# If you go a hundred grand, what would you invest it in? **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [December 23, 2007, 9:04pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050 "2007-12-23T21:04:05Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![diggleblop](https://avatars.discourse-cdn.com/v4/letter/d/ac91a4/32.png) [@diggleblop](https://boards.straightdope.com/u/diggleblop)\ **Post date:** [December 23, 2007, 9:04pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/1 "2007-12-23T21:04:05Z")
Now, I know nothing in the financial world is definite. But if you got a check tomorrow for a hundred thousand US dollars and wanted to invest it to possibly turn it into a million over the next ten years, how and what would you do? I ask because this is the case for me within the next two weeks. I mean, I know about IRA, CDs and other stuff like that. Not something that will give me 500 bucks after investing it, earning interest and leaving it untouched for one year. I’m talking about investing in something and making real money. Or would you start a business, something like that? What would even be some good stock that has been growing and growing? Obviously, I’m lost when it comes to these matters. lol thx ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [December 23, 2007, 9:45pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/2 "2007-12-23T21:45:54Z")
If you’re looking for long-term, invest in businesses, organisations, or funds that promote energy efficiency. ---
**Author:** ![Sunspace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/sunspace/32/1250_2.png) [@Sunspace](https://boards.straightdope.com/u/Sunspace)\ **Post date:** [December 23, 2007, 9:48pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/3 "2007-12-23T21:48:02Z")
“…” ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [December 23, 2007, 9:58pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/4 "2007-12-23T21:58:39Z")
First thing I would do with $100k is pay off all my bills. That will free up even more money to invest. Then, I would put aside three to six months’ worth of expenses in a savings account, so in the event of a job loss or an emergency, such as a broken down car, you’re not panicking. Then, I would invest the rest in a good growth stock mutual fund. With your debts gone, you can continue to add to the investment, and you have an emergency fund for stuff that may pop up. Good luck! ---
**Author:** ![diggleblop](https://avatars.discourse-cdn.com/v4/letter/d/ac91a4/32.png) [@diggleblop](https://boards.straightdope.com/u/diggleblop)\ **Post date:** [December 23, 2007, 9:59pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/5 "2007-12-23T21:59:53Z")
Growth stock mutual fund. eh? Thanks, I’m gonna look into that. ---
**Author:** ![ivylass](https://avatars.discourse-cdn.com/v4/letter/i/9de053/32.png) [@ivylass](https://boards.straightdope.com/u/ivylass)\ **Post date:** [December 23, 2007, 10:06pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/6 "2007-12-23T22:06:42Z")
You want one that averages 12% growth. Don’t worry what it did last year…look at the 10-20 year trend. If it has more growth years than loss years, it’s probably good. My husband and I have 5 mutual funds through [vanguard.com](http://vanguard.com). Each was $1000 to open, with a minimum $100 after that, up to $4000 a year because of our age. Because the funds are worth less than $10k right now, there’s a $10 annual fee. I find investing extremely easy, the site is easy to navigate, and a good two hours of research got us started. I am not a financial planner. YMMV. I don’t know your age or your financial situation. It may be better for you to do other things with your money than throw it all in a mutual fund. ---
**Author:** ![susan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/susan/32/17537_2.png) [@susan](https://boards.straightdope.com/u/susan)\ **Post date:** [December 23, 2007, 10:36pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/7 "2007-12-23T22:36:24Z")
What you don’t want to do is dump it all in one place. A financial advisor can help you diversify your investments so that you have some high risk, high yield options and some moderate risk, medium yield. You want a financial advisor who isn’t panicky and who can help keep you calm if short-term trends are bad on any of your investments, and at the same time will advise you to divest if the indicators suggest that. ---
**Author:** ![Scuba\_Ben](https://avatars.discourse-cdn.com/v4/letter/s/278dde/32.png) [@Scuba\_Ben](https://boards.straightdope.com/u/Scuba_Ben)\ **Post date:** [December 23, 2007, 10:56pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/8 "2007-12-23T22:56:26Z")
[QUOTE=diggleblop] Obviously, I’m lost when it comes to these matters. lol thx [/QUOTE] Given your admitted level of knowledge, I strongly encourage investigating no-load S&P 500 index funds. Terminology follows: “No-load”: The fund does NOT charge a sales fee. “S&P 500 index”: The fund mirrors the Standard & Poor’s 500 Index, the 500 largest stocks in the US by market value. S&P 500 index funds normally have very low costs and are essentially a bet on big-company stocks as a whole. **ivylass** had excellent advice as well, which bears repeating as a fundamental element of good financial management: Pay off all major bills, especially credit cards – and keep them paid off! Then put aside $10-20 thousand in a high-yield savings account through your preferred bank. ---
