What to do with ~$100,000 in savings?

[thanhn]

Say you have >$100K but less than $150K sitting in a credit union. What should he/she do with it to help it grow given the following...

1. No debts at the moment.
2. 2 kids in college but scholarships have made out of pocket <10K/year for both kids.
3. Have a separate savings for other 2 kid's college fund already.

Real Estate? CD's?

Thank you for your advice!

[Bayspieler]

That would depend on:

1. How old are you?

2. What do your other assets and liabilities look like?

3. About how much do you earn and save now?

4. What, in 50 words or less, is your life plan?

[sherylgray]

I suggest to invest in real estate. Also are you carrying any debt or bad credit. If yes, get rid off it first. Take help of some financial advisor. They will really help you a lot in an effectively way for investing.

[bjl584]

That would depend on:

1. How old are you?

2. What do your other assets and liabilities look like?

3. About how much do you earn and save now?

4. What, in 50 words or less, is your life plan?

This.

It's hard to say without knowing more details.

[thanhn]

That would depend on:

1. How old are you?

2. What do your other assets and liabilities look like?

3. About how much do you earn and save now?

4. What, in 50 words or less, is your life plan?

1. 41

2. Mortgage paid off and no car debts.

3. Spouse & I make <100K/year. Save about ~$40,000/year?

4. Not sure to be honest.

[MakeAStash]

You might find the following link to be a decent overview of retirement investment basics. http://www.fool.com/retirement/gener...-in-style.aspx

[violet80907]

Real Estate? CD's?

You don't say how much your house is worth, but I'll guess that it is a significant portion of your total net worth. If that is true, I would suggest real estate would be the last place you would want to invest your savings; only because you need to diversify.

It is also not 100% clear if this is all of your savings, or just a portion. If you don't have an emergency fund, then you really need to keep this savings liquid; I.E. NOT real estate.

I'll also second sherylgray, and suggest a discussion with a financial planner sounds in order.

[snafu]

Your question leads to other questions...Does your and wife's employer's contribute to retirement plans? Do you both contribute or maximize? What type? What value? What is your plan for the next five years 2013 - 2018? At age 50, do you see yourselves in current residence, with same employer and positions?

Are you seeking a plan to invest current savings $ 100.K or wanting a plan going forward including about $40.K each year? What is your RISK tolerance? Can you tolerate seeing value moving down as well as up over time and still sleep at night? Many of us realize that the super low interest rates of the past few years has made savings lose buying power to inflation and not growing as in the past.

It's common to divide up savings to invest in various levels of risk and therefore products. Like savings a/cs, CDs likewise offer super low rates with locked in dates. Real estate is not very liquid [easy to convert to cash in a few business days]. REITs are an alternate form of Real Estate investment for example. Are you familiar with Mutual Funds [MF} and Exchange Traded Funds {ETFs}?

[jpg7n16]

2. Mortgage paid off and no car debts.

Well, that's half the answer. What other assets do you have?

How much in IRAs? 401ks? Trading accounts? Annuities? Any pension sources?

3. Spouse & I make <100K/year. Save about ~$40,000/year?

And save that $40k where? 401k, etc. -- or just building up cash on hand?

I'm curious as to how you left all the other investment options off your list. You have way more options than just Real Estate and CDs, why'd you pick those two?

Also curious -- what made you start looking into this now, as opposed to say a few years back?

4. Not sure to be honest.

From: Alice's Adventures in Wonderland by Lewis Carroll

"Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said the Cat.
"--so long as I get SOMEWHERE," Alice added as an explanation.
"Oh, you’re sure to do that," said the Cat, "if you only walk long enough."

If you have no idea what you hope to accomplish by investing, then it doesn't really matter which way you invest.

[Bayspieler]

First, congratulations. It sound like you are doing well.

If you don't already have an emergency fund, then I'd suggest keeping about $40K of this money for your emergency fund. Invest the rest.

For that money that you invest, I'm guessing you're looking at keeping it invested for about 20 years before you begin thinking about taking it as cash.

I understand that you can make a lot of money investing in real estate if you know what you're doing. If you're 41, and you're unsure, then you don't know what you're doing, and you should stay away from that.

I'd suggest you read a book or two about how to invest your money rather than take my advice. I'll suggest Tobias's 'The Only Investment Guide You'll Ever Need.'

If I must answer, I'd say to make sure you fund your and your spouse's IRAs for 2012 and 2013 as soon as possible, and for your investments, put 60% in a stock index fund and 40% in a bond index fund. Any additional investment money you get, allocate the same way, re-balancing as needed.

Then, in the meantime, keep checking here and other places to find new and interesting ways to live frugally.

[BuckyBadger]

Assuming no outstanding debts or large upcoming purchases I would do the following: (If you already have any of these things, skip and move on to the next.

1) Set aside about 3-6 months of expenses in cash, depending on your comfort level.

2) Immediately open a Roth IRA for you and for your wife and deposit $5k into each account for 2012.

3) After the first of the year, deposit $5.5k into each of those account for 2013.

4) Max out all tax advantaged accounts -- 401k, 403b -- with your paychecks, and use the cash to make up the difference you need to live on.

The goal here is to funnel all that money into tax advantaged retirement accounts. You can do that my maxing out your 401k and Roth contributions and using the cash for living expenses. Money is fungible, so it doesn't matter which "dollar" you're spending and which "dollar" you're inventing, your end game should just be to get as much money into tax advantaged accounts as possible so that it has the longest possible time to work for you before retirement.

You should look into a three fund "lazy" portfolio consisting of the following index funds: total US stock, total US bonds, and total International stock. Choose an asset allocation appropriate for your age and risk tolerence (age in bonds is a good one), rebalance your investments once a year, and sit back and relax -- you're done!

[97guns]

real estate hands down, everyone is so concerned with what his primary residence is worth and how much your contributing to your 401K but fail to realize real estate is a vehicle better than a 401K that will give you monthly passive income and give great tax benefit. in most area's grossing 10%-15% on your money is the norm.

[Jon Spiels]

I suggest that you start a business with it if you have the budget for a business that way you will earn money...