Lookin for good investment advice.....

[ItsAlive]

Hello all,

I'm 24yrs old....still kinda young, and I recently came into a large sum of money. Now I'm looking for some sound advice in how to invest it so I have something for the future. I am looking for High yield, low risk investments. I'm willing to invest rougly half in long term if necessary and the rest I would like to keep for short term investing. Soon I will be buyin a house and I have a baby on the way to prepare for as well. I'd like to invest some for baby's college. I am relatively new to finance, but I catch on quickly and have always had a level head when it comes to money. Any help would be very much appreciated.

Please try to keep this thread as serious as possible. Thank you!!!

 

[junkerman123]

One of the safest investments at the moment with a decent return is a Bulk CD. An investment of 100,000 or more over 5-10 years will get you locked in around 5%. Talk to your bank or an investment company like ING for specific rates.

 

[Descartes]

IMO, you should go talk to someone, not a forum. There are far, far too many things to consider for any appreciable amount of money.

Do yourself a favor and spend the money to get a financial plan at the very least.

 

[ItsAlive]

I had considered that as a possibility....but i had doubts about fluctuation in interest rates having an effect as i wasnt sure if it was a locked rate or not. Also is it safe to say that 5% is about the highest rate i could get for now?

Thanks for the input as well.

To Descartes: As of now im just trying to get a rough outline of where to start from. When you say spend the money to get a financial plan do you mean hire a financial advisor of some sort? Also where is a good place to start in doing that? Thanks.

 

[MrChad]

Originally posted by: Descartes
IMO, you should go talk to someone, not a forum. There are far, far too many things to consider for any appreciable amount of money.

Do yourself a favor and spend the money to get a financial plan at the very least.

Agreed.

 

[BigJ]

How large? Alternator large?

 

[junkerman123]

Originally posted by: ItsAlive
I had considered that as a possibility....but i had doubts about fluctuation in interest rates having an effect as i wasnt sure if it was a locked rate or not. Also is it safe to say that 5% is about the highest rate i could get for now?

Thanks for the input as well.

In a fixed-rate CD, around 5% is the highest it goes (you could probably swing 5.2 at an itnernet bank but you don't want that).

If it is a LARGE amount though, you should follow others' advice and talk to a financial advisor. I recommend going to the planner at your bank to start instead of trying one of those independent services like Ameriprise because they just try to get you to buy stuff. A trained advisor could expose you to a balanced portfolio of risky and risk-free assets that you probably have never heard of (municipal bonds, currency indeces, etc). Plus, many companies put together portfolios with negatively correlated assets to minimize risk and stabilize returns.

 

[EKKC]

Originally posted by: BigJ
How large? Alternator large?

10,000,000 pesos grande, amigo

 

[ItsAlive]

Sorry but I'd rather not get into specifics on the quantity... I am just looking for tips on how and where to start....preferably from anyones personal experiences.

 

[halik]

high yield, low risk ... uh huh, let me know when you find that.

I find it amuzing that you're asking a computer forum to help you invest a "large sum of money" (whatever that might mean)

 

[vi edit]

For safe and liquid, your best bet is something like the Prime Money Market fund over at Vanguard. Depending on tax brackets and the size of the investment, you could consider tax free muni based money market accounts or bond funds. I see that you are in IL. There aren't many for this state. If you were in CA or a few other states, you could go tax exempt. But since you don't live there that's not an option.

Other suggestions would be looking at T-bills for short term safe investing. You can buy them directly from the US Treasury.

For investing in college education, I-Bonds are a smart choice for low risk, higher yeild options. They also have a tax advantage if you use them for educational expenses. Just be mindful of the interest rates you get on them. Last October I was buying in at 6%. Right now it's like 2%. That's not that great of a deal.

Another alternative is that I think IL allows the 529 educational IRA plans. It's basically a tax exempt investment account (like a Roth) that is used for educational expenses.

Really though, you should seek out a well recommended fee-based financial advisor that provides you advice and guidance tailored to your goals. Don't go to one that makes his money by pushing products to you.

 

[NanoStuff]

How about my Anti-Pigeons? I'm gonna try and breed pigeons that are composed entirely of anti-matter. They will naturally seek out and attempt to breed with regular pigeons and upon contact both pigeons will disappear.