**Author:** ![Yllaria](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yllaria/32/3452_2.png) [@Yllaria](https://boards.straightdope.com/u/Yllaria)\ **Post date:** [December 23, 2007, 11:32pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/9 "2007-12-23T23:32:29Z")
I’ve heard that it’s possible to invest in funds that are part of your IRA. Again, a financial adviser can help you decide if that’s a good idea to reduce your current tax bite. Were it me, I would go for an adviser that was paid by an hourly fee and that did not get commissions from selling you the funds or insurance or anything else. A lot of advisers have no or a low fee, but have a conflict of interest between their commissions and your best interests. ---
**Author:** ![Boyo\_Jim](https://avatars.discourse-cdn.com/v4/letter/b/87869e/32.png) [@Boyo\_Jim](https://boards.straightdope.com/u/Boyo_Jim)\ **Post date:** [December 23, 2007, 11:34pm UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/10 "2007-12-23T23:34:45Z")
FOB cocaine. ---
**Author:** ![Oregon\_sunshine](https://avatars.discourse-cdn.com/v4/letter/o/50afbb/32.png) [@Oregon\_sunshine](https://boards.straightdope.com/u/Oregon_sunshine)\ **Post date:** [December 24, 2007, 12:13am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/11 "2007-12-24T00:13:58Z")
Well, it doesn’t necessarily apply in your situation, but if I got a hundred grand, my student loans would finally go away…(and I’d have $25,000 for gifts, art supplies, and other playthings)! ---
**Author:** ![Onomatopoeia](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/onomatopoeia/32/4145_2.png) [@Onomatopoeia](https://boards.straightdope.com/u/Onomatopoeia)\ **Post date:** [December 24, 2007, 12:19am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/12 "2007-12-24T00:19:18Z")
The first thing I’d do is pay off my home equity loan, car and boat. I’d throw the rest, about $20k, in the bank somewhere. ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [December 24, 2007, 2:24am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/13 "2007-12-24T02:24:43Z")
Always remember that financial advice from strangers on the internet is worth exactly what you’ve paid for it. That said, I’d recommend that you open an account with one of the big investment banks–Merrill Lynch, Goldman Sachs, Lehman Brothers, etc.–and talk to the financial advisor your account is assigned to. They’ll quiz you about your goals, your assets and liabilities, and your tolerance for risk and help you to figure out what’s right for you. ---
**Author:** ![John\_Carter\_of\_Mars](https://avatars.discourse-cdn.com/v4/letter/j/2bfe46/32.png) [@John\_Carter\_of\_Mars](https://boards.straightdope.com/u/John_Carter_of_Mars)\ **Post date:** [December 24, 2007, 2:50am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/14 "2007-12-24T02:50:12Z")
You can educate yourself very easily. It ain’t rocket science. Buy a few magazines and avoid advisers and brokers. There’s an old joke: “The broker made money and the company made money and two out of three ain’t bad”. _The Only Investment Guide You’ll Ever Need_ by Tobias is good. That title may not be exactly correct, but it’s close enough. I’d put 50% in the Vanguard S & P 500 Index Fund and the other 50% in one of their balanced funds. Always be patient and don’t panic over short term ups and downs. ---
**Author:** ![ParentalAdvisory](https://avatars.discourse-cdn.com/v4/letter/p/53a042/32.png) [@ParentalAdvisory](https://boards.straightdope.com/u/ParentalAdvisory)\ **Post date:** [December 24, 2007, 3:34am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/15 "2007-12-24T03:34:48Z")
If you decide to go the investing in stocks/bonds route… Obligatory link for these questions \> [Investment Planning - Bogleheads.org](http://www.diehards.org/forum/viewtopic.php?t=6211) I’m a Diehard and Boglehead, so by default, I’m a fanboy of Vanguard, but recognize the benefits of other good companies like Fidelity and T. Rowe and would only recommend those. First things first, pay off your high-interest, short term debts. Sink the rest into a money market or FDIC savings account earning at least 4.75% (it’s getting smaller these days). Next, sit on it and educate yourself before doing anything for at least six months\*. You know how parents don’t want to teach their kids about sex as seen in porn? The financial industry is just like that and you need to filter the facts from fiction. Hence your need to get educated before doing anything too quickly and wondering if you made a mistake later on. You must know that to make a million dollars in 10 years off of 100k today, would require an extreme amount of risk to get there and is unlikely to happen unless you get real lucky. You must recognize the need to be realistic. Investing today, if you earned 10% per year, your money will double approximately every 10 years, and that’s with a well set up asset allocation in various funds blended with stocks/bonds and staying the course. I would avoid individual stock investing like the plauge. The fees, taxes, and your time to maintain them is a colossal waste of time and money. You will here great