Need Investment advice, Help!

Joined
21 January 2004
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Location
New Brunswick, NJ
I recently sold an apartment I use to live in and after all was said and done, I received a check for $65k. I gave my parents $25k, and now Im left with $40k. I plan on blowing $10k on my new house and NSX. Landscaping, new garage door, NSX-R wing, Volk CE28N's, and Comptech Headers. Im pretty handy and will do most of the yard work myself. Heavy duty stuff I need done.


Anyways, what do I do with the $30k? I know its not alot but I dont want stocks. I dont need immediate access to the money as I still make six-figures and im still single.:biggrin:

Vanguard, Money Market, Regualr savings account, ??????

Help please, Ive asked my parents but they are clueless about this type of stuff.
 
First of all you need to determine a couple of things. Primarily your investment horizon and your tolerance for risk. Secondly, do you have any debt that you can the money to pay down. If you have credit cards that are charging you over 10% anually and you are close to being maxed out, using the cash to day them down is the same as earning a 10% return.

Have you funded your IRA yet for tax year 2005? If not you can contribute up to $4000 into an IRA. You can compare the differences between a Roth and tradition IRA here.

If you have no immediate use for the money and want a long term investment, nothing, I repeat nothing beats the S&P 500. One of the best ways to invest in the S&P is either by buying shares in Vanguard's S&P 500 index fund or buying depository receipts which trade like an individual stock with the symbol SPY.

You should also use the S&P 500 to fund your IRA. In any given 20 year period the S&P 500 was never shown a loss. In fact 97% of all mutual funds can't match its performance in the long run.

If you don't care about the money and want high risk with the potential for a very nice return, short the hell out of Google.
 
Depends on what/any loans you have. If you still owe on any cars, pay them off. If you're already maxing out 401k and stuff you might wanna put it on your house balance.
 
Hugh said:
First of all you need to determine a couple of things. Primarily your investment horizon and your tolerance for risk. Secondly, do you have any debt that you can the money to pay down. If you have credit cards that are charging you over 10% anually and you are close to being maxed out, using the cash to day them down is the same as earning a 10% return.

Have you funded your IRA yet for tax year 2005? If not you can contribute up to $4000 into an IRA. You can compare the differences between a Roth and tradition IRA here.

If you have no immediate use for the money and want a long term investment, nothing, I repeat nothing beats the S&P 500. One of the best ways to invest in the S&P is either by buying shares in Vanguard's S&P 500 index fund or buying depository receipts which trade like an individual stock with the symbol SPY.

You should also use the S&P 500 to fund your IRA. In any given 20 year period the S&P 500 was never shown a loss. In fact 97% of all mutual funds can't match its performance in the long run.

If you don't care about the money and want high risk with the potential for a very nice return, short the hell out of Google.

No stocks, I have some I play around with now but I dont want any risk at all. I already max out my 401k and my company matches 10%. I paid off my CC's and NSX and dont forsee needing the money but you never know.

Whats up with a money market account? I can write checks on it if I have too, correct?
 
Aero said:
Depends on what/any loans you have. If you still owe on any cars, pay them off. If you're already maxing out 401k and stuff you might wanna put it on your house balance.

I already max out my 401k and my NSX is all mine:biggrin: I dont want to pay down my balance. I bought a foreclosure for $330k and it appraised for $470k before I started the renovations so..... I could always take equity out if I needed too.
 
Do NOT put it on your house balance. What are you paying in interest on your house? Probably about 6%? Conservative investing ought to get you better than that, even discounting tax benefits.

If you don't have the time or background to manage individual stocks (at least 5 hours a week + some experience IMO), then go for mutual funds or index funds. If you know nothing about the market, my vote would be an S&P 500 index fund while you learn more about what to do with your money.

Start exposing yourself to financial information and it will get easier. WSJ, smart money, and a couple good books will get you off and running in the right direction. From there, you can start to figure out how aggressive you want to be with your investing and start re-allocating your money according to what you have learned.
 
Are you utilizing the exclusion of living in your previous home ( used and lived in for 2 of the previous 5 years)? Please check with a tax advisor regarding this.

