topic Re: Best way to invest 30k in Personal Finance

Best way to invest 30k

Anonymous — Mon, 23 May 2016 03:04:20 GMT

I am wondering if there is a smarter way for me to invest this amount of money. I saved it up by buying and reselling cars and car parts. Generally 2-5k cars and make around 1-3k profit per "flip". Now I am at quite a large amount it feels slow flipping small values like that. More expensive cars take a lot longer to sell too. A 12k car I flipped for 14k took me 4 months, about 2 more than average.

I have no debt on any credit cards, rent/utilities/food/gas/insurance/phone only come out to 1300 a month and I make 2600 a month so a full paycheck also gets saved. I really would like to buy a house and get renters, but it is seeming like the smartest way is to do 20% down here in CA to keep rates low on mortgage payments and avoid mortgage insurance. I would need around 100k down for houses in my area that would be easy to rent out.

Any tips or ideas are welcomed. The general info I have seen online is Roth Ira, get a nest egg, CDs, ect...but those returns all seem to take a lot longer than what I generally get from flipping cars (around 1k a month in untax income).

Re: Best way to invest 30k

RonM21 — Mon, 23 May 2016 09:59:27 GMT

Don't think I have an answer, but I think it's great what you've saved on the side. Now look at you! You have some $$ to put towards something else. I hope it works out, whatever your decision.

Re: Best way to invest 30k

Anonymous — Mon, 23 May 2016 14:46:46 GMT

You have a talent fixing cars. Is this going to be a full time career or continue to be a side hustle? I think investing it in a rental property is probably a good route as well. Do you have any other assets? Home, retirement, pension, etc...

Re: Best way to invest 30k

Anonymous — Tue, 24 May 2016 18:34:55 GMT

That would be my first question as well. Sounds like you should have quite a bit saved up if you are able to put away a full paycheck each month, and assuming the $30k is just from the car flipping. But we would need a better idea of your current assets/savings.

Re: Best way to invest 30k

Anonymous — Wed, 25 May 2016 04:57:20 GMT

If you like flipping cars, you can start your own dealership. Start hiring other mechanics and sales staff, and you get a piece of every transaction.

Re: Best way to invest 30k

Anonymous — Wed, 25 May 2016 05:06:18 GMT

@Anonymous wrote:
I am wondering if there is a smarter way for me to invest this amount of money. I saved it up by buying and reselling cars and car parts. Generally 2-5k cars and make around 1-3k profit per "flip". Now I am at quite a large amount it feels slow flipping small values like that. More expensive cars take a lot longer to sell too. A 12k car I flipped for 14k took me 4 months, about 2 more than average.

I have no debt on any credit cards, rent/utilities/food/gas/insurance/phone only come out to 1300 a month and I make 2600 a month so a full paycheck also gets saved. I really would like to buy a house and get renters, but it is seeming like the smartest way is to do 20% down here in CA to keep rates low on mortgage payments and avoid mortgage insurance. I would need around 100k down for houses in my area that would be easy to rent out.

Any tips or ideas are welcomed. The general info I have seen online is Roth Ira, get a nest egg, CDs, ect...but those returns all seem to take a lot longer than what I generally get from flipping cars (around 1k a month in untax income).

Well if you budget is 1300 a month, I would set aside $7,800 (6 months x budget) in a savings account just for your "Emergency Fund." Does your regular employemnt have a 401k/Simple IRA? If so, i would look to start investing money in that. (really good if your employer will match 3% etc. Open a roth IRA now! Even if you just open one via Cap one or something and put $100 dollars in it. You need to start your 5 year waiting period asap.

If you are looking for large fast returns, then investment accounts/ira's/savings are not going to help you out. If you want to buy a home to rent out I would suggest a 20% down. Or you can just use that money you have saved (after you set aside your emergency fund) to keep purchasing and then fixing cars.

Re: Best way to invest 30k

Anonymous — Wed, 25 May 2016 05:32:55 GMT

I was a mechanic for 6 years until I herinated my back at work and went on medical leave. Went through rehab and now I am no longer in daily pain, but I can't work as a mechanic full time anymore. I am able to do an hour or so at a time which is how I have been doing my car work. I either buy ones that need repairs or modified ones and remove the modifications and sell the car off and parts I have removed.

