If you had $10,000 laying around...

[rondocap]

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

[Topless]

Originally Posted by rondocap

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

The mice type:
"Past performance is no guarantee of future gains."

It really depends on your goals and how much you are wiling to risk. If you are really financially well established you may be willing to chase higher returns knowing that you could lose it all. I tend to look at investments long term and I am not much of a gambler. 5 years is a very short investment window for me.

With the OP I agree that the first question should be "What are your goals?" Fatmike gives very sound planning advice that I agree with but it always depends on your goals. $10K might just be 6 months of living expenses that you don't want to risk so leave it in the bank. The question "What would I do with $10k?" is probably not very useful because each of our goals and situations are different.

[Porsche Chick]

Originally Posted by rondocap

On these investments, what are the average or conservative gains? If a Savings account is only like .08%, will these other investment options yield higher rates? 1-5%? Or what?

No one should ever give investment advice, but I will offer this; I like a high dividend yield on a solid stock. Yahoo financial has some wonderful screeners that you can use to find a return from 2% on up into double digits. I have a few that were yielding 8-10% when purchased and the increase in price is just gravy. Then you have to figure out what kind of market cap you are comfortable with, which industries you know something about, and dig into the companies to see which ones are solid. Set a reasonable stop loss.

[BruceH]

Spend a few bucks on a book. The rest in an IRA. Take a look at this site and then buy the book. Easy read and the best investment advice you will ever get IMO. Porsche Chick is right about index funds.

http://www.gonefishinportfolio.com/

[RandallNeighbour]

Originally Posted by Paul

Roth IRA, start putting money away now for retirement, all of us that are 60 plus wish we would have started at your age. Pay your taxes now on retirement income so that it will be tax free when you retire. Taxes will be much higher by the time you retire.

Where is the like button?

(I'm now a financial planner and soooo wish I had saved money when I was in my 20s and 30s instead of buying cars.)

[WhipE350]

Originally Posted by Johnny Danger

This is what I would do !


Diabolik - the 'money orgy' scene - YouTube

Yup that about sums it up for me! Easy choice.

[Perfectlap]

If you hire any manner of 'financial advice" person make sure theyre a fiduciary. Don't buy any explanations for why they aren't. This was a lesson my folks learned the hard way at an age where there are no mulligans.

Don't buy mutual funds. Biggest scam ever. The number of funds that beat the S&P 500 over 10 years is a shocking joke. Their fees are not properly reported, they calculate only the front end and that's based on your total contribution not on the actual part of your return that stays in their pockets. And they don't disclose the back end fees like trading fees and spreads on a per fund basis. Combine the two (fixed and variable fees) and in the long term its no different than carrying a high interest credit on high debt...you are getting robbed blind. And the pee poor performance applies to virtually ever managed asset class hedge funds in particular. The author Michael Lewis said it best in one of his early books, Liars Poker I believe, these guys are nothing more than well paid toll takers. Bottom line, if you are investing a significant portion of your available capital into the stock market, invest in index funds, ETFs and run from active management fees as fast as you can.
Those guys were saying for years that their plans reduced risk to justify their hugely inflated fees and salaries. Then came the mother of all tests of this justification in 2008 and they all failed miserably. The number of funds that preserved their investors' capital and didn't bleed half of it or more, nearly overnight, could fit in a thimble. They were forced to ride out the down turn and pray for a reversal just like every index fund but still charged you their inflated fees. And how much are these fees costing you over the course of 30 years since your initial investment? Try as much as 66% according to John Bogle, the longer they manage this money the less you'll see. Its the big dirty secret of most 401k plans that try to steer you into mutual funds instead of index funds. I called the investment firm handling my 401k funds and was not surprisingly told that no matter what I chose I would still have to keep half of my contributions stuck in their pre-selected group of "diversified" mutual funds sucking away a third or more of each years return. Returns that the s&p handily beat for every single one of those over-priced funds.

As for picking individual stocks, that's also a very tough game to win. The S&P is going to beat 99.6% of those who try. Fine for a few shares but that's really just a learning exercise and not an overall strategy for the bulk of your finite capital. If the $10k you are putting into a company stock is anything approaching double digits of your total investments you are headed for a costly lesson.

[TeamOxford]

Originally Posted by Perfectlap

Its the big dirty secret of most 401k plans that try to steer you into mutual funds instead of index funds.

An index fund IS a mutual fund, just one that is not actively managed, and carries a lower expense ratio.

If the OP is seriously considering investing $10k, I would suggest that he do nothing (other than putting it in a savings account) for at least six months, while he does his own research on the subject. It's not rocket science, trust me.

