# Just came into some money - Is buying a franchise right for me? What to do with 300k at 25yrs old? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [May 9, 2014, 10:57pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085 "2014-05-09T22:57:27Z")\ **Posts on this page:** 15\ **Page:** 3
**Author:** ![Maserschmidt](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/maserschmidt/32/18829_2.png) [@Maserschmidt](https://boards.straightdope.com/u/Maserschmidt)\ **Post date:** [May 11, 2014, 4:14am UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/41 "2014-05-11T04:14:17Z")
> [@AncientHumanoid](#): > > Kick boxing. Sport of the future. > [@JacobSwan](#): > > Just one word: plastics. How’s about investing in condominiums? It’s safe. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [May 11, 2014, 1:50pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/42 "2014-05-11T13:50:17Z")
> [@leo3654](#): > > Im going to consider investing it into something safe. 7% a year as mentioned above sounds good, what kind of risk would I be taking with this kind of investment? Where can I start researching more about investments like this? Other then talking to a financial adviser right off the bat. Just remember that 7% a year is an reasonable average _over the long term_ - and both safe and 7% is difficult. Also, my advice [earlier](http://boards.straightdope.com/sdmb/showpost.php?p=17364262&postcount=12) in the thread applies. Studying the Boglehead [Wiki](http://www.bogleheads.org/wiki/Main_Page) is a good start as are the books of [William Bernstein](http://www.efficientfrontier.com). I strongly recommend that you do some research with these before deciding whether to commit to an advisor. Earlier, I mentioned a small account an employer set up for me in my 20s. It was a very conservative, low risk plan thar started out as 50% bond fund and 50% stock fund - it was locked in a plan that I ignored since it was so small. As I said, untouched it grew from $2000 to $60,000 in 34 years. It is now 20% bond and 80% stock. If I had decided on minimal risk (100% bond) it would be much smaller than $60000 now. Over the years it had losses from the previous year, but it always bounced back in the following years. This points out the wisdom (accidental in my case) of picking a plan and sticking with it and avoiding short-term panic when the market drops. ---
**Author:** ![don\_t\_ask](https://avatars.discourse-cdn.com/v4/letter/d/e68b1a/32.png) [@don\_t\_ask](https://boards.straightdope.com/u/don_t_ask)\ **Post date:** [May 11, 2014, 2:00pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/43 "2014-05-11T14:00:08Z")
If I was advising 25 year old me what to do with that money I would suggest putting it somewhere safe for now. Invest whatever interest it earns in the most useful investment you already have - yourself. Spend it all on experiences and learning. The capital will still be there and along the way you’ll work out or stumble on the right way to use it. ---
**Author:** ![Tread](https://avatars.discourse-cdn.com/v4/letter/t/53a042/32.png) [@Tread](https://boards.straightdope.com/u/Tread)\ **Post date:** [May 11, 2014, 2:04pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/44 "2014-05-11T14:04:41Z")
> [@AncientHumanoid](#): > > Kick boxing. Sport of the future. I guess you probably think he shouldn’t sell anything… or buy anything… or process anything… ---
**Author:** ![Clothahump](https://avatars.discourse-cdn.com/v4/letter/c/51bf81/32.png) [@Clothahump](https://boards.straightdope.com/u/Clothahump)\ **Post date:** [May 11, 2014, 2:15pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/45 "2014-05-11T14:15:54Z")
> [@leo3654](#): > > Im going to consider investing it into something safe. 7% a year as mentioned above sounds good, what kind of risk would I be taking with this kind of investment? Where can I start researching more about investments like this? Other then talking to a financial adviser right off the bat. I suggest that you talk to the financial adviser(s) right off the bat. Pick a couple of solid ones (I personally use Fidelity), make an appointment, and get them to educate you on the ins and outs of investing in general and your needs in particular. Go with the one that you feel does the best job. Or split it between the top 2 or 3 for diversity. A 7% return would be great. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [May 11, 2014, 2:58pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/46 "2014-05-11T14:58:28Z")
For us 7% return was on the lower end of the risk profile. We had several options to choose from - as you would guess the higher risk options offer a greater chance of higher returns, but also a greater chance of higher losses. But the option with a projected 7% return offered a good return with only low to moderate risk. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [May 11, 2014, 3:07pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/47 "2014-05-11T15:07:48Z")