I went to the bank today and they said even with the full 30k down I would only qualify for a 250k place and in my area that is only looking at condos or apartments, neither which work for my current situation since I have a puppy. They need to see at most 50% of my income going to mortgage payments with a co-signer who is not living at the residence, so at my current job that means 1300 at most. I would need to bump up my income to look at any decent houses in my area in the 400-500k range (SoCal isn't cheap!) in order to get renters. My ideal home purchase would be a 3 bedroom while I rent out 2 rooms to cover the mortgage. I am looking into becoming a public notary and making my car "business" an official revenue stream rather than just Craigslist dealings in cash so my reported W2 earnings would qualify me for buying a home. I can also go back into custom computer building and networking that I used to do in college for additional income.

My other assets are 3 other cars and a motorcycle, which if I liqudate at current market value would be around 25k. All of my assets are paid off in my name. I am not totally sure if my job does retirement and it isn't my final job so I am not 100% worried about it right now. My long term plans are to get into medical school and become a doctor. I am only 25 right now so I have some time for retirement. I just feel that investments are more profitable and have a faster turn around than ROTH IRA or savings accounts and that I have more control over them. Having the money sit in the bank and grow interest just seems like a very lazy way to make a profit haha.

I also have a 30k limit credit card as my primary card, 10k personal line of credit, and about 6 other cards 1500-3k limits that I don't really use anymore. Also my credit score as of today was 795. I feel that I am ahead of the curve for the average person my age, but I always hear stories of people who are millionairs by this age and feel like I am undershooting my potential. I can't really figure out what is a smart move at this point of where to invest that would have fairly large returns. Flipping the cars that generate the highest profit and fastest turnaround net around 1500-2000 per car, but if I could figure a way to use the bulk sum of 30k with a 10-20%+ return it would be far more productive in my eyes to do so.

Re: Best way to invest 30k

Anonymous — Wed, 25 May 2016 14:47:13 GMT

I may be wrong but this is likely not the best place to find ideas for quick cash, people here are working on savings and/or credit with a long time horizon.

I know you mentioned your current job isn't your final job, however, I would highly recommend you look into their retirement package. If they have a match start funding your 401k (or similar program) up to that match, it is free money you are leaving on the table. The money you contribute will immediately be vested whilethe employer match may have a vesting period, that is something else you should consider. All vested funds are portable and you can roll into an IRA when you change jobs or go back to school. At your age (I'm 28 myself, started as soon as I was 21 and was eligible) you should definitely be thinking about retirement, with the power of compound interest funds you set aside today will grow nicely if wisely invested. As a poster above said it also pays to start the 5 year countdown on a Roth IRA.

Re: Best way to invest 30k

CreditDunce — Sat, 28 May 2016 04:44:42 GMT

@Anonymous wrote:
I was a mechanic for 6 years until I herinated my back at work and went on medical leave. Went through rehab and now I am no longer in daily pain, but I can't work as a mechanic full time anymore. I am able to do an hour or so at a time which is how I have been doing my car work. I either buy ones that need repairs or modified ones and remove the modifications and sell the car off and parts I have removed.

I went to the bank today and they said even with the full 30k down I would only qualify for a 250k place and in my area that is only looking at condos or apartments, neither which work for my current situation since I have a puppy. They need to see at most 50% of my income going to mortgage payments with a co-signer who is not living at the residence, so at my current job that means 1300 at most. I would need to bump up my income to look at any decent houses in my area in the 400-500k range (SoCal isn't cheap!) in order to get renters. My ideal home purchase would be a 3 bedroom while I rent out 2 rooms to cover the mortgage. I am looking into becoming a public notary and making my car "business" an official revenue stream rather than just Craigslist dealings in cash so my reported W2 earnings would qualify me for buying a home. I can also go back into custom computer building and networking that I used to do in college for additional income.

My other assets are 3 other cars and a motorcycle, which if I liqudate at current market value would be around 25k. All of my assets are paid off in my name. I am not totally sure if my job does retirement and it isn't my final job so I am not 100% worried about it right now. My long term plans are to get into medical school and become a doctor. I am only 25 right now so I have some time for retirement. I just feel that investments are more profitable and have a faster turn around than ROTH IRA or savings accounts and that I have more control over them. Having the money sit in the bank and grow interest just seems like a very lazy way to make a profit haha.

