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$90,000 - How To Invest?
- Thread starter Marion Cobretti
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Not everyone wants to own their own business, not too mention also work a full time gig at the same time.
What sort of small business are you trying to start?
bangbang i'm a timpani
Banned
holy shit please do not buy AAPL on slowing iphone volumes talk to somebody who knows what they're doing. new version releases and the expected sales are already figured into the price of the stock, its absolutely not a smart investment right now. also, please do not tell your girlfriend how to spend this money without talking to a financial advisor.
DoktorEvil
Banned
A CD would be best. It would force OP and GF to do research and talk to people before making a foolish decision.
We have no idea what are her skills or what kind of business acumen she has. Suggesting a small business off the bat is foolish.
Magical Sound Shower
Banned
How is your business doing?
ReturnOfTheRAT
Member
Are you planning on marrying her?
backflip10019
Member
Another tip: Don't invest more in stocks than you're willing to lose entirely.
Marion Cobretti
Member
The trust is pretty shady. Right before her grandma passed away, they changed it so that they would get a much larger percentage and also have an iron grip on the money.
That's why she wants pull out the money as soon as she's able to.
Any suggestions for how to deal with a trust that has too much power?
ThatGuyAgain
Member
Buy pork bellies... there is word on the street that there may be a shortage coming.
Dude - no offense, but these are big questions you're asking here. If you want real, significant life advice you should contact a professional.
DoktorEvil
Banned
You tell the guy...
LMAO
Your GF needs a lawyer, not GAF.
I don't think she would appreciate you divulging all of this information with a public forum as well.
bangbang i'm a timpani
Banned
also please do not invest in a CD. CDs are currently giving lower rates on return that inflation.
put a ton of money in a savings account and just sit on it b/c shit happens.
jesus just dont listen to the internet ever
put a ton of money in a savings account and just sit on it b/c shit happens.
jesus just dont listen to the internet ever
Escape Goat
Member
He is now.
Prototype Viktor
Member
Roth IRA's for everyone!!
This is actually shit advice.
Just get an index fund if you want to be in stocks, or your country's bonds if you don't.
You, and your hired help if any, are not going to beat the market.
And if you consider handling fees, practically no 'finance manager' and shit has EVER beat the market.
Starting a business because you have a good idea and a good business plan can be a good (though incredibly risky) idea. Starting a business because you have $300k and want to grow it is not.Also, if the business fails then its quite possible that the owner didn't learn the skills you listed.
Taking risks can have great results, but most people that try to start a business fail, and almost none of them reach the levels of Gates and Zuckerburg. The OP's girlfriend is (presumably) young and sitting on 300k. If she plays it right she can have a much more comfortable life than she (or most of us) would otherwise have.
First, determine what she wants from the money. An eventual downpayment on a house? Money for education? Retirement? All of the above?
With that in mind, meet with a fee-based investment advisor. Ideally, a fee-only advisor should be able to provide you objective advice without any obligation to sell you on any particular set of stocks. The same can not be said for commission-based advisors.
With that in mind, meet with a fee-based investment advisor. Ideally, a fee-only advisor should be able to provide you objective advice without any obligation to sell you on any particular set of stocks. The same can not be said for commission-based advisors.
Not sure why anyone thinks this woman wants to even start a business. Also, you can learn those things on your own without the risk of losing any money.
I think it's odd to suggest it when there's been no hint of her wanting to start one. It's not just money that you need but the actual drive to run it
Edit: yeah this is probably better left to you finding a professional to help
bennywhatever
Member
Is that to much money to put into a CD? Because that'd be a good option - force her to sit on it a year to figure out what to do with it.
The common characteristic in all the people you listed is that they started with no capital and did low-margin stuff, often for free at first, until they were already making money, then started to look for investment to get big.
None of them started out with a big lump sum and tried to jump into a functioning and profitable business with no business or professional experience.
entremet
Member
Oh I agree with you. I'm in the process of starting a side business now. But I'm still working on my full time job.
