luckyexwife
Pearl Clutcher
Posts: 3,066
Jun 25, 2014 21:21:08 GMT
|
Post by luckyexwife on May 11, 2021 15:30:52 GMT
If you had $20,000 to invest right now, where would you put it? The person does have a 6 month emergency fund in a savings account, and the only debt is a mortgage. They don't want it locked in an account that isn't accessible until retirement. Suggestions?
|
|
|
Post by ntsf on May 11, 2021 15:39:00 GMT
mutual funds.. heavy in tech buys.
|
|
|
Post by magellen on May 11, 2021 19:07:02 GMT
I would put it on the principle of my mortgage.
|
|
|
Post by kamper on May 11, 2021 19:10:15 GMT
There are so many factors that play into an answer. Even your caveat is of little help. Using Rule 72, you can get money out of retirement accounts (granted there are restrictions on the rate of withdrawal).
My instinct would be to pay down the mortgage.
I would ask my financial advisor.
|
|
|
Post by MichyM on May 11, 2021 19:11:16 GMT
From the sounds of it, this may be the first money this person has invested?
If it was me, I'd open an account with Schwab, Edward Jones, or another brokerage firm/investment manager and work with them to help me realize my (assuming long-term) goals with the money. Then as they earn more $$$ to invest, they can continue working with their advisor.
ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested.
|
|
kelly8875
Pearl Clutcher
Posts: 4,390
Location: Lost in my supplies...
Oct 26, 2014 17:02:56 GMT
|
Post by kelly8875 on May 11, 2021 19:15:29 GMT
If this is a new investment situation for this person, I would go to a firm like Merrill Lynch, Edward Jones, etc. I'd invest very conservative.
But, personally, I would pay a lump sum on the principal of my mortgage.
|
|
|
Post by GamGam on May 11, 2021 19:18:51 GMT
From the sounds of it, this may be the first money this person has invested? If it was me, I'd open an account with Schwab, Edward Jones, or another brokerage firm/investment manager and work with them to help me realize my (assuming long-term) goals with the money. Then as they earn more $$$ to invest, they can continue working with their advisor. ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested. I second this--strongly. As a person living in retirement, you need to begin as soon as possible to invest in the stock market so that your retirement years are NOT lived in need. And there's no substitute for a reliable brokerage firm and money manager. Put the funds there, and continue to add as much as you can whenever you can. You'll be glad you did.
|
|
|
Post by ~summer~ on May 11, 2021 19:20:18 GMT
I would put it in a fidelity healthcare index fund.
|
|
|
Post by MichyM on May 11, 2021 19:26:33 GMT
I'd invest very conservative. I disagree with this. If one works with a financial advisor/planner, you will work together to determine your risk tolerance. Also, age and employment staus and future earnings plays a HUGE part in what type of investments with different risks one wants to invest in. I am almost 60 and have been retired for 11 years. My money is invested on the conservative side because of my age, the fact that i don't plan on having any future earnings other than those from my investments, and employment status. My son is almost 31. His money is invested more agressively (not crazy aggressive, just moreso than me) because of his age, future potential earnings (he has time to make up any potential losses that investing more agressively might produce), and current employment status. Decisions about how to invest are so much more than an "I'd do this" scenario. $20k is no drop in the bucket!
|
|
tracylynn
Pearl Clutcher
Posts: 4,858
Jun 26, 2014 22:49:09 GMT
|
Post by tracylynn on May 11, 2021 19:30:49 GMT
I would definitely go to a company like Edward Jones and work with them. Yes, it costs a bit in fees, but will be well worth it.
As far as putting it towards mortgage, that's not a horrible idea, but investing would be a higher priority. UNLESS, they are in a newer mortgage that they are paying PMI on (if they had less than a 20% down payment). If that's the case, and this $20K would get them out from under PMI, I might would look at that option.