Otherwise you could have tax issues. You gave your parents $25k. Without incurring gift tax you can give them $12K each but please check with a tax advisor regarding this. You could have incurred gift tax

If you are earning 6 figures, my advice to you is to max out your 401k, contribute to probably a non deductible IRA, at least it will grow tax deferred. Use any additonal funds to achieve this. If you are not already doing this use your salary to fix up your NSX If the car is already paid for, please wait until you can pay this out of your salary rather than taking the cash from the sale of your home. If it is not already paid for reduce your load

Regarding stocks or cash or whatever investment vehicle. Go to a brokerage firm where the financial consultants are not commisioned. Ask them for a retirement planner or go on line to their web site and put in the numbers yourself. Regarding asset allocation, check out a no load, no transaction fee mutual fund list and put your assets to work. ( If you only have $30K to invest, you're out of luck.} In other words, you do not have to just pick stocks or a money market. Speak to a Financial Advisor and ask for their help. Ask them to do a complimentary portfolio analysis, including your current 401k and ask them for help in selecting a balance for your additional funds that suit your time horizon, risk tolerance, goals and objectives

Hope this helps and congratulations on your salary and wish you succesful investing.

Please understand this does not obligate me to any future or current financial advice, this advice comes from a friend of NSX who suggests you speak to a Financial Professional regarding this advice as it may be incorrect and buyer Beware!
 
How about currencies? There are a few good reasons why, fundamentally at least, the dollar should continue to decline against other currencies in the future. With this in mind, you can invest in foreign currency CDs that allow you to make a guaranteed return on the money, and also benefit (or lose) from movements in currency rates. I have one making just under 6% and a 2nd making just over 8% APY. They are 3-month CDs that automatically reinvest until I decide to cash out at the next maturation. Just another option. :)
 
I appreciate all the advice, anyone know about Money Market accounts?
 
You could deposit the money into a CD that allows you to borrow against it. A bank here pay 6.89% on the deposit and then allows you to borrow on the deposit and only charges 1% intrest on the loan.
 
The Kid said:
I appreciate all the advice, anyone know about Money Market accounts?

Check ING Direct out. They offer good interest rates (3.80%) without the downturn of having to keep your money tighed-up. They also offer short-term CDs starting at 4.25% APY for 3 months up to 4.85% for 5 years.
 
If you don't need your money your money liquid, why the focus on lower interest rates like money market and CDs? I don't get it. :confused:
 
why don't you donate it to the "Dennis's NSX Fund", and I'll write you a charity receipt for your taxes...:wink: :biggrin:
 
Domestic, large cap growth stocks are the place to be now and for a while. NASDAQ QQQQ is the best ETF since it is highly tech weighted.

1. U.S. stock market is significantly undervalued relative to Bonds, Real Estate and major International stock markets.

2. Growth stocks have been out of favor for 6 years, esp. large caps. All of the Value stocks have been bid up because risk tolerances have been low since 2001. As risk tolerances increase, which they have (look at International markets, emerging markets to see evidence of that), money will flow into growth stocks.

3. Tech is one of the key exports of the U.S. So even if the U.S. economy just chugs along, demand from China, India and Japan will fuel sales by our export products. As long as you are invested in export-related products, you shouldn't have to worry much about how the domestic economy is doing.

4. A weakening dollar, which seems likely as other countries BEGIN raising interest rates (and we're almost done), makes U.S. exports cheaper to the rest of the world. So instead of buying a SIEBEL enterprise software product in Euros, foreigners will buy the now cheaper ORACLE product in dollars.

5. Microsoft's new operating system, coming out late summer/fall, will drive a lot of software, hardware sales and increase awareness to technology amongst investors. They just announced a $500M ad campaign last week for this. Remember all the hoopla surrounding Windows 95? Same thing will happen this year.

6. M&A activity is at a BREATHTAKING pace which very definitely signals that a) CEOs are optimistic about the future, b) Company's are undervalued and c) that optimism will translate into increased budgets for corporate technology investments/upgrades. Many companies have underspent in tech since 2000 and are due for systems upgrades.

