I getting a settlement of about 50,000 dollars, anyone have any investment ideas? That you're thinking of investment rather than consumption is a really good sign. Your investments are a reflection of you: what you value, understand, and expect. So, if you expect to get paid for what you create, then you're not going to be driven by the greed and fear mania of many investors People with a strong conviction of their own worth and their desire to create value in life often have more steady and profitable investments.
That's the kind of people Berkshire Hathaway collects. You might almost have enough to buy a share of their stock (not their regular stock, but their value priced stuff for smaller investors). I recommend that you read their reports, even if that's not the direction you'll go with your investment. Warren Buffet will teach you more about stocks, the economy, his investment style, and a lot of other things than you could get from a dozen college courses in finance.
There are a lot of other investment strategies for stock. You might just want to grab a Vanguard account, which is a balanced portfolio of the whole market. With that, you're betting that things will generally go up, and you're not interested in whether it's going up faster than your neighbor's portfolio. It's a conservative approach to things.
On the opposite side of the spectrum is options investment, where you are really risking everything on short-term swings on stock. The methodology used to do that is taught in the Investor's Business Daily.
Outside of stock, there's real estate. You can do A LOT with real estate because of the leverage you can use. The math on it is quite simple:
Net Operating Income (NOI) from the property = rents - direct expenses and a vacancy estimate (NOT INCLUDING debt service)
Purchase Price (PP) = the purchase price plus any closing costs
Cap Rate = NOI / PP
If your Cap Rate is greater than your financing rate, then you've got profit on your hands. How much?
Margin = Cap Rate - Financing Rate
Multiplier = 1 / Down Payment %
Cash on Cash Return = Margin * Multiplier
That'll get you started if you want to look at some long-term, conservative real estate investments. There are a lot of other real estate strategies you might want to consider. You'll find a generic version of most of these in the book I recommended below (The Real Estate Game). That book's the best of the dozen I've read in real estate investment.
There are some other ways to invest your money. Unless I THOROUGHLY understand them, I find that fear and greed become my motivators, instead of value creation.
Best of luck! Eddie,
"A fool and his money are soon parted".....seek professional financial assistance. You could check with your bank. If you dont have a bank account...that's where you should start first. Get an account. I bonds It all depends on how much money you currently have, how old you are, what your current job is, your level of education.
If you already have another 50,000 saved up and have a steady well paying job you could afford to risk your money in funds, real estate.
If you are young you might consider using that money to further your education. Despite it being a cliche, education is the best investment you can make, especially if you have most of your "working years" ahead of you. 50,000 spent now on the right education could mean an extra 20,000-30,000 a year for the rest of your working life (not to mention more satisfying and rewarding work)
You could use that money to find a better job. Hire someone to search for a job, you can use that money to ease your relocation worries and buy that house that was just out of reach.
If you don't have any other savings; I would be very cautious about doing risky investments. Something like bonds, or even the vanguard fund could help; but I would seriously think about just leaving it in the bank for a rainy day, especially if your job is not steady.
Finally, you could put the money towards paying off your mortgage. I think that's a much more sound investment than equities. The stock markets are a whole lot more reasonable today than they were just a month ago.
Here is something to think about.
$10,000 in t-bill or 1 yr cds.
$5,000 in a good mutual fund that invests U S stocks such as GAM, a closed end fund but one having a good track record.
$5,000 in a good mutual fund that invests in Chinese companies such as TDF, another closed end fund.
$5,000 in a good mutual fund that invests in European companies.
$5,000 in a mutual fund that invests in companies in India such as IIF.
$5,000 in a mutual fund that invests in oil companies.
$5,000 in a mutual fund that invests in health care
$5,000 in a mutual fund that invests in technology companies.
$5,000 in a mutual fund that invests in Japanese companies.
You would be well diversified and invested in growth areas. You would have a 20% cash reserve for whatever might come up. With just a little bit of luck, in 5 years you should have doubled your assets. Start your own business!
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