|
|
bethany102399
Pearl Clutcher
Posts: 3,486
Oct 11, 2014 3:17:29 GMT
|
Post by bethany102399 on May 11, 2021 19:35:38 GMT
If it was me, I'd open an account with Schwab, Edward Jones, or another brokerage firm/investment manager and work with them to help me realize my (assuming long-term) goals with the money. Then as they earn more $$$ to invest, they can continue working with their advisor. ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested. This is basically what we did when we received a small inheritance from my mom. Our savings account is comfortable, and we continue to add to it each check only because we've been to the bone before and we both have a set dollar amount we'd like to see it at. We have no other debt, but make more than the expected payment on our mortgage. We took a small portion of the inheritance and invested it at a higher risk, just because we felt like we could, but the bulk of the money is invested at a risk level we worked out with our financial advisor. When we inherited funds from DH's grandmother (who lived to be 102!) we promptly put them in the moderate investment account. The plan is to do the same for any unexpected monies that may come our way. (not that I'm thinking we'll win the lottery or anything but hey, I'm open to putting it out there)
|
|
bethany102399
Pearl Clutcher
Posts: 3,486
Oct 11, 2014 3:17:29 GMT
|
Post by bethany102399 on May 11, 2021 19:37:26 GMT
If one works with a financial advisor/planner, you will work together to determine your risk tolerance. I know our advisor had us go through a worksheet to determine our risk tolerance. It's also what I used to determine the tolerance of the small amount we invested at a higher risk. One of the many reasons financial planners are worth the expense.
|
|
ModChick
Drama Llama
True North Strong and Free
Posts: 5,057
Jun 26, 2014 23:57:06 GMT
|
Post by ModChick on May 11, 2021 20:13:13 GMT
If one works with a financial advisor/planner, you will work together to determine your risk tolerance. I know our advisor had us go through a worksheet to determine our risk tolerance. It's also what I used to determine the tolerance of the small amount we invested at a higher risk. One of the many reasons financial planners are worth the expense. Absolutely this. There are so many factors like age and such as other peas have posted. Definitely worth having an FA work up a plan depending on these factors and goals.
|
|
SweetieBsMom
Pearl Clutcher
Posts: 4,577
Jun 25, 2014 19:55:12 GMT
|
Post by SweetieBsMom on May 11, 2021 20:16:40 GMT
Index fund
|
|
|
Post by busy on May 11, 2021 20:28:04 GMT
*I* would put it in Bitcoin. I would *not* recommend that for anyone who doesn’t understand crypto, its upsides, and risks.
|
|
|
Post by katlaw on May 11, 2021 20:28:37 GMT
My DH says cryptocurrency
|
|
luckyexwife
Pearl Clutcher
Posts: 3,066
Jun 25, 2014 21:21:08 GMT
|
Post by luckyexwife on May 11, 2021 20:56:14 GMT
From the sounds of it, this may be the first money this person has invested? If it was me, I'd open an account with Schwab, Edward Jones, or another brokerage firm/investment manager and work with them to help me realize my (assuming long-term) goals with the money. Then as they earn more $$$ to invest, they can continue working with their advisor. ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested. This person does have some investments. 401k, Roth IRA, inherited IRA, and a mutual fund account. Their financial advisor retired, and they haven't met with a new one yet. Person is early 40's, has 200,000 currently in retirement funds. Mortgage has about 15 years left, but they have been paying more aggressively and should be paid off in 7 years.
|
|
|
Post by **GypsyGirl** on May 11, 2021 21:04:40 GMT
ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested. We could have paid off our mortgage a few years ago. Instead, we used that money to invest in the market and are much further ahead financially than if we had paid off the mortgage. We have a low interest rate and currently are making returns more than that rate. I agree with all those who say find an advisor and work with them to set your goals and map out a path to increase that amount of money.
|
|
kelly8875
Pearl Clutcher
Posts: 4,390
Location: Lost in my supplies...
Oct 26, 2014 17:02:56 GMT
|
Post by kelly8875 on May 11, 2021 21:24:08 GMT
From the sounds of it, this may be the first money this person has invested? If it was me, I'd open an account with Schwab, Edward Jones, or another brokerage firm/investment manager and work with them to help me realize my (assuming long-term) goals with the money. Then as they earn more $$$ to invest, they can continue working with their advisor. ETA: I personally would not use it to pay down my mortgage unless that would give me significant peace of mind. Mortage rates are so low, their money can actually work for them and earn more for them when well invested. This person does have some investments. 401k, Roth IRA, inherited IRA, and a mutual fund account. Their financial advisor retired, and they haven't met with a new one yet. Person is early 40's, has 200,000 currently in retirement funds. Mortgage has about 15 years left, but they have been paying more aggressively and should be paid off in 7 years. Well, with all of this info, I’d say to just add to the mutual funds they already have set up. Or, is there a home improvement project that could benefit from the money.
|
|