7. Japan. The second largest economy is BACK. Its stock market already reflects that, having gone up 60% in the last 12 months. But Japanese companies, seeing light on the horizon, are spending like crazy on technology upgrades.

8. The individual investor is BACK. Look at the stock price of Schwab, Etrade or Ameritrade. Those companies have run because there is a flood of money coming back into the stock market (not just tech, but everywhere). In Jan, Schwab announced a 60% increase in assets over the month before!! Unbelievable. Recent new highs in the stock market will only raise awareness and bring additional money in as the media gets behind it.

9. Accounting. Companies' earnings are "cleaner" than ever before, due to Sarbanes Oxley and a much tighter accounting environment from audit firms post-Enron. So when you are comparing P/E ratios now versus 10 years ago, the stock market valuation is lower now AND the earnings quality is higher.

10. Speculative money is coming out of the real estate market. That speculative money isn't going into safe, low return money market accounts. It's going into the only other commonly available high-return asset class - stocks (and probably not into low growth/low return stocks, but into high return tech stocks).
 
The Kid said:
I appreciate all the advice, anyone know about Money Market accounts?


A money market is a savings account that gives an interest rate based on current short term investments. It has the liquidity of a checking account blended with the interest rate of a savings account.

Usually you can get at your money, but with a few stipulations. You are probably going to have to stay above a certain dollar amount to get your interest rate, and you'll probably be limited on how many checks you can write per month. If you go to a bricks and mortar bank, you'll probably also incur a charge if you close the account within a certain period of time, ( usually 6 months ) If you are looking for a liquid account that gives a competitive return, this is the way to go.

Try online banks....i think ING direct was touting the highest mm rates there for a while.
 
Dtrigg said:
Otherwise you could have tax issues. You gave your parents $25k. Without incurring gift tax you can give them $12K each but please check with a tax advisor regarding this. You could have incurred gift tax


He's not going to incur a gift tax unless of course he indicates so on his tax return.
 
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buy ryan's car !!!!!

i think you should invest in some bling to match your phat car:biggrin: :biggrin:
bling_bling_teeth.jpg

:eek:
 
The Kid said:
I recently sold an apartment I use to live in and after all was said and done, I received a check for $65k. I gave my parents $25k, and now Im left with $40k. I plan on blowing $10k on my new house and NSX. Landscaping, new garage door, NSX-R wing, Volk CE28N's, and Comptech Headers. Im pretty handy and will do most of the yard work myself. Heavy duty stuff I need done.


Anyways, what do I do with the $30k? I know its not alot but I dont want stocks. I dont need immediate access to the money as I still make six-figures and im still single.:biggrin:

Vanguard, Money Market, Regualr savings account, ??????

Help please, Ive asked my parents but they are clueless about this type of stuff.
Michael, $100k+ for being 26 years old is excellent. Is it a commission based type of job?

As to what to invest in, I suggest mutual funds. You mentioned you don't want stocks, but how about stock funds?
 
SilverStone05 said:
He's not going to incur a gift tax unless of course he indicates so on his tax return. :biggrin:
Keep your check writing below 10K and you won't have a problem. Ugh, Gift tax is a joke.

If you wish to lie, that's your choice. Personally, I wouldn't lie for a thousand dollars. In fact, I wouldn't lie at all, but that's your personal decision. Please note that according to the IRS, audits for this year will be up 22%, and large capital gains are the type of things that trigger audits.
 
NsXMas said:
Michael, $100k+ for being 26 years old is excellent. Is it a commission based type of job?

I actually have been making 6 figures since I was 22 and have continued to do so for every year except for one. I get paid a small salary and get commision on every car sold. I also get a demo too. We specialize in Sport Compact cars so I always have something wild.

Work hard, play fair and do the right thing....and the rest seems to fall into place. Im very thankful for the situation Im in and never take it for granted.
 
Have you considered the gains taxes that must be paid? Unless you lived there for at least 2 of ther last 5 years. i would suggest 1031 exchange into another piece of property. Defer the taxes indefinately!
 
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