I don't think anyone should quit their job unless they have they have clients and six month of operating expenses in the bank.
But I generally agree with you. I just see small businesses always seen as a poor option unilaterally here.
The funny thing is this site is a small business itself!
Good points. I don't disagree with them.
I personally don't think the OP's girl should do it. I recommended the opposite!
It was more a critique of the critique of small businesses.
Don't touch it for at least 6 months. Both of you need to learn about investing, speak with a financial planner/manager that you truly trust (don't be afraid to shop around for them. It's HER money). The manager should be asking her questions to better ascertain her goals with the money before jumping into anything. Don't accept the first person just because they have CFP next to his or her name.
Once you do that and are well educated, see how comfortable she feels about investing a portion of it. If you are happy with the performance you get from the funds/securities you select, she can throw more at whatever she likes depending on what she is investing it for.
The most important part of making money is either luck or hard work. The most important part of keeping money is financial education.
Once you do that and are well educated, see how comfortable she feels about investing a portion of it. If you are happy with the performance you get from the funds/securities you select, she can throw more at whatever she likes depending on what she is investing it for.
The most important part of making money is either luck or hard work. The most important part of keeping money is financial education.
Depends where you get financial advice from to be honest. I've interned at some FA firms and the most their average advisor does is look at how far you are from established diversification/investment goals, look at the stars on a report, and recommend that to you. They are helpful for setting up plans using the money, but Excel can do the same thing.
I'd recommend (Finance double major) waiting a bit like another GAF member said. Take the money (I'm not 100% sure on tax, but you'll probably be taxed an estate tax) and put it into CD's (Certificate of Deposit). This in general is riskless at established banks and assures a low return for the period of the CD. They're short-term, so if you take the money out early you will incur some sizeable penalties. However, this gives you time (I believe you can do 6mos, but all the links I found are about a year (linked below) to get up to snuff on investing. If possible, I'd recommend paying for Morningstar and using it to evaluated Mutual Fund's, Index Funds, ETF's. In general, unless you're a professional it'll be hard to actively manage your portfolio and outperform the market, which is the goal. You can use Morningstar's screener to eliminate funds with minimum investments, one's which pay high fees, etc. Super helpful. Buying funds also helps you diversify.
edit: forgot link. http://www.mybanktracker.com/cd-rates-funnel?gclid=CMCwj8ClmsgCFRAvaQodf_0J2w
IF you choose to go the stock route after learning a bit more, the key is to diversify and invest for the long-term, not trade (it sounds like you're going for this already). At about 20 stocks you're pretty well diversified (as long as they're not correlated, which you can do in Excel pretty easily). Again, Morningstar has pretty good stock analysis - Yahoo Finance does too.
Good luck! I'm biased against FA's from my time there, but a lot of people have success with them. Again, just remember to diversify, don't follow trends (if the market's plummeting, don't panic sell - think of it as stocks going on sale), and don't think about it too much!
I'd recommend (Finance double major) waiting a bit like another GAF member said. Take the money (I'm not 100% sure on tax, but you'll probably be taxed an estate tax) and put it into CD's (Certificate of Deposit). This in general is riskless at established banks and assures a low return for the period of the CD. They're short-term, so if you take the money out early you will incur some sizeable penalties. However, this gives you time (I believe you can do 6mos, but all the links I found are about a year (linked below) to get up to snuff on investing. If possible, I'd recommend paying for Morningstar and using it to evaluated Mutual Fund's, Index Funds, ETF's. In general, unless you're a professional it'll be hard to actively manage your portfolio and outperform the market, which is the goal. You can use Morningstar's screener to eliminate funds with minimum investments, one's which pay high fees, etc. Super helpful. Buying funds also helps you diversify.
edit: forgot link. http://www.mybanktracker.com/cd-rates-funnel?gclid=CMCwj8ClmsgCFRAvaQodf_0J2w
IF you choose to go the stock route after learning a bit more, the key is to diversify and invest for the long-term, not trade (it sounds like you're going for this already). At about 20 stocks you're pretty well diversified (as long as they're not correlated, which you can do in Excel pretty easily). Again, Morningstar has pretty good stock analysis - Yahoo Finance does too.