And keep in mind, with the amount of money you have, you have some different options available to you AFAIK. You have more options than someone with 20-30K but less options than someone with someone with 1 million+. Some places only deal with high net worth individuals; for example, we wanted to invest where my dad invests, but we did not have the required minimum, but he referred us to somewhere that worked with less wealthy individuals. I would also emphasize doing your due diligence no matter where you invest. ---
**Author:** ![Johnny\_L.A](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnny_l.a/32/1084_2.png) [@Johnny\_L.A](https://boards.straightdope.com/u/Johnny_L.A)\ **Post date:** [May 11, 2014, 3:32pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/48 "2014-05-11T15:32:46Z")
> [@leo3654](#): > > This is actually where Im currently living. Of course, I was looking out for my own interests. 😉 I miss Del Taco’s Macho Meat Burrito, their fries, and their burgers; and I miss Wienerschnitzel’s Chilli Cheese Dogs. Either of those might do well here since it’s a college town and I’ve run into many Californians; but the other investments mentioned in this thread are much better ideas. B’ham is a nice town though, eh? ---
**Author:** ![enipla](https://avatars.discourse-cdn.com/v4/letter/e/54ee81/32.png) [@enipla](https://boards.straightdope.com/u/enipla)\ **Post date:** [May 11, 2014, 3:34pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/49 "2014-05-11T15:34:17Z")
You are in an enviable position. For a 53 year old man, 300 k is not very much. For a 25 year old, it can make the future much brighter. I don’t know you from Adam, but as others have suggested, invest. You can afford to be aggressive with the money (at 25yo), and retire early. A franchise? Hard to say, but know that being the boss/owner and hiring and firing is a very tough job. I have known a few people that have owned restaurants, and it’s a FULL FULL time job. 60 hours a week at least. Also, as others have suggested, don’t lock it all up. Having 30k available for emergencies really helps you sleep at night. And, treat yourself at least a little bit. You just came into some bucks. Take that vacation that you always wanted. Then sock the money away. Smile when you retire at 50 or 60. Depending on how things go of course, and what you earn in the next 25 years. Figure out your goals (hard to do sometimes, I know) and I would get a financial adviser. But just a one time deal. Pay the few hundred to get ideas. Then get another one. And pay a one time fee again. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [May 11, 2014, 4:10pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/50 "2014-05-11T16:10:15Z")
If you go the route of seeking advisor, try to find an independent, one time fee advisor, with zero interest in selling you something or getting your deposit, as recommended by **enipla**. Avoid those that work for brokerages or mutual fund companies - too often they are just salesmen on commission (experience speaking here). The power of compound interest is a powerful force on your side but never forget that the power of compound advisor and mutual fund fees can steal much of your money. This [article](http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/john-bogle-the-train-wreck-awaiting-american-retirement/) discusses the impact of fees in an easy to understand way. If you are interested in a very conservative, low cost place to park your money while you do your research, open an account with Vanguard and split it between Admiral shares of their Wellington and Wellesley funds. Low fees, among the oldest funds in existence and staples of trust funds for many families. The little old ladies of the world can’t be too wrong 😃 ---
**Author:** ![AncientHumanoid](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ancienthumanoid/32/278_2.png) [@AncientHumanoid](https://boards.straightdope.com/u/AncientHumanoid)\ **Post date:** [May 11, 2014, 5:09pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/51 "2014-05-11T17:09:09Z")
> [@Maserschmidt](#): > > How’s about investing in condominiums? It’s safe. I don’t use them myself. > [@Tread](#): > > I guess you probably think he shouldn’t sell anything.. or buy anything… or process anything… I don’t want to buy or sell anything processed, I don’t want to process anything bought or sold… ---