It was originally stated that the money was"$10,000 that you don't need(assume that all bills, etc. are paid" and that the OP was "thinking of investing, but haven't the first clue where to start."

I'd make sure that some of the tenets laid out by fatmike had been fulfilled first:

1 - Have 6 months of living expenses in a savings account. If you don't have this already, do it and maintain it.
2 - Pay off any high interest debt (credit card, car loan, etc.).

But if you're really looking for more of a kick than watching your money grow, I'd do what Porsche Chick suggests:

"spend a month in France, renting an apartment, flying cheap, and eating cheap."

OR............for just $10,000, you could subscribe to the TeamOxford Postcard Club, which guarantees you a brand new postcard EVERY WEEK for a full year, from some new exotic locale!

Just PM me, dude!

TO

[01SBox]

Very good advice.

Originally Posted by TeamOxford

An index fund IS a mutual fund, just one that is not actively managed, and carries a lower expense ratio.

If the OP is seriously considering investing $10k, I would suggest that he do nothing (other then putting it in a savings account) for at least six months, while he does his own research on the subject. It's not rocket science, trust me.

It was originally stated that the money was"$10,000 that you don't need(assume that all bills, etc. are paid" and that the OP was "thinking of investing, but haven't the first clue where to start."

I'd make sure that some of the tenets laid out by fatmike had been fulfilled first:

1 - Have 6 months of living expenses in a savings account. If you don't have this already, do it and maintain it.
2 - Pay off any high interest debt (credit card, car loan, etc.).

But if you're really looking for more of a kick than watching your money grow, I'd do what Porsche Chick suggests:

"spend a month in France, renting an apartment, flying cheap, and eating cheap."

OR............for just $10,000, you could suscribe to the TeamOxford Postcard Club, which guarantees you a brand new postcard EVERY WEEK for a full year, from some new exotic locale!

Just PM me, dude!

TO

[Porsche Chick]

OR............for just $10,000, you could suscribe to the TeamOxford Postcard Club, which guarantees you a brand new postcard EVERY WEEK for a full year, from some new exotic locale!

Just PM me, dude!

TO[/QUOTE]

For $10K, I will send you a postcard Twice a week!

[AndyA6]

Ok guys! Lucky me I have one credit card I pay off every month. Box is paid for, too. So I would get me a Ducati for the stable and invest in me still being healthy and enjoy as long as I can.

Otherwise I would truly get me some IRA, sound advice!

[Skrapmot]

Take it and use it for a nice trip with the family, kids grow up fast . If you got 5k or more, pick up a nice lifetime lasting watch like a Rolex (preowned), to wear and give to your kid when you're older.
Enjoy life as much as possible, try to save for retirement, but don't neglect living a little.

[Perfectlap]

Originally Posted by TeamOxford

An index fund IS a mutual fund, just one that is not actively managed, and carries a lower expense ratio.

yes I should not have have used 'mutual fund' to describe all actively managed funds in contrasting them to passively managed index funds. My mistake, but expense ratios are most certainly not the only difference between passive and active management of your mutual funds. Expense ratios which the actively managed mutual fund industry loves to tout, are only half the story: Expense ratios do NOT include transaction costs and hidden fees (the point of my previous post) and these are nearly as much as the actively manged fund's already over-inflated expense ratio. costs on top of cost. These too are almost always higher than passive index funds.

The last think tank (Demos-Hiltonsmith Report) that took a hard look at what this 'double charge' represents to a two-earner household where each is making the average U.S. salary estimated:

$50K invested returning 7.11% (mutual fund average before inflation) = +$3,555
Expense ratio 1.23% = -$615
(Now the part they leave out of the expense ratio)
transaction fees 1.23% = -$615

true fees: ( $615+$615)/$3,355 = 34.6%
Now toss in inflation to whittle down the 7% return to 5% and the 'true fees' are nearing 50%........

Cost to that average income household? nearly $155K in lost savings. If your're in the higher income household bracket? Nearly $280K. Meh...who needs $280k
Already retired and you left the $357,872 in the 401k put? First year of retirement you'd be out $5,723 in fixed expense ratio fees and variable costs. That's a nice trip to Hawaii you're not taking for nothing in return.

expense ratios are not the only difference folks. Take a hard look at your actively managed mutual fund investments. And don't be surprised if you don't see these transaction costs and hidden fees in your prospectus. They leave those for the SAIs than no one ever reads and are opaquely reported. Largely why the lawyers have gotten nowhere in fighting these 'excessive fees' in many legal cases, they tell you up front that you're being taken to the cleaners but most think the expense ratio is the only consideration.

and as far as the actual performance part of the equation, consider this scathing analysis of mutual fund 'managers'
S&P 500 index funds beat 99.6% of fund managers over 10 years-- Number of fund managers that beat the S&P over the past 5 years: 5

[DFW02S]

I'd spend it on booze, broads and fast cars .... the rest I'd just squander.

