My wife and I have one rental property and are saving for another one. By my estimates, it will be about two years before we can get another piece of property. What do you think I should do with my money in the mean time? Its currently in a high-yield savings acct but I'm open to any ideas that are low risk since I'm trying to preserve my capital for the next investment. Thanks all!
I am not sure how if you can tolerate some risk (since your bank account has zero risk), but other simple ways to invest:
- Peer-to-peer lending, such as lendingclub.com, can help you generate a couple % higher than that bank account. (~5-10% depending on how conservative you go). You buy a portion of an individuals loan ($25 out of someone's $15,000 home improvement loan) and every month you get your portion of the payment received (***there is risk involved!***). Think micro hard money lending. They have two lengths of loans at this time, 36months and 60months. That is longer than you said, but they also have a trading exchange where you can buy out someone's portion at a discount/premium.
- Index fund investing can be a "stress" free and hassle free way to get into the investing in the stock market. Bogleheads.org is a forum filled with people that can help you and can guide you, for the short term (bond and Treasury funds) and long term (S&P 500 index funds, Total stock market funds, etc.). The risk here is that the market might be down where you want to take out your money. However, you could get the best returns here too. The Bogleheads can definitely help you understand risk management and investing for the short term.
- Rolling them into a CD's could be another good idea. You could put the money you currently have saved up into a two year CD. After 6 months, put the other money saved up into a 18 month CD. After 12 months, put the next chunk of money saved up into a 12 month CD, and so on. After two years, all of your CD will terminate (make sure they do not roll over into a new CD). The potential downside is, if you find a deal or opportunity where you need the money, early withdrawal fees might eat it your gains.