Good luck! I'm biased against FA's from my time there, but a lot of people have success with them. Again, just remember to diversify, don't follow trends (if the market's plummeting, don't panic sell - think of it as stocks going on sale), and don't think about it too much!
DoktorEvil
Banned
That isn't the reason why it's being suggested. It's to prevent her or her OP BF from making any foolish decisions like transferring 90k over from savings to checking and buying all stock in AAPL and Oculus.
vicissitudes
Banned
50% - down payment on house/condo/property to rent out, make sure estimated monthly rent >> monthly mortgage + hoa + estate tax + possible repairs
25% - index funds, preferably a mix of US and international
15% - bonds
10% - CDs / banks, etc.
Less optimistic about stocks recently as we may be entering a bear market.
25% - index funds, preferably a mix of US and international
15% - bonds
10% - CDs / banks, etc.
Less optimistic about stocks recently as we may be entering a bear market.
Start small. Open a brokerage account at a place like Vanguard or Schwab to buy low-cost index mutual funds or ETFs. The market is really volatile right now, but starting small and using dollar cost averaging (invest a fixed amount per month) would be a good way to get one's feet wet and learn along the way while increasing diversification and exposure to more specific funds. Stay away from picking stocks and blowing money on commissions. You can get Vanguard, Schwab, and Fidelity ETFs w/o commissions using accounts w/ each. Fidelity also offers many iShares ETFs commission-free.
Interest rates may increase by the end of this year, which would make short-term CDs a little more attractive. Even putting that money in a high yield savings with Ally would be good for now while you work on figuring out the next steps.
Interest rates may increase by the end of this year, which would make short-term CDs a little more attractive. Even putting that money in a high yield savings with Ally would be good for now while you work on figuring out the next steps.
Walter White Walker
Member
If she must go with a financial adviser make sure it's one that is held to a Fiduciary Standard and not a Suitability Standard.
http://www.401khelpcenter.com/401k/chamberlain_401k_suitability_fiduciary.html#.Vgl_nPlVhBc
http://www.401khelpcenter.com/401k/chamberlain_401k_suitability_fiduciary.html#.Vgl_nPlVhBc
Sounds like you've had terrible experiences.
Considering OP wants to buy tech stocks based on personal interests, I don't think he knows how to just buy a random index fund on their own.
Marion Cobretti
Member
Some of you guys are nuts. You guys are acting as if I'm coming to GAF for the end all be all advice and that I'm gonna do whatever GAF tells me.
I'm just trying to have a discussion here, not set shit in stone based on what I read in this thread.
And I had my girlfriend sign off on me making this thread, not to mention that I've hardly given out any of her personal. This is all hypothetical as far as this thread is concerned.
If it's an irrevocable trust, and it probably is, then all the assets are no longer considered to be part of the estate and thereby avoid any potential estate taxes.
diablos991
Can’t stump the diablos
If your first ideas when the word investing come up are facebook and apple then you are going to make terrible decisions with investing that money.
Find what her goal for the money is and speak to a financial manager about the best way to achieve that goal.
Find what her goal for the money is and speak to a financial manager about the best way to achieve that goal.
Who is "they" in this scenario? Who changed the trust?
If you really think you can make a case that the trust abused their authority when dealing with her grandmother, that's a lawsuit. But it's a terrible one that will be painful and expensive for everybody, so, like, be wary of any lawyer that says it will be super easy to sue them. It almost certainly won't be.
The core idea once you get the money remains the same. Find a financial investor and invest it for the long-term. Consider a Roth IRA. The financial advisor will be better able to handle things and if you really really want to buy Apple they will be able to allocate some of the cash to Apple without compromising the portfolio too much.
