The question has been asked so I decided I will give an educated answer and I figure I might as well post it here since I feel it can help many people. With all the New Year Resolutions up in the air, I was ask how to safely invest $50k. The first thing to take note of is that if the money you plan to invest is your only reserve then you shouldnt be investing or taking any risks with it. I am a firm believer in this because in reality smart business people borrow money because why should they risk losing the cash they have on hand if they can risk your borrowed money and still stay stand tall if there is no return on investment. After all, America does allow you to file for bankruptcy if all hell brakes lose. Now back to the main point. How to SAFELY invest 50k? Simple answer to this question is to invest only in what you are in control of and can manage yourself. The first step is to take some of that money and get educated. There are no short cuts here. Your education and what you want to learn is what you can be in control of. The second step is only invest in what you understand and manage independently. This goes back to the education. Let me set a simple example. Lets take a Barbershop. Ive seen two launches, one not so successful and one very successful. As I look at the businesses from the sidelines the key differences in the owners is knowledge and experience in barbershop business. The unsuccessful shops owner just collects the money and only hopes he is collecting all of it since the barbers he hires are technically running the business. The successful shops owner is doing more than collecting money. He opens and closes the shop, he is the master barber, he manages his strategic business plan and he controls the direction of his investments. The key thing he keeps investing for a higher return with full control. My basic point is do not invest your $50k if you are not overseeing the entire business. Keep in mind that I am only speaking of SAFE investments for the average person and not those individuals who are flooded with cash. For the last advise lets say you dont want to educate yourself on Finances and dont want anything to do with a business you operate from the bottom to the top. Keep your money in the bank! Not you average bank though. I guess I should bash on HarborOne and DCU for a second. A savings account with only .005 interest rate???? You have have to be kidding me. You must be crazy to keep your $50k in a regular savings account. What you should be doing is keeping your money in a FDIC High-Yields Saving Account. This is only one of many ways that the bank can keep your money safe while giving you a high interest rate. Let me give you another example. Lets look at American Express High-Yields Saving Account. The key thing to look at is that your money is not locked like in a Certificate of Deposit Account (CD) and there are no fees if you withdraw some or all of your money. You can access your money at anytime with no fees. So some simple math based on the American Express High-Yields Savings Account. You receive 0.85APY for your initial balance and ongoing balance. So lets take the $50k and build a plan. Lets say you plan on saving your money for 8 years at 0.85 APY. That amounts to $3503 in interest earnings in the course of 8 years. Lets go even more in depth. For a 20 year plan in which you contribute $600 monthly to this initial $50k startup balance. You would end up with $216,073.49 if the money is left untouched for 20 years in the High-Yields Savings Account. Now if that money was left in a HarborOne or DCU savings account you would have gained $194,000. Overall that would be a nearly $22k gain just based on interest. Yes, there are many ways of investing your money and these are just a few. The key thing is that money doesnt grow over night. Hopefully this helps answering some of the questions. No matter what anyone with a CPA tells you, your best investment will always be investing in yourself. Happy New Year!
Posted on: Fri, 02 Jan 2015 11:03:36 +0000
Trending Topics
Recently Viewed Topics
© 2015