# Anybody have good financial advice?



## sudsy9977 (Jun 10, 2015)

Ok so I'm gonna go see a financial planner but I'd like to get some of your opinions if anybody knows anything....I have a stack of money I'd like to put into some kind of investment that will earn me more than just in the bank....it has to be safe...no risky stock market gambling....and the soonest I would need to use th money would be like 2 or 3 years.....maybe more but I might have to pull it out in 2-3.....it would be about 30,000 dollars....anybody have any ideas....ryan


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## tcmx3 (Jun 10, 2015)

Well sounds like mutual fund, US gov Bonds, Patek Phillip Calatrava all have upside (Id go with the Patek)

But for any amount of money that is a serious investment I would advise against taking the advice of people whose backgrounds you cannot verify, well-intentioned/informed or not, so I think that's your win condition as you have correctly identified.


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## The Edge (Jun 10, 2015)

Stocks are going to give you the biggest return most likely. The best advice I've heard on the subject, is to invest in what you know. If you're doing stocks, invest in a company that you buy from or use. In doing so, you'll be a first hand witness if their company starts to go downhill, and you can pull your money out. Good luck in whichever direction you choose to go!


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## chiffonodd (Jun 10, 2015)

redisburning said:


> Well sounds like mutual fund, US gov Bonds, Patek Phillip Calatrava all have upside (Id go with the Patek)
> 
> But for any amount of money that is a serious investment I would advise against taking the advice of people whose backgrounds you cannot verify, well-intentioned/informed or not, so I think that's your win condition as you have correctly identified.



+1 across the board. Mutual funds, CODs, and gov't bonds are safest but have low returns. You can see current rates here:

https://www.edwardjones.com/en_US/market/rates/current_rates/index.html

End of the day, listen to your financial planner 

Or invest in high end knives! :whistling:


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## larrybard (Jun 10, 2015)

DO NOT invest in stocks. Your investment horizon (possibly as short as 2 years from now) is much too short. You've probably heard it before, but there is a general, well-established relationship between risk and return when it comes to securities (whether equities or fixed income). Meaning, you can't expect significant returns without significant risk, at least in the short-term.

So if you really might need to use the money as soon as two years from now, I don't think stocks should be considered. (And I'd go so far as to say that if you consulted an adviser who suggested putting the money into stocks (probably through one or more mutual funds, or ETFs, run away.) Unfortunately, there are also very, very few knowledgeable investors who would put their money into fixed income securities (bonds, etc.), directly or indirectly (e.g., through a fixed income mutual fund), because of the significant risk that interest rates will go up over the next few years. And if you try to limit that risk by using shorter durations (basically, maturities -- but it's a bit more complicated than that) . . . well, look at what money market funds (or savings accounts) are now paying; almost nothing.

So consider something like an unglamorous bank CD (with a maturity not inconsistent with your investment horizon).

One last piece of advice: if you do seek out an investment adviser -- a real adviser, not a broker or insurance salesman who says they're a financial planner or adviser -- most are likely to suggest you invest in a mutual fund with a "12b-1" fee to their firm. Forget about it. The most ethical advisers, in my opinion, are fee-based planners, i.e., they will likely want to charge an hourly fee. If they're willing to spend time with you at all, given the relatively modest amount you're seeking to invest.

Feel free to get in touch with me via PM. (I am not an investment adviser, and am certainly not seeking to get any sort of financial planning engagement for any fee.)


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## sachem allison (Jun 10, 2015)

just got federal approval on my whiskey recipe, on the label and the bottles.need cash for first production run. you could loan it to me! lol! I need a vacation


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## gic (Jun 10, 2015)

In my opinion the best balance of safety and yield now for a 2018 maturity is: http://guggenheiminvestments.com/products/etf/bsji. Unlike investing in a traditional bond fund, these kinds of funds end on the specified date so you have (only subject to any investment risk in non government bonds) a very very high likelyhood of getting all your money back with the given interest rate. I use these bullet shares for this reason.

Still, since interest rates seem to be moving higher, an even safer solution is to put your money in a very high yield fdic money market fund (best ones currently pay around 1%) and wait until the fed acts before buying the fund I mentioned in the first paragraph at the end of the year.

With this short a time horizon I echo larrybard, stocks would be crazy


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## oldcookie (Jun 11, 2015)

Yeah 2-3 yrs is way too short for stocks, of funds that are based on equity. Also, valuation is high for the market now.

Bonds yields has been rising recently due to changing expectations of inflation and actions from EU and Fed, which increases the likelihood of rate increases. (When bond yield rises, you lose your capital because the price of the bond drops.) With these things though, no one knows the future, so might be a good short term opportunity to buy, or might be a really bad time to buy.

Right now, REITS might be attractive. REITS hasn't done well this year because signs of weakness in the US economy, which is a good thing cause you get higher yield. REITS generally do well during rate increases, so that's another plus. So I would consider REITS ETF/funds.

But in the end, it really depends on you. You need to know what your risk tolerance is, and invest in things you understand.


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## daveb (Jun 11, 2015)

Buy High. Sell Low. How come my adviser drives a Beamer and I've got an old Toyota?


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## Adrian (Jun 11, 2015)

My day job (when I am not playing at restaurants) is running a financial services business in Europe. We employ a lot of advisers. This is free advice: $30,000 is indeed a large pile of cash. In investment terms it is unfortunately very small. You want a high yield and low risk. Everyone does - but you will not find this. 

You will only get good, independent advice if you pay for it. There is no point in you doing this, because it will eat so significantly into your hoped for return, that you will not get value in the end. 