Hat tip to George Best.

[SF-Rockster]

Originally Posted by Skrapmot

Take it and use it for a nice trip with the family, kids grow up fast . If you got 5k or more, pick up a nice lifetime lasting watch like a Rolex (preowned), to wear and give to your kid when you're older.
Enjoy life as much as possible, try to save for retirement, but don't neglect living a little.

On the money!

10k is not a lot of money.
Can't really invest in too much.
Invest in family!
Returns on that are priceless!

Take your family on a trip.
You don't have to blow all your money on traveling but maybe camping at the lake and rent a house boat and some jet skis for a week.
About $5 k
Don't ask me how I know. Haha
The rest save it for a rainy day.

[Porsche Chick]

Originally Posted by Perfectlap

and as far as the actual performance part of the equation, consider this scathing analysis of mutual fund 'managers'
[URL="http://www.zerohedge.com/news/2013-04-29/wall-street-rentier-rip-index-funds-beat-996-managers-over-ten-years"]S&P 500 index funds beat 99.6% of fund managers over 10 years-- Number of fund managers that beat the S&P over the past 5 years: 5[/URL]

I think you and I are on the same page, PL. One of my best friends' husband is a fund manager and he's just thrilled when he beats the index by 3%. This is considered very good in his circles. I just because I know it all gets eaten by fees.

Earlier in this thread, someone mentioned Berkshire B stock and I think that is as close to a no fee "fund" as you can get, without buying an actual mutual fund. A diversified mix of businesses, active management, and their lows are not quite as bad as the Dow 30 lows. It's a thought . . .

[Perfectlap]

^It's not just mutual fund managers, it's every kind of investment manager. I've seen studies that hedge funds (as a class) keep 98% of the profits they make with their investors money.
And that's because so few can beat the S&P over any significant period of time and simply shut down the fund. But they become fabulously wealthy collecting that cut of your initial investment win or lose. And private equity fund managers have the best deal of all: they get to keep that management fee even if they decide not to allocate a dime of your money towards any PE investment, getting rich for doing nothing! And if they lose any money they can simply walk away from any new debt they created (and used to pay themselves big salaries) thanks to the bankruptcy laws and the rule of OPP (other people's money).

To the OP, when people say "10K is not a lot of money" think abou this.
in 1965 $1,355 would be the equivalent of $10K today. Had you invested that $1,355 in the S&P, today you'd have ~$51K. Do you know how many seniors today can not write a check for $600? USA Today did a story on just that and the number is somewhere in the high 90% range (staggering numbers of seniors still living pay check to pay check after 65 -- I blame the costly pipe dream of home ownership).


Had you invested that $1,355 in Berkshire?

$14,000,000.

^ Timing is everything... but I'll settle for $51K if that's all I can get.

Rarely did a huge pile of money not start as a very very small one. If you wait until you have "a lot of money" to start investing in your future you're going to miss one boat after another. You'll never have good timing if you're on the sidelines.

[cameronzero]

fresh tires, semi solid motor and transmission mounts, fresh paint job, motor refresh, full custom exhaust and intake, SS brake lines with new rotors w/pads, and suspension work for the 986.

turbo build with 3" turbo back exhuast, 15x8et25 konig wideopens, comp tires, xida coilovers, autokonexion fast back top, dual hoop roll bar, SS brake lines and comp rotors w/ pads, SS clutch lines, 6 spuck sprung clutch with HD pressure plate and LWFW on a balanced crank with ATI damper for the Miata.

i may be over by a c-note or so for shipping, but most of that stuff is local.

could die tomorrow, why wait until i'm old and infirm to enjoy life?

ninja edit: old and infirm for my people is 45-50.

[TeamOxford]

Originally Posted by DFW02S

I'd spend it on booze, broads and fast cars .... the rest I'd just squander.

Well, there's that then too.

A man has GOT to get his priorities in order......

Just sayin'....................

TO

[pjq]

Well, we're on a Porsche forum so if your going to keep your car put the money into your engine, rebuild/upgrade. It'll pay back 10 fold with years of trouble free enjoyable driving. Drive it don't store it.
There are some reputable engine shops that support this forum you could choose from.