how would you invest 100k in todays market.

Question

how would you invest 100k in today's market. i was privilege enough to get a large some of money at an early age. i would like to invest it in really state but dont know how to approach it due to lack of knowledge. should i purchase a property in full.or put 20% down on different property and rent them out(sounds risky)  or what do you suggest.

Account Closed · Answer

It totally depends on your situation. What's your income, expenses, debt?  I would pay off debt, keep at least 6 mo living expenses in cash and then consider investing the rest. I believe in diversification across asset classes including stocks, bonds, real estate. But dont rush into anything. Study, learn and then make a decision. Remember, keeping capital safe is half the battle. Zero return is still  better than a loss. Take risks that you understand fully.

Blair Halver · Answer

Eddy Martinez , I commend you for wanting to invest your newfound sum instead of just spending it.  Not many young people would be so wise with their money.  Good job!

But PLEASE, whatever you do, get educated about money/finances/investing FIRST.

Be careful of who you are talking to when you say something like "I have $100k, what should I do with it?"  There are too many people out there who may have good intentions, but will recommend you do something that is not in YOUR 100% best interest.

Only YOU can make decisions that are 100% in YOUR best interest.  And because of this, it is imperative that you get educated on this stuff so that you can make your own decisions.  Have all the advisors and mentors that you want, but in the end, YOU make the decision.

Without financial education, it would probably be safer for you to put your money in a managed asset like a mutual fund, municipal bond, or some other low-risk/low-yield investment until you get educated, especially in real estate.

If you haven't read it yet, I would recommend, and probably a lot of people on this forum would recommend Rich Dad Poor Dad by Robert Kiyosaki.  It is a GREAT place to start.

Dev Horn · Answer

Right.  In my past, I was a Certified Financial Planner.  Real advisors have passed a rigorous certification exam and have knowledge in a broad range of investment vehicles & strategies. It comes down to WHO PAYS THEM.  If you are getting "free" advice, that person has to make $ in some way, so it's usually on commissions from products.  To get unbiased advice, you really need to pay a fee for that advice.

Dev Horn · Answer

Ditto on the education.  There are financial strategies that enable you to leverage your investments while diversifying them - for example, having $ in stocks and using that asset to collateralize a loan for real estate.  But as the others suggest, financial strategy can get complicated.  When you seek advise, try to get it from people that "don't have a horse in the race" - i.e., if a guy is a stock broker, he'll probably suggests stocks, etc.  Might be a good idea to talk to an expert financial planner that is not beholden to any particular asset or type of transaction.

Account Closed · Answer

Like others have said, learn how to invest it properly! Do NOT go into a deal because someone else says it's a deal, you have to know how to analyze (and verify) the numbers yourself.

In the meantime look at high yield savings accounts or maybe put it in bank CD's to get some return on it while you learn how and where you want to invest it.

Ira Smith · Answer

@EddyMartinez, firstly, kudos to you for wanting to make your money work for you, and second, as stated many times before, you can't get enough financial education. If it was me, I would think real estate.

Find an agent that has been recommended by people you trust.  I would then look for a duplex in a great area.  You can live in one side and rent out the other.  Don't fall in love with any property; make sure the numbers work.  Over the long term, you can't go wrong with a property that you live in and provides you with income, as long as the numbers going in work.

Since you have never been a homeowner or landlord before, starting this way will allow you to get your feet wet without biting off more than you can chew, IMO.

Nathaniel Loeffler · Answer

Simply asking the question: "what should I do with my $100K?" indicates that you need more financial education. I highly recommend that you spend some time learning before investing in anything (other than your own education of course).

It's rarely a good idea to take a blind leap into something based upon a recommendation.

Action plan:
1. Get a financial education
2. Find a top tier CPA and develop a wealth and tax strategy
3. Develop your exit strategy 
4. Implement your plan with focus and discipline.

Jason Logelin · Answer

last but not least look at the surrounding homes.  an 80k home in a sea of 80k homes is not necessarily a good deal.   you want an 80k home where they go for 100k plus.

Jason Logelin · Answer

ok, well i have read all the answers so far and none of them are giving you the info you need.  And the agent suggesting Detroit is just going to screw you, especially if its a turn key investment, and that is from personal experience.

I was in the same situation you are in and had nobody to guide me but i did my homework and went on sites like this but once i had a criteria of what I needed a property to be for me to buy I just went out and bought it.  1st off, it would be worthwhile to find out if you qualify for a loan, but even if you did, interest rates are moving upward so time is running out on a good rate.  I would prefer a loan with a lower interest rate, below 5 percent, but if you run into the perfect property with multiple offers, why not sweeten the deal with an all cash offer.  Be prepared for a shark fest because at that price point of 70k to 90k, you will have lots of competition from all over the world.  The best investors are looking in the locations you wont see listed on yahoo news as investment property areas.  I am not going to tell you where i look because I am currently looking and finding that I am getting bit in the ass with restrictions.  But Florida is one of them and since you live there it is worthwhile to start there.  Don't expect much help from agents because the commission is not much.  Do the math, follow the 1 percent rule, 800 per month rent no more than 80k, 700 per month rent, no more than 70k and that is with repairs.  But more precisely it's an income property if you take yearly rent / purchase price + repair cost and if that is .12 or higher you have an income property.  In this market I would settle for .11.  .09 and you have the real value of the home but that has nothing to do with the market value which is often higher.   So as you can imagine there are just a handful of homes like this in the entire country and there are plenty of buyers.  As for as short sales go, forget that, unless you have the patience of a saint and are making multiple offers.  You're most sure bet is to buy a site built 3bed/2bed 1400sq foot plus house that needs a major repair like a new roof but otherwise is in good shape with hardwood floors.  Make sure the surrounding  school system is good and low taxes at about 1k with no HOA fees, so no condos or town houses ever as they have rental caps anyways. 
 
Good luck and welcome to the jungle

Ed L. · Answer

I would buy 3 $35,000 houses.  Rent them all out until mom and dad finally boot you out of the nest.  Then move into one of the homes.

how would you invest 100k in todays market.

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