Think of it this way, at present you may get 1% or 2% on a deposit of some kind. So that is a yield of maximum $1300 or so compound over 2 years. If you did really well and found something yielding 5% per annum (for example some sort of structured note whose yield tracks an index) you would be in the $3,200 area, but this would mean accepting some risk. So in a low risk environment your financial adviser (and I agree that professionals should charge you by the hour and take some time finding out about your circumstances) has upside of maybe $1,900 to play with which has to pay his fees (which can easily work out at over 2%) and leave you with a bit of extra gain. Most good financial advisers are not interested in clients who are very risk averse and have only small sums to invest for a short period (anything under 5 or 6 years is short). 

In your shoes, with this sum I would skip the adviser and go for a simple and safe capital protected product. The advice to use Certificates of Deposit (CDs) above was sound if you are risk averse and need liquidity. 2 year CD rates are around 1.2%. If you have a mortgage pay that down first before making savings as the interest rate you pay on your mortgage is very likely higher than the yield you can get from savings. Remember that inflation also eats away at the spending power of your money, so if the $30,000 is earmarked for a project, maybe bring that forward.


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## sudsy9977 (Jun 11, 2015)

Wow lots of smart advice hear.....gotta decide what to do next I guess....I'm gonna check out the person my wife wanted to go to and see how they charge....ryan


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## TheDispossessed (Jun 11, 2015)

wait, you're asking for financial counsel from people who spend thousands of dollars on kitchen knives and natural whetstones?


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## sudsy9977 (Jun 11, 2015)

Here's more of a backstory.....we might wanna buy a new house in a few years....we can't afford it right now but this would be part of the money used for a down payment......we figured, why not do something with it for a few years and make a little more than just sitting in the bank....ryan


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## Roger (Jun 11, 2015)

You might want to search and watch this

TTC - Understanding Investments

(It's quality content from The Teaching Company)

One advice from me : diversify. You never want to put all your eggs in the same basket.


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## larrybard (Jun 11, 2015)

Based on the likelihood that you'd use the money for a down payment on a house, I still wouldn't change my prior advice, but in light of that ultimate objective following oldcookie's suggestion of investing in a REIT wouldn't be as risky as I previously thought -- because it could act as a hedge of sorts against real estate prices increasing while you were on the sidelines waiting to jump in. (Of course it might also mean that the value of your investment would likely diminish if real estate values generally decreased -- but then you would hope that you wouldn't need as much for your down payment.) If you actually considered this alternative, you'd have to work hard to find a REIT -- typically with underlying commercial properties -- that would have some significant correlation with residential property values in the market you're considering.


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## USC 2012 (Jun 12, 2015)

Don't forget to consider your tax consequences! PS hope you don't have the cash physically as this is illegal. The IRS will take you money when you deposit it to a bank account( even if you deposit over a few transaction)


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## Adrian (Jun 12, 2015)

Interesting response from larrybard. In many markets commercial property correlates poorly against residential prices as the supply and demand dynamics can be greatly different among other things. I would be interested to know if that is true of the US. 

We live in an area of the UK where young people really struggle to get on the property ladder because house price inflation, especially in London, is well in excess of salary growth for many. 

Ryan - if you are renting now (a saving to be had) and have a decent deposit (which it seems you do) and a steady income, maybe buying a house with a mortgage is more viable than you think. Maybe talk to a mortgage broker?


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## labor of love (Jun 12, 2015)

Invest in some Kramers and flip them on Ebay in a couple of years. This seems to work for a lot of people.


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## oldcookie (Jun 12, 2015)

@Adrian There are many different kinds of REITS, residential, commercial, hospitals, prisons, etc. In general, they don't correlate with residential prices, because they are effectively rent collecting vehicles. So commercial and residential REITS are sensitive to the economy but in different ways, hospitals and prison REITS are sensitive to policy changes, and so on. They are all sensitive to bond yields and interest rates since they are high yield investments. In booming communities, there's likely a correlation, because demand increase for these rentals and rental income increase, therefore yield increases.

There are risks for sure, and not sure if it is for sudsy9977, especially base on info available. It's something that I've been looking at recently that seems to have some opportunities in the current market. So take it with a huge grain of salt.


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## sudsy9977 (Jun 12, 2015)

Im getting more and more confused after each post Lol ryan


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## larrybard (Jun 12, 2015)

USC 2012 said:


> . . . . PS hope you don't have the cash physically as this is illegal. The IRS will take you money when you deposit it to a bank account( even if you deposit over a few transaction)



With all respect, this isn't true at all. Neither the possession of cash -- you're probably thinking of situations involving $10,000 or more -- nor depositing it in a bank, even if $30,000 in a single transaction, is per se illegal, nor subject to confiscation. The requirement is that the bank -- not you -- file a specific form to report the cash transaction. The same is true if the total deposit is "structured" so that it is broken into several deposits, each less than the $10,000 reporting threshold.


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## boomchakabowwow (Jun 12, 2015)

save more, spend less.


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## Dave Martell (Jun 12, 2015)

Get out of Federal Reserve Notes while you still can.


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## boomchakabowwow (Jun 12, 2015)

all the financial security/independence in the world wont mean squat if you're sick. 

retirement is also about going in as healthy as possible. tomorrow, i am trying my first 8 mile mountain run..i'll probably die wheezing..haha..but i'm investing in my future health.


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## Mrmnms (Jun 13, 2015)

USC 2012 said:


> Don't forget to consider your tax consequences! PS hope you don't have the cash physically as this is illegal. The IRS will take you money when you deposit it to a bank account( even if you deposit over a few transaction)



There is nothing illegal about having large sums of cash. There are reporting requirements when transacting with sums over $10,000 or traveling abroad. The irs looks for patterns of conduct for possibe money laundering. The irs will not seize your cash simply for having it. If you deposit smaller sums trying to avoid the 10,000 reporting requiring, it may be construed as suspicious unless done over an extended time period .


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