tales of anecdotal stories of success investing this way, but very few succeed this way. Don’t buy into the hype. If you decided to go with a financial advisor, go with one that comes recommended and is hourly fee based, and one that doesn’t sell expensive pyramid scheme mutual funds (front-load, back-load, high expense ratio, etc…). Beware of the ones that want to line their own pockets before yours. You should post your quesiton on the Diehard forums I linked to above into the personal finance forum. You will get great responses from very knowledgable people for your specific situation. I also recommend the book _The Bogleheads’ Guide to Investing_ as a starter for mutual fund investing. Easy to follow and is common sense. As [John Bogle](http://en.wikipedia.org/wiki/Boglehead) says: Select low-cost funds Consider carefully the added costs of advice Do not overrate past fund performance Use past performance to determine consistency and risk Beware of stars (as in, star mutual fund managers) Beware of asset size Don’t own too many funds Buy your fund portfolio – and hold it \*Check your eligibility to see if you’re eligible to invest in a Roth IRA in 2007/2008 if you don’t already have one ($5000 limit for 2008). This is something I would recommend right away in January (or up to next April 15 for 2007, limit is $4000). You could start with a “Target Retirement” fund. They’re named for the time frame of your expected retirement year (i.e TR 2035, TR 2040, TR 2045, etc…). The asset allocation of these types of funds automatically adjust for your risk in age. More stocks vs. bonds when you’re younger for aggressiveness and growth, and more bonds vs. stocks for conserving your cash when you inch closer to retirement. You do nothing but contribute! ---
**Author:** ![MEBuckner](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mebuckner/32/2896_2.png) [@MEBuckner](https://boards.straightdope.com/u/MEBuckner)\ **Post date:** [December 24, 2007, 3:35am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/16 "2007-12-24T03:35:25Z")
[QUOTE=diggleblop] But if you got a check tomorrow for a hundred thousand US dollars and wanted to invest it to possibly turn it into a million over the next ten years, how and what would you do? [/QUOTE] This is probably a very unlikely goal. You’re asking for something that can generate a consistent return of around 26% a year. Anything that pays that well is going to have to be very, very risky–you might make a million in ten years, or you might wind up making nothing and losing the hundred thousand you had to start with. Such an investment may also require hard work–use the money to start a business, you could be a millionaire in a decade, or you could lose it all, and you’ll likely have to work hard and put in long hours either way. If you just want to invest it, a more realistic expectation might be, say, 7% (that is, as an average–some years you might do better; other years worse). That’s a sort of pulled-out-of-thin-air number, but it’s more likely than turning 100K into a million in ten years, which isn’t easy. With 7%–don’t forget taxes, let’s say 7% after taxes–you would basically double your money in ten years. That’s not bad at all, especially if you’re talking about just passively investing. ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [December 24, 2007, 4:29am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/17 "2007-12-24T04:29:02Z")
[QUOTE=Scuba\_Ben] Given your admitted level of knowledge, I strongly encourage investigating no-load S&P 500 index funds. [/QUOTE] You are a man after my own scuba heart. Whenever someone asks me what to do with their money, my stock response is pretty much always to shout “NO-LOAD INDEX FUND.” The costs are minimal, the diversification is excellent, and the long-term growth potential is right in the sweet spot, and almost no work is required. I’ve been extremely happy with my funds through Vanguard (the bulk of which is in the S&P500 index). ---
**Author:** ![diggleblop](https://avatars.discourse-cdn.com/v4/letter/d/ac91a4/32.png) [@diggleblop](https://boards.straightdope.com/u/diggleblop)\ **Post date:** [January 4, 2008, 7:29am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/18 "2008-01-04T07:29:28Z")
By the way, thanks guys and guyettes. I’ve been reading and learning over the past ten days. ---
**Author:** ![Will\_Repair](https://avatars.discourse-cdn.com/v4/letter/w/a698b9/32.png) [@Will\_Repair](https://boards.straightdope.com/u/Will_Repair)\ **Post date:** [January 4, 2008, 7:37am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/19 "2008-01-04T07:37:44Z")
Hookers and Ripple. … ---
**Author:** ![Tapioca\_Dextrin](https://avatars.discourse-cdn.com/v4/letter/t/3d9bf3/32.png) [@Tapioca\_Dextrin](https://boards.straightdope.com/u/Tapioca_Dextrin)\ **Post date:** [January 4, 2008, 8:07am UTC](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050/20 "2008-01-04T08:07:04Z")
[QUOTE=diggleblop] But if you got a check tomorrow for a hundred thousand US dollars and wanted to invest it to possibly turn it into a million over the next ten years [/QUOTE] Just find a nice, secure investment that yields around a 24% return. :dubious: [Next page](https://boards.straightdope.com/t/if-you-go-a-hundred-grand-what-would-you-invest-it-in/431050.md?page=2)