I disagree completely. You are young, stay liquid, trust me don't buy a house until you are willing to commit. Invest only in things that you understand or are educated about. Stocks may be risky to this poster but not to me... If you are trained and financially educated, you are able to read a financial statement and value a company. If you can do this, you can buy good companies that are undervalued.

I'll give you an investment tip too, I like this dividend stock MO (cigarette company). They make a cigarette for 1 cent and sell it for a dollar, the product is addictive and people will continue smoking forever.

This company is well managed, and the balance sheet is solid. They make so much cash flow that the dividend yield is sub 5%, allocated like 5K into this and just forget about it. As what to do with your 50k, financially educate yourself like the other posters have been saying. Check this article out, it shows you (and educates you) about choosing the right companies for stocks. How to Invest Like Warren Buffett For Dummies

I find it funny that people spends months before trying to purchase a car in order to get the best deal, but take 10 minutes in choosing which mutual fund to invest in... Don't invest in mutual funds (I dont)

If I were you, I would try to invest and grow your 50k so that I would have 100k. Once I have 100k, invest in an apartment building. Or you buy a cash flowing business, but it requires a little more saavy, I can go on and on about that too...
[/quote]
I figure if I buy a house cash (multi-family), I can save on my monthly rent, receive income from the other apartment, and stop paying for someone elses mortgage payment...

I am not trained and I am not financially educated very much so I wouldn't feel comfortable investing a large amount of money into stocks. I will be reading a lot and trying to learn more on what to do before I make any moves. A cash flowing online business is something I'd be interested in trying to start or buy. I need to do more research.

Thanks for your reply

 

I just got a promotion that doubled my annual pay. I'm sort of in the same boat except I have a student loan.

I plan on having some money stashed away sometime in the next year to make a sizable investment. I'd never buy a stock that requires me to take a dividend. Typically, you'll find that companies which don't offer dividends maintain more favorable EPS and you'll make more in capital gains without the taxes associated with dividends.

Bonds are safer than stocks in a tumultuous markets because if the company goes south (a la GM), the bond holders get precedence before stock holders in bankruptcy court in a worst case scenario. A handful of well thought out junk bonds would be very good for adding some risk to a portfolio since they seem to have made the largest gain since the bear stearns collapse.

I agree on staying away from mutual funds. They are too sanitized to justify losing the liquidity of your money for little upside.

T-bills are good to balance out risk without the idea of expecting an actual return.

I haven't really looked into commodities markets lately.... I'll be doing lots of corporate valuations before making my buys to determine market arbitrage and current pricing.

 

the best way to invest $50k would be a built motor, quality turbo kit, built rear end & good tuning session. Maybe a paint job & some other accessories too.

 

^ ++

this is a car forum LOL jk

 

Warren Buffett makes money over time and will hold a company for years; he's also selling a bunch right now and his company isn't as strong as it once was, IMO. With only 50k available, I would look into short-term with some long (over a year), but not day trading unless you can commit the time and are good. There are plenty of books out there to read and tons of forums to see what may be best for you. Most trading platforms have E-seminars for free if you open an account with them, which only requires a minimum deposit. Agree with above on learning to research a company, ie. interpreting an earnings statement. You could do this for fun: http://milliondollar.cnbc.com/contest/static/home.html If you do decide to invest, don't rush; invest with imaginary money and track everything in a notebook until you get the hang of it--don't make an expensive mistake.

 

my question is...what's your secret? how do you just "come across" 50K?

 

People inherit that much and more every day.

 

Company I have worked with buy foreclosed homes for 60k, put 80k into them... sell them for 300+ K. Usually about 1.5-2 homes per year.
However if you're not handy yourself buying a foreclosed home doesn't make much sense. We completely gut them and start over. You cannot just buy a foreclosed home and flip them and make any sort of decent money to have it be worth time.

Rental property is good, however it will take a decent amount of time (10+ years) to start to get back your initial investment. Which isn't really THAT bad if you're patient.

 

I took this path and it's a great choice for long term investment and immediate savings. 25% down, somebody else pays your mortgage (builds your equity), you have some major tax deductions available now (every trip to home depot, mortgage interest, depreciation, etc), and you have a place to live on the cheap. You have a great opportunity now with depressed property values and low interest rates. Just keep in mind this no get rich quick scheme (this is not a property flip), and it's a part time job maintaining the property and tenant relations. I've grossed an extra $12k/year for $25k down 7 years ago. No risk except for an empty apartment. When you want to move out of town, hire a property manager.

 

Buy two rental properties for $25k each that rent for $600-$700 each. Yes, it's possible, and the return will be better than anything else.