**Author:** ![chappachula](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@chappachula](https://boards.straightdope.com/u/chappachula)\ **Post date:** [May 11, 2014, 5:24pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/52 "2014-05-11T17:24:41Z")
> [@leo3654](#): > > I want to invest it into something that I can live off… > just want to have a bit over middle class life and the freedom from a 40 hour a week job. > …I see myself as a very laid back person… Dude, I hate to tell you this… but $300 000 isn’t much money. It’s nice , but 300k is nowhere near enough to live off permanently. So that means you are still going to have to work full time for a while–and possibly work a lot more than 40 hours a week. Sure, somebody gave you 300k, and that’s wonderful…But there are lots of other people out there who are perfectly willing to give you the same amount—all you have to do is show up at their office every day for about 6 years (assuming you are a university graduate.) So you are 6 years ahead of the game, and that’s a big advantage. But it is not a ticket to the easy life. You say you have some experience at a guest house, and you were a delivery boy. Now you want to be a franchiser. You’ve got a good education, you’ve got life experience, etc…but going from delivery boy to boss/owner is huge step. You will have to work _hard_, and there is a definite risk that you could lose _everything_. Step back from the fantasies of $$$, and pretend that you have nothing. Pretend that you are going to a bank and asking to meet with a loan officer. Imagine that you are sitting at his desk, and asking for a loan of 300k to start your own business. Imagine how many questions he will ask you: what is your business plan, do you have a manager you can trust with all your money in the cash register every day? how much will city taxes cost?do you need permits from the dept of public health, and how much do they cost? How many employess do you need, and how much will they cost ? And what about insurance for them? Now try to estimate the number of customers who will walk in the door every day and pay you. What if you are wrong, and only half that number show up? Suppose you lose $2000 a month, and then there’s a burst pipe that costs thousands of dollars in damages, and ruins your equipment? How are you going to supervise all this? Are you willing to be there from opening till closing every day? Etc,etc,etc With your money, you have a great advantage–but you still face a lot of hard work. Being a “very laid back person” who works less than 40 hours and retires early may well be possible—about 15 years from now. In the meantime, you are young and have lots of energy…use it wisely. Good Luck! And don’t forget that, --even though this is a thread about money–: Of all the goals you mentioned, the most important one is raising a couple of kids. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [May 11, 2014, 5:51pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/53 "2014-05-11T17:51:43Z")
Always be skeptical of investment advise that starts with the word “Dude” IMHO. ---
**Author:** ![D\_Odds](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/d_odds/32/2882_2.png) [@D\_Odds](https://boards.straightdope.com/u/D_Odds)\ **Post date:** [May 11, 2014, 6:51pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/54 "2014-05-11T18:51:20Z")
> [@Dangerosa](#): > > If you don’t like the idea of sitting on it - and are handy (can do home repairs including plumbing and electrical) and you are staying in one place for the foreseeable future, depending on your area, buying a home to rent out can be a decent investment. But its a lot of work, your tenants can trash your place leaving you with thousands of dollars in repairs, you may have issues collecting rent…it isn’t risk free and will involve work. But, if you do your research, buy for a decent sort of tenant, and can handle your own repairs - it isn’t a bad way to turn a few hundred thousand into a cash generating machine. Or, with $300k, you could buy 3-5 decent rental homes and have them professionally managed. Set aside 10% of total rents per month for repairs and turnover expenses. And always insure, insure, insure! After 5 houses, there are portfolio lenders who will let you leverage the equity in those houses so you could get even more houses. I own rental properties out of my state. I only manage the property manager. I don’t do any repairs. I don’t collect any rent (from tenants). I don’t advertise to fill the vacancies. I don’t interview the applicants. And most importantly, I don’t get any phone calls. ---
**Author:** ![jasg](https://avatars.discourse-cdn.com/v4/letter/j/f0a364/32.png) [@jasg](https://boards.straightdope.com/u/jasg)\ **Post date:** [May 11, 2014, 9:12pm UTC](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085/55 "2014-05-11T21:12:57Z")
leo3654 - have you looked at related reddits? Not that the info there is necessarily any better than the rest of the Internet babble, but it might raise new questions you could investigate and help with your self-education. I’d look at the Resources & links and Related subreddits at these links: > **[r/personalfinance](https://www.reddit.com/r/personalfinance/)** > > r/personalfinance: Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF … > **[r/Entrepreneur](https://www.reddit.com/r/entrepreneur)** > > r/Entrepreneur: A community of individuals who seek to solve problems, network professionally, collaborate on projects, and make the world a better … [Previous page](https://boards.straightdope.com/t/just-came-into-some-money-is-buying-a-franchise-right-for-me-what-to-do-with-300k-at-25yrs-old/688085.md?page=2)