A money market account is safe and leaves your liquid assets in a state where you can get them easily. The downside is a poor rate of return.
Tax-exempt bonds (local, state or federal) are an attractive option provided that the rate of inflation doesn't exceed your rate of return or reduce it to effectively nil.
Another sensible option would be to pay off any debts you have. Your income is your best way to grow wealth, and every dollar you pay in interest is a dollar taken away from your future earnings. Even though this isn't as exciting an option as putting your money in the stock market, this might be your best bet longer-term.
If you have no debt, then the $50k would go a long way towards a down payment on a home - that way you can stop paying rent, which is another source of wasted earnings.
In other markets, home ownership and all its associated costs (including property taxes and maintenance) is more expensive in both the long and short term than renting.
For instance, for what I pay in rent in NYC (PLUS a down payment), I would have to commute at least 3 times as long to afford to buy an equivalent home. And also have to add the responsibility (in time and expense) for maintenance - from upgrading the plumbing to shoveling snow from the sidewalk.) Further, it'd be much more difficult to see friends, whom I'd no longer live near. That's all time that could instead be spent with friends and family, being healthier, or even making money on a side project or freelancing.
And if you get poor terms on your mortgage (think variable rate loans), you're just setting yourself up for pain.
Not true, and it's often opposite where higher risk means a higher overall worse performance. You can also do more homework than others, and/or have more patience than others.
http://webfund6.financialexpress.net/clientsv21/scottishwido...
I went in knowing nothing, and wouldn't have done it if my bank hadn't pushed me in that direction (the department of the bank no longer exists) and I guess I got lucky, as it has worked out well for me.
PLEASE NOTE: investment ISAs/Personal Investment Plans with Scottish Widows can go up and down. Also bear in mind I an openly saying I know next to nothing about this, so please don't jump into anything without researching it carefully.
There's no way for you to reliably make even 20k in the next year off of an investment of 50k unless you are going to be personally involved in it. You will also almost certainly make at least 20k at your job in the next year, and can probably figure out a way to increase your salary by 20k.
Long term assets could be something to be evaluated. solar energy, home refurbishing, ... https://www.forbes.com/sites/laurashin/2016/06/02/4-reasons-...
But no one knows when the time comes for it to pop.
But on the other side. Let's say you invest now. In three years the bubble pops. In five you should be way above on what you have invested. Say around 20% plus in eight years.
There was also a popular article(NYT?), which I can't find the link to at the moment, that showed me that only if you invest in the market for around 30 years or more, can you get a decent return. To me that makes sense if you want to leave your kids a little something after you're gone but not for your own lifetime.
Can someone educate me on this? Does everyone reply "index funds" because it is fashionable to do so or am I missing something here?
Bitcoin as an "investment" is a lot more volatile than most other options. But, as of now, also a lot more profitable.
If you're after no effort at all, then investment is probably the best advise you would get. But that does carry some risk. As always, the risk/reward ratio...
