What would you do (savings or investment-wise) with $10,000? Where would it make you the most money?
Education/job training to a job where demand is high.
Dear Friend -
I am the daughter of exiled Nigerian Prince Arhab Amunajeed, deceased. My father’s wealth has been seized by the Congolese government, but I have secured the services of a lawyer who assures me he will be able to get all of my father’s wealth - $3.2 million - returned to the family.
The lawyer fee is $10,000. If you will assist me with this fee, I will send you 10% of my father’s wealth once it has been recovered from the Congolese.
Please send me the following information:
BANK ACCOUNT #
ACCOUNT HOLDER NAME
ACCOUNT HOLDER ADDRESS
ACCOUNT HOLDER SSN
BANK SWIFT CODE
I will set up a trust in your name to deposit 10% of my father’s wealth once it has been retrieved.
Thank you for your assistance, God bless you!
I would take half to my friend Asadullah, who works in securities…
On a more seriious note, how old are you? Every investment vehicle matches risk to reward, and the older you are the less risk you should take.
Is $10K all the money you have in the world, or did a rich uncle die and leave you a windfall? If you lost it completely, would it wreck your life, or would you be no worse off than you are right now? Is there something you need (not just want) to do with the money – replace your car that needs a new engine and transmission, fix your roof, improve your education, etc?
I read the OP as being “rich uncle windfall” type money, and the whole point is to maximize the ROI you’d get on it. Obviously, time will factor in, but frankly, I’m curious to read and learn about different types of investing.
Social lending. I get about 7% (probably more) a year that way. As an investment manager once said, I’m “getting rich the same way banks get rich.” You’ve got $10,000 and other people don’t- make them pay to use it.
Banks don’t get rich lending out a few thousand bucks at paltry interest rates. They get rich leveraging their capital to the hilt and charging you when you overdraw your checking account.
As will risk. How much are you willing to lose in order to get a high expected ROI?
You’ll make a lot less than that if someone defaults.
To answer the OP, it depends.
How long before you anticipate needing the money? Six months, a year, 10 years, never because you plan on leaving it for your kids?
Your investment horizon is the primary factor in deciding what you should invest in.
Are you more concerned about income or principal preservation?
I wouldn’t mind a link to a site…
Lending Club - Chessic Sense, drachillix and I, and a few others, have been periodically updating that thread.
Obviously this is NOT a non-risk use of the money. I’ve earned about 45 dollars in interest in the past year but have a loan owing just over 20 (to me; the whole loan values quite a bit higher) which will wipe about half of the profits. This is on initial investment of nearly 600 dollars.
Thank you. I’d heard of these types of things, but hadn’t ever searched one down. (Having the right key phrase helps a lot.)
Yeah - the other big one in the US is Prosper.com which I’ve heard VERY mixed reviews about (they had some bad methodology going at first and a large percentage of lender/investors were losing money overall - like more than half or something like that).
Chessic Sense posted some pretty good analysis toward the end of the other thread.
So I see. Unfortunately I’m in the minority of states that can’t play.
I’d probably keep it in the bank as a preventative/emergency maintenance fund to keep me from having to go into debt when needed.
Dental bills that insurance doesn’t fully cover, car maintenance and repairs, home maintenance and repairs, vet bills, speeding tickets, unemployment funds, emergency travel, etc.
As far as making money on it while it sits there I’d probably through it into a low/no fee index fund.
I’m in commercial real estate, but quite frankly if I had 10K floating I’d identify a close, inexpensive, local residential property for sale that I can purchase and rent where the seller will hold a mortgage note and give great deal. Use the $ 10,000 for down payment.
If you choose the right property and structure the loan properly you can have nice rental that throws off a 10%+ annual return. The flip side is -
1: Finding deal like this usually takes a lot spade work
2: Owning residential rental can be a huge PITA if don’t have decent tenants. If you choose the house and tenants wisely it can be a great deal that pays for itself and has large upside down the line.
If you don’t need it for a long time, stick it in a Roth IRA.