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I know... I know... Not a huge amount by any means but I need to keep as much of my savings available as I have about 5-7k in expenses coming up in the next couple of months. Just wondering what everyone would do if the had an extra G laying around right now.
I have no debt except my truck which is financed at 0% so no reason to pay any more than necessary on it.
If you are going to need that cash in the near future dont invest it. I have stopped all stock investing. I have now moved on to real estate investing. $5k dollars would me a long time to earn an additional $5k in the stock market. Instead I took $5k and bought a duplex. That $5k out of pocket now makes me $453 a month after expenses are paid. Not bad at all. That aint gonna happen in a savings account.
Sorry I was trying to say that after my spend is over I should have 1k left over to play with for the next couple of months. Was your 5k the down payment on the duplex?
Here's what I would do.
1. If you can take some risk, I'd look for some ETFs in the following sectors. Commodities driven, currency contra to the US dollar, and asset classes that rise with inflation (such as TIPs, or something along those lines).
2. Conservative - floating rate exchange funds. Currently, I have no faith in fixed in come. My recommendation, stay away.
3. Moderate risk - S&P 500 index, with some allocation in some smaller Asian markets (again, isolate those sectors that will benefit with potential US currency credit erosion and inflationary pressure).
Best of luck! I like your thinking. Instead of leaving it in the bank or buying something, instead try to buy more future dollars.
@ryanbush wrote:Sorry I was trying to say that after my spend is over I should have 1k left over to play with for the next couple of months. Was your 5k the down payment on the duplex?
Yeah. Theres lots of ways to do it. A lot of people dont agree with me but I think of mutual funds like this: You diversify and dont put all your eggs in one basket. Great. so you put a third in this type and a third in another and a third in another. Diversity!! Well you do that becase you can expect one to mabe make some money and some might make nothing or just a little and one might lose. Where does that leave you? even. Well at least you have your money right? sure but in future your money will be worth less. It will buy less and you will need more. Saving is losing. You might have a milion dollars in 2030 but how much is that worth? It might be worth nothing. With real estate you can always raise the rent to match the market rates and when you sell, the values are usually higher. And thats only because the money to buy is worth less, not because your property just somehow became better.
I find peer to peer lending kinda fun. A grand will go a good ways.
It is also a good learning tool. You see what credit profiles tend to create more defaults.
Currently, I am earning just over 17% using prosper.com but I do not count on earning any returns at all. It was just enjoy browsing through all the loans ect. The return is a nice bonus, but I don't think the 17% is stable. I figure it will more likely be about 8%. I would also recommend lending club over prosper. They just seem more secure as a business. I like the prosper website better though.
Last week I made a small investment on precious metals because I predicted a spike. I earned $100 from that, but I have no idea where things are headed now. I have pulled out those funds already.
I think my plan for next week is just some sort of bond based income fund.
I have some silver that I am holding for the long term. That might be something to do with the grand. You could buying some silver from a pawn shop. Again, no idea were the market is going but over the long haul. Most likely up. Something like this: http://www.ebay.com/itm/42-80-FACE-90-SILVER-BARBER-DIMES-428-COINS-LARGE-ESTATE-GROUP-/290878133859... would be cool. Although, those are low grade coins worth around $850 if they are real, they will bring more than that on ebay.
@Dustink wrote:I find peer to peer lending kinda fun. A grand will go a good ways.
IMO, skip that. I played with exactly $1000 a couple of years ago via LC. I invested $100 per note for 10 notes and reivested $200 more in $25 increments as they repaid the debts. I diversified it mostly in A & B graded borrowers at 60% or so (high FICO, low debt, no baddies) and probably invested 40% in C-F grade borrowers. While some of my C-F borrowers were late from time to time, 3 of my A+B borrowers with the high scores were late 90+ with two of the three defaulting. Thankfully one of them paid off the debt at a later date but I suspect there's a lot of piggybacking and other unethical means to artifically raise the score.
@llecs wrote:
@Dustink wrote:I find peer to peer lending kinda fun. A grand will go a good ways.
IMO, skip that. I played with exactly $1000 a couple of years ago via LC. I invested $100 per note for 10 notes and reivested $200 more in $25 increments as they repaid the debts. I diversified it mostly in A & B graded borrowers at 60% or so (high FICO, low debt, no baddies) and probably invested 40% in C-F grade borrowers. While some of my C-F borrowers were late from time to time, 3 of my A+B borrowers with the high scores were late 90+ with two of the three defaulting. Thankfully one of them paid off the debt at a later date but I suspect there's a lot of piggybacking and other unethical means to artifically raise the score.
I think the way to go is stick to $25 per loan and make sure the rate justifies the risk. $1000 with $25 per loan would create some decent diversification. Focus on middle risk loans, they generally are a good "value."
This is me:
http://www.ericscc.com/lenders/Bad_Debt
I learned as I went. If I could do it over, I would get fewer HR loans and more "C" loans. I would also buy fewer loans that had any past baddies on their reports. I also see good value in 5 year loans vs 3 year loans. The 5 years pay out a lot more interest. The lower payments are easier on the borrower, but the longer term brings more inherent risk.
I just bet on 20 shares of NASDAQ:TSLA.