Think about it.

 

[ItsAlive]

Originally posted by: halik
high yield, low risk ... uh huh, let me know when you find that.

I find it amuzing that you're asking a computer forum to help you invest a "large sum of money" (whatever that might mean)

I'm glad you find it amusing when someone asks for help as I'm sure you've never done before in your lifetime.

 

[Descartes]

Originally posted by: junkerman123

Originally posted by: ItsAlive
I had considered that as a possibility....but i had doubts about fluctuation in interest rates having an effect as i wasnt sure if it was a locked rate or not. Also is it safe to say that 5% is about the highest rate i could get for now?

Thanks for the input as well.

In a fixed-rate CD, around 5% is the highest it goes (you could probably swing 5.2 at an itnernet bank but you don't want that).

If it is a LARGE amount though, you should follow others' advice and talk to a financial advisor. I recommend going to the planner at your bank to start instead of trying one of those independent services like Ameriprise because they just try to get you to buy stuff. A trained advisor could expose you to a balanced portfolio of risky and risk-free assets that you probably have never heard of (municipal bonds, currency indeces, etc). Plus, many companies put together portfolios with negatively correlated assets to minimize risk and stabilize returns.

I agree with everything except the Ameriprise part. Ameriprise doesn't make their money by selling products. You pay them for a financial plan, and if you choose you can execute that plan by allowing them to hold your accounts for a certain fee. They have dozens of companies from which they purchase funds, etc.

FWIW, I use Ameriprise. They manage my personal and business accounts from an investment perspective, my CPA manages my personal and business assets from a tax perspective, and all is right with the world. I simply send them a check every week and that amount is distributed according to the financial plan that we have devised to meet my short-term and long-term goals.

Financial planners aren't investment geniuses; they're managers. They take on the responsibility of everything else that most people simply don't have time to do. This is why I believe it's more important once you have a larger sum of money, because there comes a time when managing your own money takes more time (not to mention stress) than it's worth. They also have countless ways to deploy your money to decrease tax liability, etc.

I would go to a bank, but in my experience most of them simply don't have enough knowledge for business owners like myself. Financial planners really help put it all together.

My $0.02

 

[EKKC]

Originally posted by: ItsAlive
Sorry but I'd rather not get into specifics on the quantity... I am just looking for tips on how and where to start....preferably from anyones personal experiences.

i lost 25% of my investment yesterday within seconds. read on...
fed 4 quarters into a parking meter for a 1 hour parking contract, somehow only 3 quarters registered. so i'm out 25% of my initial investment. needless to say, I was fumed and will never invest in anything ever again. sucks eh?

i put half my money in stocks, split that into mutual funds and stocks. if you have money you can afford to lose you should play the market with your own research, if you're scared, go with a financial planner. and yeah i heard ameriprise is quite good

 

[kranky]

I give you credit for seeking advice before plunging in, although this is probably not the best place to ask.

Without knowing how much money you received, how much you already have saved, what your long-term investing goals are, what your risk tolerance is, what your tax situation is, etc., it's impossible to give you the best advice possible.

I would recommend getting a thorough financial plan from someone local to you. That's the only way for someone to get a total picture, understand your needs, and recommend a plan. So how do you do that when you don't know anyone? Ask people who you think might already deal with someone like that.

I think the best option is to pay someone for a plan, and that might run a few hundred dollars. But that way you have a plan to follow, and no obligation to invest with that same person. You could implement the plan with anyone.

Getting a plan "free" from an advisor is going to mean all the recommendations will be for products that person sells. You could end up paying much more in commissions than you would pay for a plan on its own.

I got my plan from a guy at Ameriprise (used to be part of American Express). He was disappointed I did not invest with him, but I paid for the plan separately and felt no obligation. Then I implemented the plan through Vanguard which has low fees and no commissions to pay.

Feel free to PM if you want.

 

[akubi]

high yield and low risk? if it were that easy, everyone would be filthy billionaires.

pick one or the other, or somewhere in between... don't expect both

 

[yobarman]

I disagree with a financial advisor. You'd be like a peice of turkey in their hungry eyes.

