Did that get your attention? Well I didn't find money, but I do have a question. Hypothetically speaking, suppose you have a family member that came into some investment money in the tune of about $30K. They have no major outstanding debt to put it towards so they want to invest it. They have two years until retirement and can't afford a lot of risk. Where would you put that money if you were in their shoes? CDs, Mutual Funds, IRAs?

Any ideas?

Thanks

 

I just out a little over 5k into a 16 month CD at my bank that my son came into. It was his share of a house that his deceased mom owned that was sold. I talked to his aunt that works in the trust dept. of the bank and she suggested CD's because Mutual Funds are too risky and in fact are losing money now. This CD pays over 4% interest, locked in, for 16 months at which time I will re-invest.

 

> They have no major outstanding debt to put it towards

Pay off all debt because even a little interest paid out will be more then what you get paid in on interest. Then only invest in things where the prinicpal is protected against loss such as CDs. I would not invest in (muni.) bonds.

 

So in 1 year and 4 months it will make $200.00. OK I guess, but it will take 33 years for the investment to return the original $5k invested. Odds are in that amount of time, you will lose the value of the original investment to inflation. What is the boy's timeline for investing? If it's longer than 16months, then the mutual funds are a much better investment. In order to be able to buy low and sell high, the stocks have to be low at some point.

 

Depending on where this person lives, I would be investing in a land acquistion. Even if you used the money for a down payment and took a ballon note at 5 years it should return a major advancement on the capitol used and you would have 5 years to turn it for profit. If you have access to your state transportation department, they can tell you where the furure expansion will be in your area. Look there for your land deals. And don't buy land in a flood plain or a land fill. You can't get financing on these when you sell. This info is available at the Army Corps Maps department at your local college. Use your common sense and be aware that land barons are the folks that did the deal, they aren't smarter or sharper, they just did it. Best of luck to your hypothetical friend.

 

Thanks guys. I was thinking about land myself because our area is expanding rapidly. CDs are a safe bet but offer little return. I appreciate the input. I geuss its up to the person with money to evaluate their goals to decide which route is best for their money.

This may seem like a stupid question, but I have never been in the market for land. How does someone acquire land? Do I just go talk to a realtor and look at lots for sale? What are some resources to find expansion routes like the Department of Transportation as mentioned above?

Yesterday I heard that the city is looking into selling some land that was going to be used as a park. How do I find information about that?

 

CD's re secure but just as with T-bills and such "safe" investments, they in return for that safety reward less return. And mutual funds are always losing money and always making money. To simply say they do one or the other is incorrect. There are over 4000 mutual funds in the US.

I'd suggest an IRA if they plan to use that money within the next few years for retirement. Depending on age though will depend if there will be penalties or not for withdrawing funds. If they are young and will not need that money now but would like to have it when they need it years and years from the current outlook, go with a good mutual fund. Find one that has a good 30 year, 10 year, 5 year and 1 year return. 30 years to show its been around and the person knows his/ her stuff if that same person has managed it for all 30 years. 10 years to show its return during the tech bubble, 5 years to show how it has done after the tech bubble and 1 to show currently world affairs and influences. Now this may sound hard but just go to a broker or such and ask. I would tell you more details but I can not since I'm studying for my Securities licenses now and me no wanna get in trouble with the SEC.

Find out what the person wants the money to accomplish then weight risk and return.

 

Good solid replies so far, I concur.


What would I do ?? Lets see now, I would dig a hole and hide it from my wife. Then , spend it to finish my truck restore and have money left over for a face lift/tummy tuck. Then, I would go home and she would throw me out of the house, thinking I was a hot looking mugger trying to break in. Hhmmm, wait a minute, what if she didnt throw me out, hmm

 

sounds like you just found the only flaw in your plan, greg.

 

Ha, right on X , the perils of deep thinking I guess

 

back to the orignial question, what would you do if you found 30k in a big envelope with no markings or other ways to trace who it belonged too. i suppose it would also matter on the area in which you found it. If in a seedy area i would assume it was drug money or some sort of payoff. In a well do do area i would assume someone lost it who was going to buy something. But without even a withdrawl slip or some sort of paper with a number and bank on it , how would you know who's it was ? Then i guess you have to rest on your morels. Do you take it to the local cop shop and turn it in ? Do you run an ad in the local newspaper saying you found some money and ask them to call you in and describe it ? Myself without a moment of thought would put this in my pocket and keep walking. Of course i would look around as i walked for someone showing signs of distraught, but with the thought of paying off some bills and providing the kids and the new twins with things we need and fixing the car and tuning up the van so it runs better i think i would keep it. Might have enough left to get that new piece of chrome for the harley if i was lucky

 

If I found cash I would keep it & keep my mouth shut.I'd buy myself a few toys with it. If it was investment capital I would put it in a IRA for long term or a mutual fund in the short term. For my use a Roth IRA would be the best bet since I could start drawing it in 7 yrs at age 59.

 

Local cop station. Easy decision for me.