I also have a 30k limit credit card as my primary card, 10k personal line of credit, and about 6 other cards 1500-3k limits that I don't really use anymore. Also my credit score as of today was 795. I feel that I am ahead of the curve for the average person my age, but I always hear stories of people who are millionairs by this age and feel like I am undershooting my potential. I can't really figure out what is a smart move at this point of where to invest that would have fairly large returns. Flipping the cars that generate the highest profit and fastest turnaround net around 1500-2000 per car, but if I could figure a way to use the bulk sum of 30k with a 10-20%+ return it would be far more productive in my eyes to do so.

ROTH IRA's aren't investments. They are tax advantaged accounts that allow you to invest in things tax free. For example, I invest a small portion of my Roth in foreign real estate via a REIT index fund. Stock and real estate will not make you rich overnight, but decades can make you very wealthy. The big advantage of stocks/REIT funds is they earn you money without you having to spend time and energy. Side gigs can earn you extra money, but it can be difficult to scale unless you turn it into a full time business. Investing in a ROTH now when your taxes are low can be an excellent long term investment. For most people, making more than you spend and aggressively investing the extra is the only way to become wealthy. But it is not a quick process.

If you really intend to go into medical school, I wouldn't buy investment properties. Starting with medical school you will need to dedicate all of your time to it. Rental properties need someone to manage them. Medical school is one of the few investments that could earn more long term than the stock market Real estate can earn good returns, but on average it does slightly worse than stocks. Starting a business can make you rich quickly, but it also will likely require all of your time and energy. Even then it can take years to make your business profitable.

Re: Best way to invest 30k

Anonymous — Sun, 29 May 2016 00:51:13 GMT

I would recommend setting up a Barclays or Ally online savings account, they both earn you 1%/1.05%.

I have just over $30k in mine right now earning me over $25 a month and I usually add another $1-2k a month, so it keeps getting bigger.

I just turned it into a healthy habit where I transfer as much as I can on payday so I can budget the rest comfortably.

I also have some stock but I feel I don't have enough time/I am not educated enough to play the market a lot.

The money from this is guaranteed and requires little effort. Perfect for me.

Re: Best way to invest 30k

Anonymous — Fri, 03 Jun 2016 07:30:42 GMT

@Anonymous wrote:
I am wondering if there is a smarter way for me to invest this amount of money. I saved it up by buying and reselling cars and car parts. Generally 2-5k cars and make around 1-3k profit per "flip". Now I am at quite a large amount it feels slow flipping small values like that. More expensive cars take a lot longer to sell too. A 12k car I flipped for 14k took me 4 months, about 2 more than average.

I have no debt on any credit cards, rent/utilities/food/gas/insurance/phone only come out to 1300 a month and I make 2600 a month so a full paycheck also gets saved. I really would like to buy a house and get renters, but it is seeming like the smartest way is to do 20% down here in CA to keep rates low on mortgage payments and avoid mortgage insurance. I would need around 100k down for houses in my area that would be easy to rent out.

Any tips or ideas are welcomed. The general info I have seen online is Roth Ira, get a nest egg, CDs, ect...but those returns all seem to take a lot longer than what I generally get from flipping cars (around 1k a month in untax income).

20% down is 100k so assuming ur saying house cost 500k so loan is for 400k with ur income u won't get loan.. DTI is too high. U will be paying close to 2000/month for loan payment

Re: Best way to invest 30k

Anonymous — Thu, 07 Jul 2016 04:35:09 GMT

Well I have 45k now after some more car sales. It does get good return, but gets stressful after awhile doing so. I was wondering if it might be benefitial to buy a cheap house as a rental like a manufactured place. Around me manufactured homes sell for around 60-80k. I could get a loan on it and rent it out, with 20% down I would only be looking around a 500 dollar payment. Not exactly a place I would personally want to live at, but seems to be a good return. Also in talks with my realitor about possibly buying a flip property, new loans allow 90% est final sell value on fix-up or auction properties with the intent to sell them once upgraded. I have just never gone those routes before and it is all new to me. I feel a savings account would be too slow of a return even at 25$ a month. The tedieous process of car flipping yields around 1000-1500 a month right now. If I were to invest in something I would hope to acheive similar returns.

Re: Best way to invest 30k

Anonymous — Sat, 09 Jul 2016 18:07:07 GMT

Have you considered property farther from where you live? Or even relocating? I grew up in the Bay Area, my in-laws live in Santa Clarita. Property is crazy in Cali.