If you are serious about investing, please read some books on the subject.

Here are a few I recommend. These are essential for any investor:
"The intelligent investor" by ben graham
"The warren buffet way" by robert hagstrom

This is some additional reading

"The Motley Fool Investment Guide" by dave and tom gardner


There's a ton more you read too, but if you actually finish those books i could recommend more.

 

[junkerman123]

Originally posted by: Descartes

Originally posted by: junkerman123

Originally posted by: ItsAlive
I had considered that as a possibility....but i had doubts about fluctuation in interest rates having an effect as i wasnt sure if it was a locked rate or not. Also is it safe to say that 5% is about the highest rate i could get for now?

Thanks for the input as well.

In a fixed-rate CD, around 5% is the highest it goes (you could probably swing 5.2 at an itnernet bank but you don't want that).

If it is a LARGE amount though, you should follow others' advice and talk to a financial advisor. I recommend going to the planner at your bank to start instead of trying one of those independent services like Ameriprise because they just try to get you to buy stuff. A trained advisor could expose you to a balanced portfolio of risky and risk-free assets that you probably have never heard of (municipal bonds, currency indeces, etc). Plus, many companies put together portfolios with negatively correlated assets to minimize risk and stabilize returns.

I agree with everything except the Ameriprise part. Ameriprise doesn't make their money by selling products. You pay them for a financial plan, and if you choose you can execute that plan by allowing them to hold your accounts for a certain fee. They have dozens of companies from which they purchase funds, etc.

FWIW, I use Ameriprise. They manage my personal and business accounts from an investment perspective, my CPA manages my personal and business assets from a tax perspective, and all is right with the world. I simply send them a check every week and that amount is distributed according to the financial plan that we have devised to meet my short-term and long-term goals.

Financial planners aren't investment geniuses; they're managers. They take on the responsibility of everything else that most people simply don't have time to do. This is why I believe it's more important once you have a larger sum of money, because there comes a time when managing your own money takes more time (not to mention stress) than it's worth. They also have countless ways to deploy your money to decrease tax liability, etc.

I would go to a bank, but in my experience most of them simply don't have enough knowledge for business owners like myself. Financial planners really help put it all together.

My $0.02

I actually once was offered a position at Ameriprise, after my sophmore year of college. The position required making calls to already existing customers and "recommending" to them that they invest in the company's newest mutual fund solutions. That is where I got the idea that they had people "selling" funds. However, I never actually took the job nor have ever used their services, so I guess I was out of line in using them as an example. If they work for you guys, then they must not be so bad.

 

[PokerGuy]

As kranky said, what you need to do depends on a lot of factors. Your strategy depends on your goals, your situation, the amount you have available etc etc etc.

If the sum of money is in any way significant, you should talk to both a financial planner and a tax accountant before doing anything. If you have more than $100K or so to invest, I'd look into a managed separate account. Mutual funds are a good way to diversify your investments, but there are plenty of pitfalls there as well, which is why you need the help of a financial planning pro.

 

[vi edit]

Originally posted by: yobarman
I disagree with a financial advisor. You'd be like a peice of turkey in their hungry eyes.

If you are serious about investing, please read some books on the subject.

Here are a few I recommend. These are essential for any investor:
"The intelligent investor" by ben graham
"The warren buffet way" by robert hagstrom

This is some additional reading

"The Motley Fool Investment Guide" by dave and tom gardner


There's a ton more you read too, but if you actually finish those books i could recommend more.

Not true. That's why I suggest the fee based. With these guys, it doesn't matter if you have $1000 to invest, or $1,000,000 you still pay the same per hour and get the same service. Obviously things will be more complicate the more money you have and the various tax situations to consider, but when it boils down to it, you are paying for a service. Not paying commissions on a product.

Very different than something like the Edward Jones's of the world. A fee based advisor empowers you with decisions. One that works on commissions are faced with the dilema of offering you the right choice, or push a wrong one that makes them more money.

 

[Descartes]

Originally posted by: junkerman123

Originally posted by: Descartes

Originally posted by: junkerman123

Originally posted by: ItsAlive
I had considered that as a possibility....but i had doubts about fluctuation in interest rates having an effect as i wasnt sure if it was a locked rate or not. Also is it safe to say that 5% is about the highest rate i could get for now?

