How do i invest half a million?

Question

so. i need financial advice.

home is fully paid off. 400 thousand.

business is fully paid off 400 thousand.

selling the business for 500 thousand.

where can i put my money. how do i invest. where do i invest. when to invest.

how could i make my money make more money.

CD's? what do i do with half million.

no jokes please. only serious intelligent, rational, logical answers.

Answer 1

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Answer 2

My grandma invested in CD's at numerous different banks, she lived off the interest.

Answer 3

If you have no investment experience, consider searching for an experienced full service broker at a major firm like Merril Lynch, Morgan Stanley, etc.  Ask people you know who they use.  Tell the prospective advisor that you want a fee based account, wherein you pay a perentage of the account rather than commissions.  That way the advisor is not paid by turn over, and instead is paid for good management.  The better you do, the better he/she will do.  You should be able to find 1% as your annual fee on your 500,000.  Fidelity and  Vanguard also offer fee based and sometimes free advising using their inexpensive funds as investments.  Call them.    Any one offering advice first needs to know more about you and your needs, tax picture, risk tolerance, etc. and should ask you lots of related questions before offering advice.

Answer 4

Buy gold, lots of gold.  This is the only thing that will protect your money from inflation.  

USA and many other countries now have negative interest rates relative to inflation.  Which means that the interest you get on your money is less than the inflation rate.  And over time your losses due to inflation may become rather large.

Answer 5

If you want to start investing in the stock market try looking at companies like Investools (www.investools.com) they are an investment education company and have practice formats that allow you to make purchases with play money before investing the real stuff.

Then hook up with an online broker like options express

Hope this helps

Big G

Answer 6

I think you can mortage your home for the down payment of 3 properties in different areas with 15 year mortages. Rent them out. Use the money to fund the payments on all 4 properties.  Now you have three choices.  Sell the property when you have no tenants and the price goes up, take the rent money or when you pay off the mortages use the credit as income.  You can hire businesses to do all the landlord stuff for a percentage of the rent and you just collect the money.

Answer 7

Let's see suppose you figure on something over 12 months, for easy figuring, keep the change in the bank and target on 480k so it was an easy 40k a month.

Park the balance in some CDs of diverse maturity over the year, so it is safely making interest when not put to direct work.

The 06/08/08 BusinessWeek gives their top 50 "hot growth" companies list. I've ferreted out some of what I think are the strongest of the bunch, so the month's money divide it among these: STRA, KWK, FSTR, PCLN, CALM, ISRG, SNHY, and/or ULTI.

Each stock will rise and fall over the year, but this way you have cost/averaging to minimize the acquisition costs over the year (you buy fewer shares when they are expensive, but many more when they are cheap). There are some ways to further maximize this, but I think I've given enough for 2 to 10 points. Good luck.

Answer 8

CDs are in my opinion a loosing proposition. Taxes, inflation, and the easy money fed policy yield a negative 3 to 5% return.  Not too appetizing.  

The big question that remains open, is how much do you need to generate in income to live?  I can imagine the property taxes on a 400k home are something frightful.  What 8k a year?

About the most income that can be generated from 500k is about 30k if there are no hiccups along the way.  But that does not allow for much capital appreciation.  

One fairly reasonable source of income with some capital appreciation built in is pipeline LPs.  A couple that pay dividends of better than 6% (fully taxible) are ETP,  PAA, SXL.  There are others besides these 3.   60k maybe in those 3.

I am a fan of CHK for capital appreciation.  A very large producer of natural gas with huge reserves.  50k maybe there.

I am also a fan of China and Chinese stocks are trading at much better prices than they have been in sometime.  There are many funds that you can buy to invest in China.  CHN, TDF,  CAF, PGJ,  and many others.  About 50k there.  What you are hoping for here is capital appreciation.  

You need to keep about 50k in a money market fund.  Take your pick.

Small cap stocks offer capital appreciation and diversification.  50k in PENNX.

50k in either SPY or RSP.  I personally prefer RSP since it is not cap weighted.

50k in EFA a developed foreign index fund.

There are preferred stocks that pay better than 6% dividends that are tax advantaged but there is zero capital appreciation associated with them.  

RNP currently distributes about 11% dividend.  JPF about 9%.  50k in this type of investment would yield about 5k annually in income, about 3x a CD and tax advantaged too.

CAT, DE, LECO, TKR, IBM and other big exporters should do well as the $ becomes worthless. Place the rest of your bets on 10 of those type companies.

Answer 9

Avoid financial advisors like the plague.

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1. What are your financial goals for the future? Do you plan to use some of that money in the next couple years to start a new business? Do you want to retire now and live off that money?

http://news.morningstar.com/articlenet/a...

2. Take risk tolerance quizzes and figure out what your asset allocation should be.

https://personal.vanguard.com/us/FundsIn...

http://moneycentral.msn.com/investor/cal...

3. Set up a low-cost, diversified portfolio based on your risk tolerance.

4. Stay the course.