potential for health problems, etc.

Of course, this depends on how much you need to live on, your risk tolerance, and your overall financial picture. When I am 50, I would expect $100k to be a very small piece of my portfolio, and it would be very reasonable to keep that much in cash.

Many people are taking on more risk and chasing higher returns due to low interest rates. To me, that is a temporary problem and I am not going to risk my cash for higher returns. Cash serves a purpose of liquidity, and is generally FDIC-insured (i.e. safe). Though bonds are a reasonable alternative, you have to understand the risks.

**Robert742** · 03-31-2011, 04:19 PM

I would keep a good chunk, if not all in cash, too.

If you want to put more toward long-term(10 year or more) or retirement savings, I would dollar-cost average into equity index funds, because they are low-cost, tax efficient, and don't require a lot of work like stocks. You should choose index funds considering your current plan for asset allocation. Bond & Stock funds paying interest or dividends should be kept in tax sheltered accounts. If you do not know your asset allocation, you need to educate yourself on the subject, or hire a fee-only planner to help you with it.

A lot of older people put off retirement due to the 2008 stock market crash because they were taking on too much risk by have too much of their money in stocks too close to retirement.

Don't take more risk than you need to make your investment goals.

Hypothetical question here