Moved up to WA state a couple years ago. Just closed on a two story, 4 bed house on 5 acres for $139k. In Napa county, it'd be a couple million $$$ property.

Another benefit of WA are the taxes/laws for vehicles. Two pickups and a car cost less to register each year in WA then ONE of my pickups in CA. My F250 cost approx. $250 a year in CA. Just renewed last night here: All three, plus a Discover pass for national forest access came out to $186. And there's no smog!

Re: Best way to invest 30k

Anonymous — Sat, 09 Jul 2016 18:12:57 GMT

Yes I know how crazy expensive CA is with everything and I wouldn't really mind relocating to another state, but have no idea where to start. Throw a dart at a map and move there? Not sure if I should find a job, then find a house. Or find a house then find a job. Not sure about buying an investment place out of state in terms of managing it. I would ideally love to get out of paying someone else's mortgage since I am only renting a room right now. I can totally see myself having investment property after I get my first live in place, but right now trying to make moving out of renting a room my priority.

Re: Best way to invest 30k

Anonymous — Tue, 12 Jul 2016 10:20:51 GMT

@Anonymous wrote:
Yes I know how crazy expensive CA is with everything and I wouldn't really mind relocating to another state, but have no idea where to start. Throw a dart at a map and move there? Not sure if I should find a job, then find a house. Or find a house then find a job. Not sure about buying an investment place out of state in terms of managing it. I would ideally love to get out of paying someone else's mortgage since I am only renting a room right now. I can totally see myself having investment property after I get my first live in place, but right now trying to make moving out of renting a room my priority.

The answer to that is easy. Move where you vacation or would vacation. If there isn't a place you love, take a trip around to 10 cities you think you'd like, then move to the one that pulls you in, you'll know when you get there it will hit you like a ton of bricks. Ask yourself what priorities matter in a place to live? Weather, people, cities, land, ocean, mountain, upbeat, laidback, etc, etc.

Re: Best way to invest 30k

Anonymous — Sat, 16 Jul 2016 07:47:26 GMT

@Anonymous wrote:
Well I have 45k now after some more car sales. It does get good return, but gets stressful after awhile doing so. I was wondering if it might be benefitial to buy a cheap house as a rental like a manufactured place. Around me manufactured homes sell for around 60-80k. I could get a loan on it and rent it out, with 20% down I would only be looking around a 500 dollar payment. Not exactly a place I would personally want to live at, but seems to be a good return. Also in talks with my realitor about possibly buying a flip property, new loans allow 90% est final sell value on fix-up or auction properties with the intent to sell them once upgraded. I have just never gone those routes before and it is all new to me. I feel a savings account would be too slow of a return even at 25$ a month. The tedieous process of car flipping yields around 1000-1500 a month right now. If I were to invest in something I would hope to acheive similar returns.

Mobile home isn't a good investment. Yes u said its 60-80k for say home. So let say u put 20k down loan 60k and u rent it out. U still need to remember u need to pay for cost of rent space and can vary from 500-1500 depending on where. So with that and loan payment the rent might not cover or barely covers it. Auction properties require 100% cash or u do hard money lending which is generally 10-12% interest and interest only payment. Which isn't good unless u remodel and flip and sell within 6 months.

Re: Best way to invest 30k

Anonymous — Sat, 16 Jul 2016 07:53:16 GMT

@Anonymous wrote:
Yes I know how crazy expensive CA is with everything and I wouldn't really mind relocating to another state, but have no idea where to start. Throw a dart at a map and move there? Not sure if I should find a job, then find a house. Or find a house then find a job. Not sure about buying an investment place out of state in terms of managing it. I would ideally love to get out of paying someone else's mortgage since I am only renting a room right now. I can totally see myself having investment property after I get my first live in place, but right now trying to make moving out of renting a room my priority.

Good luck trying to buy a house without last 2 years of tax return and last 2 months of paycheck stub. If u really wanna do real estate investment. U gotta know if u wanna do flip or long term investment. Flip u buy fixer and remodel and sell. Long term I would recommend buying 4 Plex and rent it out. Not sure which part of California ur in but Oakland California 4 Plex is pretty good. Elk Grove and Sacramento properties going up but still affordable. San Jose housing pricing is extremely expensive everything is 500k+