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How best to invest 10k

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johnglen
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How best to invest 10k  Reply with quote  

I have $10,000 USD that will come into my possession in a few days. I have a dilemma with how best to invest that money. A certain bank guarantees me it'll become $20,000 in 10 years (I can't touch it for those 10 years). Is the value of $20k in 10 years be worth what it is now? (due to inflation).
Is it better to use that money as a down payment towards my first house?
I don't know much about finances so I am seeking knowledgeable peoples' opinions.
Thank you.
Post Thu Nov 15, 2012 3:31 pm
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coaster
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First of all, doubling your money in 10 years is no big deal. That's only about seven and a half percent compound annual growth. Less than the average market growth over the long term. So ask yourself, where is the difference going? It's into their pockets, of course. Banks are the worst possible place to go for investment advice and management. It's well known that their wealth management business is a huge profit center for them. You're much better off investing your money either on your own or with a money manager who has no vested interest in selling you commission-based products.

~Tim~
Post Thu Nov 15, 2012 4:03 pm
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littleroc02us
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I have a few questions for you:

1. How old are you?
2. What types of debt do you have?
3. Do you plan on buying a house?
4. Do you solely not want to touch this money for a while and just invest it?

Ronald Reagan once noted the basic difference between Democrats and Republicans. “Republicans believe every day is the Fourth of July,” he said. “Democrats believe every day is April 15th.”
Post Thu Nov 15, 2012 4:22 pm
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oldguy
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The 'Rule of 72' may be of use to you - when the 'years' X 'rate' = 72 your money doubles. Eg, 8 years at 9%, 10 years at 7%, 6 years at 12%.

As Tim said, Banks are good for banking - checking, savings, CDs, annuities, and other other non-growth issues - but they are bad for investing. High fees, poor choices. Instead, use a no-load fund company such as Fidelity of Vanguard, that is their business. (I use the SP500 Index Fund).

Using 3% inflation, your $10,000 will have a purchasing power of about $7500 in 10 years. But that is true no matter what investment that you choose, ie, it is not part of your decision.

When I buy houses (rentals) I put the minimum down and retain my own cash for investing. Then, if necessary, I sell some of my stocks for the required down payment. The idea is to borrow as much as I can at 4% and keep mine invested it at 10% or 11%.
Post Thu Nov 15, 2012 5:07 pm
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johnglen
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Thank you for your quick responses.
I'm 31. Have a steady job. No debt. I do plan on buying a house in the next 1 year. I don't need the 10k right now.
Post Thu Nov 15, 2012 11:20 pm
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Publius
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If you are planning on buying a house in a year and you would need this 10k to be at 20% down (the amount you will generally need to avoid private mortgage insurance (PMI)), then just stick it in a money market account so it will be there when you need it.
Post Fri Nov 16, 2012 2:36 am
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coaster
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To reiterate what Publius said, any money you're going to need that soon should not be exposed to any market risk: ie its principal value will fluctuate both up and down. Over the long term, the up fluctuations overbalance the down fluctuations and that's why the stock market is the best place to put money long term. But short term, it's 50-50 whether it will be up or down in a year, and if you're going to need the money then, you don't want to take a 50% chance it's going to be down.

~Tim~
Post Fri Nov 16, 2012 6:44 am
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The Analyst
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Here is my strategy;

I suggest you to keep 50% cash as savings and then start investing the rest in 3 steps:

1) first 20% in one investment body and
2) then if things go wrong, invest another 15% to fix the average cost.
3) you can keep the final 15% for new opportunities
Post Fri Nov 16, 2012 10:25 am
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littleroc02us
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Save the 10k in a money market until you buy a home. If you can avoid PMI, do so it's more money saved then wasted.

Ronald Reagan once noted the basic difference between Democrats and Republicans. “Republicans believe every day is the Fourth of July,” he said. “Democrats believe every day is April 15th.”
Post Fri Nov 16, 2012 2:21 pm
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TimGreer314
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Well let's look at all of your options. You have $10,000, which means you have a much better start than most people. The idea behind investing is to grow your money into wealth as quickly as possible, and you will have options.

Start looking at some very high yielding stocks. Look at the history over the past 20 years. Look for trends, see what times of the year is best to own, and when is the best time to sell. Solid investment won't have much down turns, and if it does it doesn't stay down too long.

Next call around and find the best savings, and checking accounts with good interest rates. Most of the time you will find special rates for new costumers. If they don't have rates better than 1% don't be afraid to ask.

Another thing to look at is do you have lots of pawn shops and coin shops? One good investment is stopping in to those places and look for silver coins, which are much cheaper than gold. Another great way to get into silver is check out yard sales, and thrift stores. Look for metal dishes. If you find either .925 or steirling silver on the item, buy it only if it is cheap. Base the price of the item on the weight and spot price of silver for the day.

Finally research all the different investment you can make. Look at the ROI (Return on Investment) and determine if this is a good investment for you.

You have to remember to make investments based on what your goals are, and not what others feel are strong investment. What may be a great investment for me, may not work for you. Time plays an important role in how we invest.

Best of luck to you with all of your investment.
Post Fri Nov 16, 2012 4:42 pm
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Benjuwin
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Its a good amount and according to me, you should invest this money with stock exchanges as well as markets otherwise Forex trading is also good option for you to invest this money.
Post Fri Jan 25, 2013 1:29 pm
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Anton Martin
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Re: How best to invest 10k  Reply with quote  

quote:
Originally posted by johnglen
I have $10,000 USD that will come into my possession in a few days. I have a dilemma with how best to invest that money. A certain bank guarantees me it'll become $20,000 in 10 years (I can't touch it for those 10 years). Is the value of $20k in 10 years be worth what it is now? (due to inflation).
Is it better to use that money as a down payment towards my first house?
I don't know much about finances so I am seeking knowledgeable peoples' opinions.
Thank you.


Well what you are thinking that "Using this money for down payment towards new house" is good option, but I would like to recommend you to invest some amount of money in stocks so that you can get good returns from it and may be you will get it quickly.
Investing in Stocks is little risky and you may loose your money too, but if you invest smartly with prior research of which company stocks are consistent and good enough to invest, it will make sure that you are putting your money in right place and you can expect good returns from it.
Good Luck........
Post Tue Feb 05, 2013 12:42 pm
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tajul2010
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Re: How best to invest 10k  Reply with quote  

quote:
Originally posted by johnglen
I have $10,000 USD that will come into my possession in a few days. I have a dilemma with how best to invest that money. A certain bank guarantees me it'll become $20,000 in 10 years (I can't touch it for those 10 years). Is the value of $20k in 10 years be worth what it is now? (due to inflation).
Is it better to use that money as a down payment towards my first house?
I don't know much about finances so I am seeking knowledgeable peoples' opinions.
Thank you.



What I say is nothing but think before you leave
Post Fri Feb 08, 2013 11:50 am
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