I received a check in the mail today for $10,000 USD. Now What?

I received a check in the mail today for $10,000 USD. With the current exchange at my bank this is $11,458 CAD (Grrr. Crap exchange rate. I’m all for this strong Canadian dollar UNTIL I need to exchange US.)

At the moment I plan on letting this sit in my US funds account until the exchange rate is better, then I’m converting it to Canadian and doing something with it.

This money is going to be apart from our regular savings (a mix of various things). I’d like to do something interesting with it. Perhaps an investment in stocks, a slightly risky fund of some sort, gold, silver,… I don’t know.

I’m not in a huge rush. Once I convert it to Canadian it will sit in a savings account and get 3.5% until I decide what to do with it.

So? Any ideas from the dope? What would you do with $10-12k -and don’t say pay off bills. Consider you’re all paid up and only have $100 in debt.

Can you invest it while it’s still USD?

I’d shop around for different investment opportunities. In general when I invest I prefer to do so in a mixture of long-term and short-term funds/CDs/whatever. Since I can’t be bothered looking at how the stock market is doing (which seems to be half the point to most direct-investors I know), I usually invest through a bank. My bro the financial manager recently suggested that since stocks “often have losses short term, but in general can be trusted to go up long term,” my attitude about it may actually make it a Good Idea to pick a “solid” company that’s not likely to go bust unless the CFO, CEO and President are found gang-banging a two-year-old, put money in there and come back a couple years later to get my cooked egg back.

I could leave it in USD but I’d rather not.

I’d invest any spare cash of that magnitude that I had. I know you said that you don’t want to keep it in US$, but since it already is and you’ve expressed dissatisfaction with the exchange rate, I’d put it in a US$ mutual fund until either the exchange rate is more to your liking or you need the . I've never used a US mutual fund, but I’m sure TD Canada Trust isn’t the only bank that has several of them (their mutual funds are the ones I pay closest attention to since all my non-RSP mutual funds are there).

Putting it in a US$ mutual fund insulates you from currency fluctuations (at least until the fluctuations are in a direction you like).

Blow it all on Hookers and Booze. Sure, you won’t have anything to show for it [del]except that STD[/del], but think about the memories you’ll [del]forget[/del] have.

Um, are there any strings attached to this ‘check’?

Well, obvously the Nigerians will be taking $30,000 in fees, just until the main tranche of $50,000,000 comes through.

Hard to advise without knowing your financial state. If you can’t risk losing it, stay away from gold, silver or other commodities. Safest bet is bank CDs, but the interest isn’t much. If you are looking at stocks, I would first subscribe to an inexpensive stock newsletter such as Louis Navellier Blue Chip Growth to get some recommendations. Ditto for mutual funds, although you can do your own research and not get burned too badly.

If there’s any chance you might want to use it in the next five years or so, I’d invest it in something relatively stable like a monkey market fund. Several Vanguard money market funds are returning a bit over 5%. If you plan to leave it alone for 5-10 years, I’d stick it in a mix of no-load index funds, probably something like 60% S&P 500 index, 20% small-cap index, 20% international.

My personal feeling is that the stock market has too much potential volatility in it right now to be a worthwhile risk over the next few years. However, history has shown that time heals all wounds, stock-wise, so if you can leave it alone for long enough that might be the best choice.

I’d invest it into my foundation. Just send me the check (sign it please), and I’ll send you a handsomly framed certificate of appreciation whith which you can proudly display your philanthropy.

No, it’s not safe there. You’d better send it to me and I’ll take care of it for you.

I think Chefguy and Giraffe said it best. Also, I think it would be a horrible idea to invest in precious metals right now, the past 6 years have shown unprecedented growth in what is generally thought to be an underperforming sector. If you are going to go the risky route (narrow specialty funds or individual stocks) you should be aware of the risks, in many cases it means risking the entire sum. Also, remember that something that has done really well in the past few years may be over priced and the point is to buy low not buy high.

Have you maxed out your retirement funding? Can you put any of this into the Canadian equivilant of an IRA or 401K?

By leaving it in USD for a time, you’re effectively investing the currency market between the US and Canada (although, not efficiently).

What makes you think the exchange rate will be better in a few months?

If it’s for long term, index fund. Short term, high yield online savings account (which also pay 5+%, and don’t have the risk that a Money Market account does).

Got any Big Stupid Debt you can get rid of, like credit-card debt? Use it on that. It doesn’t sound like you do, though.

Need to put more into your RRSP or your six-months-expenses savings? Do those. Again, it doesn’t sound like you do.

Now, with all those taken care of, you can do things like:[ul][li]Knock a chunk off your mortgage, if you have one.[]Fix your car, if needed.[]Go on a semi-modest spending spree.Invest in something.[/ul]I put those in the order of importance that I would have used, although car repairs may be more important if you depend on your car. (I live where I don’t need one.)[/li]
Investing, though…? I think that you have to keep track of what’s going on in the world to have a chance at being good at that, and even then, it’s a gamble. I strongly suspect that investors too often concentrate too hard on the bare financial facts of their investments and neglect wider factors that may make financial forecasts obsolete. Questions arise, such as, “Is your investment target in the headlines, and, if so, why?”

:: rereads OP ::

Now, what I, specifically, would do with it?

It’s not quite enough for a downpayment on land up north, so I would do the next best thing: Buy a new computer. Buy software for that new computer. Use said computer and software and the money to get my new business underway, and make more money (I hope).

Which is another way of saying that I would be investing in personal relationships and community at least as much as financial markets.

Oh, and I’d pay for that summer trip to Japan.

Agree with Giraffe. Park it in a large, quality money market for awhile. Take your time.

The S & P 500 is over 1400 these days. The time to have funded the index was last June when the S & P was under 1250. If this sounds like the Bob Brinker newsletter, you’re right.

Once your money is parked, drop by your library and check out “Common Sense on Mutual Funds” by John Bogle.
After you’ve digested that book and you feel you might want to be brought up to speed on vocabulary, check out “Wall Street Words from A to Z” by David Scott.
Both books are very readable…and because you’re interested in the subject, very interesting.

By the time you finish them the S & P might have started a healthy correction below the 1250 mark again and it’ll be time to put your knowledge to work.

Sorry to interrupt, but this just made me chuckle so I figured I’d share.

Carry on. :smiley:

Do you have an investment guy? Have you gone over your short-term and long-term goals? If so, how does this fit in? If not, get yourself a guy. Not some guy in the phone book; someone with a big-name organization or your bank.

If it were me, I’d top up my RRSP this year if I needed a tax break, pop most of it into an index fund my guy’s got me into that’s doing rather well, and maybe keep a few K in my money market fund or a GIC until I’m ready to redo my kitchen and bathroom.

Dang it, beat me by 10 minutes.

“Monkey market.” Heh.