Im a 25 year old male that recently came into some money. I want to invest it into something that I can live off and start a family with in the next couple years. In the past 9 years I have lived in 3 different countries with various successful people over seas and attended a fairly good university in London. I haven’t lived in the US since I was 16. Im back now living in Western Washington thinking about settling down, starting a family and doing something with my life. I would say my strong characteristics are; Im very tech savvy and Im knowledgeable in travel and international relations. I also have some experience with guesthouse management. I have about $300,000 right now to start doing something with my life.
If anyone has any advice or experience with franchises please let me know. I am open to all advice.
There are so many different kinds of franchises available, I think that question is impossible to answer in a general sense. Several years ago I looked into a few fast food franchise options, and $300k wouldn’t have been enough to get up and running with them, though maybe there are some for which it would be. Are there any specific business you’re considering?
[ul]
[li]How long since your returned to the USA?[/li][li]How long have you been in Washington State?[/li][li]How are you supporting yourself now?[/li][/ul]
The point of my questions is to establish some sort of basis for you. Regardless of how you will respond, you need to spend at least six months becoming acclimated to where you live right now, in the real world, living a regular life (undefined).
During this time, put the money in a place where the principal is most important. So forget the stock market, for the moment. Even a few bank CDs would be fine for now.
You need to talk with people, investigate, maybe even be a grunt employee at a franchise place, just to get the feel for what you intend to do. No matter how anxious you may feel to hit the ground running, taking six months to a year researching, investigating and living a regular life, will more than be made up in a higher potential for success. Anything less than that and I guarantee you will lose your investment and fail.
Sink some money into an annuity. It will give you some income while protecting your principle. Then, when you can redeem it, you’ll have a few years experience under your belt. Should know better then what sort of business suits you.
I would think something very renewable, if that is the right term, would be a good bet. Iow, a product that keeps on having a need. Realty, photography, cleaning, etc… Best to get some experience in any field, tho, before you start shelling out major cash
I would only buy a franchise if there is something you’re really, seriously interested in doing.
Unless you know lots about investing, seek the advice of a fee based financial planner before doing so. I personally don’t care for annuities.
You mentioned starting a family sometime soon. Does that include buying a house? If so, you may wish to keep some of the money fairly liquid for a down payment.
Another vote for getting experience in a field that interests you as job one. Learn an industry (or two) from the bottom rungs climbing up some as if you have no nest egg and your advancement is the only lifeline you have. Meanwhile invest the money in a fairly low risk manner - a basket of index funds including broad market, bonds, and possibly small amounts of others for diversification. Try not to touch it until you know what you want to accomplish and that you have enough experience and knowledge to do that thing better than others are doing it. The exception to that would pretty much only be if the goal you set yourself on requires more eduction and you need to dip into it for that.
Give life a few years to lead you. You plan on settling down? Are you partnered now? Or do you mean you will start dating with intent to find the one? There too, don’t try to force life onto a schedule.
What had been your job goals before coming into the money?
Personally, I would shove the whole chunk into a low-expense-ratio index fund, such as the Vanguard 500. You’re young and can ride out the fluctuations of the market. The money is still easily accessible in case you want to put a down payment on a house or something.
However, that’s because I’d be looking at growing a nest egg for early retirement. You may have different goals.
Agreed.
Put it in index funds and forget you ever had it.
Figure out what you’re interested in and concentrate on your career for the next 40 years. When you retire those index funds will be a God send.
I’d diversify it more- not just in one fund, for one thing. I think I’d put it in multiple sorts of securities- various mutual funds, bonds, etc…
Then like they said… forget that you ever had it. You’ll likely earn at least 5% annually, which will double your money by the time you’re 40, (more or less; there are overhead charges, and the historical rate of return on stocks is around 8%)
Another vote for investing and forgetting you ever had it. When I was 30 I had a $2000 investment in a retirement plan that was invested rather conservatively (and ignored) - 35 years later it is worth 30 times that.
Don’t ask for advice here - try at Bogleheads (great Wiki too) or the FIRE forums. Here is a recent topic that is somewhat applicable.
Prudent (and low cost) investment of that sum could lead to an excellent and early retirement.
When it comes to financial advisors, remember these points:
[ul]
[li]The first type of financial advisor can’t predict the stock market[/li][li]The second doesn’t know that they can’t predict the stock market[/li][li]Both types will make money from your investments whether you do or not.[/li][/ul]
Self-directed, low cost Vanguard type index funds are the best bet going.
Other good points to consider are :
[ul]
[li]Even if you can invest like Warren Buffett, if you can’t save, you’ll die poor.[/li][li]Finance isn’t rocket science, but you’d better understand it clearly.[/li][li]Those who ignore financial history are condemned to repeat it.[/li][li]We have met the enemy and he is us.[/li][li]The financial services industry wants to make you poor and stupid.[/li][/ul]
Its been about 8 months since I returned to the USA. Ive been in Washington the whole time, though I have travelled around the USA. Right now Im supporting myself with a little work on ebay and my girlfriend paying most the bills. I worked two months at a jimmy johns as a delivery boy. I noticed the owner of the franchise showed up at work only once a week and seemed like a pretty pissed off kind of guy.
I see myself as a very laid back person, I dont stress about becoming a extremely rich and find satisfaction in the little things. I have lived around plenty of wealthy people to learn that money doesn’t buy happiness and the glamourous materialistic lifestyle really isnt for me. . I just want to have a bit over middle class life with a couple of kids and the freedom from a 40 hour a week job.
It does not include buying a house.
I am partnered with someone I plan to spend my life with. It has always been difficult for me to make goals and concentrate on one thing for long periods of time. I studied Finance because my father forced it on me and hated it. Before that I was into tech and computers. Now I feel like going back to school again would be to time consuming as I want to have children sometime in the next couple years
Ive had plenty of experience with the stock market and investing money into stocks and its not something Im interested in.
Most franchise owners work their butts off while they start their business. If they don’t, they are often robbed blind by someone - their accountant, the person they have managing the store, the highschoolers making free sandwiches for all their friends. They need to really understand the business so they can see inventory disappearing or sales being pocketed without being rung through and to develop a relationship with their employees so that they can trust them.
$300k at your age is a nice nest egg. Eggs need to be sat on, kept warm and safe, until they hatch. I’d also recommend to start looking at FIRE type web sites and bogleheads - in some ways you seem an ideal candidate for that lifestyle - you partner does need to be onboard, however.
A papa john’s pizza business cost about 250K. They earn about 17% profit for the owners.
You can do the math as the average one brings in 20-35K per week gross.
The S&P 500 represents about 75% of the total capitalization in US stocks, so it’s already pretty diverse. Any Index 500 fund is going to be virtually identical; I recommend (and use) Vanguard because they have very low expense ratios.
Bonds are a good idea in some cases, but for someone young that doesn’t need a fixed income, stocks will do better and are arguably safer in the long run.
It’s not a terrible idea to diversify into foreign markets, but… it’s really not necessary. There is no industry that is not well represented among US stocks and any event that affects the world will also affect the US.
Put it in the bank, invest the max amount each year into a Roth IRA. Invest that into the stock market, conservatively. By the time you retire (almost all of your 300K will be invested and grown), you will have more than enough to live comfortably.
Im not sure what a FIRE type website is. Kind of hard to google do to unclarity of what it is, can you elaborate a little more?
good one.
This sounds good financially but Im not sure Im a pizza kinda guy. Especially with the healthy food craziness thats been going on, this might go turn around on me real fast.
Thanks for all the contributions so far, its been interesting.