CharlieDigital
Banned
There is really nothing wrong with investing in AAPL and FB so long as you're fine with putting that money aside for a while. Both of these companies are going to continue to do well in the next decade, especially as more people get connected to the Internet and smartphones continue to become the first computers that many people in developing nations purchase.
TBH, even if there is a large market correction, as long as you can sit it out and hold onto those assets, you will be OK in the long term. Stocks like Microsoft, Intel, Amazon, GE - they will continue to do well for decades to come so long as you can always wait it out.
Walter White Walker
Member
That's not the goal for an index investor. Your goal is to match the market returns, because trying to beat the market is a fool's errand.
DoktorEvil
Banned
Its really poor judgment to suggest putting all of your funds into 1-2 stocks. Stocks are highly volatile and are highly susceptible to wild fluctuations.
Diversification is fundamental.
Fair enough. She should still sit on it for a year and figure out what she would like to do if money wasn't an issue.
CharlieDigital
Banned
I don't think anyone is saying "only buy those stocks", but rather in my opinion, there is nothing wrong with investing in those stocks.
Even if OP's girlfriend decides to put $45k in FB and $45k in AAPL, my guess is that if she can hold on to it long enough and weather any financial turbulence, she'll be fine. It's a different story if she needs that money or wants to use it to say buy a house or start a business.
TheRagnCajun
Member
It sounds like you are asking for a few sexy stock picks to catapult you ahead of the pack. If you put all your money in speculative growth/tech sector companies you will have a very volatile portfolio and probably loose your money.
Aim for a balanced diversified portolio. Seek diversification in terms of region (i.e. American, European, Emerging markets), diversification in terms of industry (i.e. Healthcare, Telecom, Oil and Gas, Automotive, Finance, Food etc.) and diversification in terms of asset class (Fixed Income and Growth).
You can find a financial advisor to help you with this strategy.
Aim for a balanced diversified portolio. Seek diversification in terms of region (i.e. American, European, Emerging markets), diversification in terms of industry (i.e. Healthcare, Telecom, Oil and Gas, Automotive, Finance, Food etc.) and diversification in terms of asset class (Fixed Income and Growth).
You can find a financial advisor to help you with this strategy.
And_Gignac
Member
Yeah, is strange. People want to make lots of money but without taking an active role in making so and letting an intangible system like the stock market do all the work for them.
Just go with a 3 fund portfolio ( https://www.bogleheads.org/wiki/Three-fund_portfolio ). If played right (e.g. not throwing it all at stocks), your girlfriend's life just got much easier. Seriously, she just got a ridiculous head start on retirement. She can basically pursue any career and be fine money wise.
Marion Cobretti
Member
Like I said, she likes her job, and makes a comfortable living. She just wants to see the money grow and is in no rush to use it.
I really appreciate all the advice and suggestions that have been given so far. Obviously it's very easy to get in over your head if you have no clue about this stuff.
Also, the plan is not to buy apple or Facebook stock. I was just throwing out some of my ideas as I think they'd be good long term investments.
ClosingADoor
Member
True, but it doesn't hurt to at least get someone to inform you about the different options you have and go from there.
If she wants to invest, she can do it herself by picking certain funds or stocks, depending on how much risk she is willing to take.
CadetMahoney
Member
/thread
DoktorEvil
Banned
Even the big name blue chip stocks can be susceptible to volatility. General advice from people who regularly watch the markets is to spend money that you would be comfortable losing in full in the stock market. 10K as opposed to 90K.
Stocks are highly liquid. Liquidity will not be an issue.
Does she have a retirement fund? Does she want to retire from working in her 50s instead of her 60s? Does she have any charities or business ideas she'd like to pursue? Does she wish to be a homeowner or a real estate investor?
Figure out what her goals are and help support her goals.
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