Thanks for the input as well.

In a fixed-rate CD, around 5% is the highest it goes (you could probably swing 5.2 at an itnernet bank but you don't want that).

If it is a LARGE amount though, you should follow others' advice and talk to a financial advisor. I recommend going to the planner at your bank to start instead of trying one of those independent services like Ameriprise because they just try to get you to buy stuff. A trained advisor could expose you to a balanced portfolio of risky and risk-free assets that you probably have never heard of (municipal bonds, currency indeces, etc). Plus, many companies put together portfolios with negatively correlated assets to minimize risk and stabilize returns.

I agree with everything except the Ameriprise part. Ameriprise doesn't make their money by selling products. You pay them for a financial plan, and if you choose you can execute that plan by allowing them to hold your accounts for a certain fee. They have dozens of companies from which they purchase funds, etc.

FWIW, I use Ameriprise. They manage my personal and business accounts from an investment perspective, my CPA manages my personal and business assets from a tax perspective, and all is right with the world. I simply send them a check every week and that amount is distributed according to the financial plan that we have devised to meet my short-term and long-term goals.

Financial planners aren't investment geniuses; they're managers. They take on the responsibility of everything else that most people simply don't have time to do. This is why I believe it's more important once you have a larger sum of money, because there comes a time when managing your own money takes more time (not to mention stress) than it's worth. They also have countless ways to deploy your money to decrease tax liability, etc.

I would go to a bank, but in my experience most of them simply don't have enough knowledge for business owners like myself. Financial planners really help put it all together.

My $0.02

I actually once was offered a position at Ameriprise, after my sophmore year of college. The position required making calls to already existing customers and "recommending" to them that they invest in the company's newest mutual fund solutions. That is where I got the idea that they had people "selling" funds. However, I never actually took the job nor have ever used their services, so I guess I was out of line in using them as an example. If they work for you guys, then they must not be so bad.

Interesting. Something like that would completely turn me off; however, the guy that I work with actually owns the firm, so he too is a small-business owner. He's there more to push himself as a financial advisor than anything else.

Also, in my experience, Ameriprise invests in dozens of different company's funds, including Fidelity and Vanguard.

 

[yobarman]

Originally posted by: vi_edit

Originally posted by: yobarman
I disagree with a financial advisor. You'd be like a peice of turkey in their hungry eyes.

If you are serious about investing, please read some books on the subject.

Here are a few I recommend. These are essential for any investor:
"The intelligent investor" by ben graham
"The warren buffet way" by robert hagstrom

This is some additional reading

"The Motley Fool Investment Guide" by dave and tom gardner


There's a ton more you read too, but if you actually finish those books i could recommend more.

Not true. That's why I suggest the fee based. With these guys, it doesn't matter if you have $1000 to invest, or $1,000,000 you still pay the same per hour and get the same service. Obviously things will be more complicate the more money you have and the various tax situations to consider, but when it boils down to it, you are paying for a service. Not paying commissions on a product.

Very different than something like the Edward Jones's of the world. A fee based advisor empowers you with decisions. One that works on commissions are faced with the dilema of offering you the right choice, or push a wrong one that makes them more money.

Perhaps not true on the vulture comment, but he is being empowered with decisions he should still know how to value invest, then move onto more advanced riskier topics if he wishes.

 

[ItsAlive]

Aside from Ameriprise is there any financial advisor you'd recommend?

 

[heelside23]

Originally posted by: yobarman
I disagree with a financial advisor. You'd be like a peice of turkey in their hungry eyes.

If you are serious about investing, please read some books on the subject.

Here are a few I recommend. These are essential for any investor:
"The intelligent investor" by ben graham
"The warren buffet way" by robert hagstrom

This is some additional reading

"The Motley Fool Investment Guide" by dave and tom gardner


There's a ton more you read too, but if you actually finish those books i could recommend more.

Adding to your list. I recently bought "One up on Wall Street" by Peter Lynch

I'd also recommend "The Essays of Warren Buffett"

Those things aside. Without going into too much discussion, I think index funds are one of the best ways to diversify while minimizing your fees.