What do I do with 1/2 Million

Question

Part 1:  I need about $250k to be fairly liquid as an emergency reserve for owned properties.  Where do I put this money to kind of keep up with inflation?

Part 2:  Where to invest other $250k?  I would like to diversify from RE a little.  I will invest in more RE when there are future opportunities because of the economy but still wanting to diversify with other investments. Suggestions?

Scott Trench · Answer

I like to warn people to be wary of these questions. Don’t want to alert folks that you have a lot of money liquid. Folks will try to separate you from it.That said, here are my thoughts:1) Take the first $390 and purchase a BP Pro Membership. :)2) I’d find a high yield savings account or money market account. I personally bank with Ally bank and they’ve given good rates to me in the past. This won’t keep up with inflation; your properties will. Liquid emergency reserves are a cost of doing business in real estate and there is no way to have them keep pace with inflation at low risk of volatility. 3) for long term yield and diversification I like two asset classes:- Stock market index funds are a good stalwart, and now may be a good time (it’s certainly better than at the start of the year to buy)- If you are willing to be entrepreneurial, small businesses might be a good option. Check out sites like buy biz buy sell and contact brokers. There are lots of opportunities to buy established businesses for low multiples of cash-flow and or revenue, and there are great returns to be had here for entrepreneurs willing to put in the work.Hope this helps!