What would you do with 50k

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Submitted by rubbieslippers on May 8, 2008 - 1:24am

I have been lurking here for a while and love the site. I have just come into about 50k, and don't have any ideas on how to, or where to put it. I am aware you are all strangers but was thinking this is as good a place as any to get some ideas. I have always wanted to work for myself,(maybe a small deli cafe or coffee shop) A but 50k is not alot to get started in business. Besides plastic surgery, I haven't a clue.

I am happily renting until prices fall enough to buy. I have a small down payment, and plan to buy when FHA is fashonable again. I don't want to put it on a home.

Submitted by moneymaker on May 8, 2008 - 3:33am.

I would not spend any of it on plastic surgery. We all age, just accept it and love yourself the way you are. I know it is a highly personal decision, everybody in my family except me has had it. I am so grateful that my wife is of the same mind, when I think about it she has a lot of great characteristics that compliment me. OK, so what to do, good question I had some money in a money market account but that doesn't pay much anymore. I would suggest just hang onto it.

Submitted by La Jolla Renter on May 8, 2008 - 7:40am.

To answer this question correctly, we would have to know more. Age, are you on track with retirement already, other savings, other big expenses coming up, etc?

This is not the greatest time to buy or start a small business, but if you are serious, I would contact SCORE and attend a couple of work shops. As far as a business goes, you could buy a business for 150k with a SBA loan putting 30% down. A small business of this size with a good track record would net about 75k a year. If your making substantially less, this could be an option.

Without other data or details, I would suggest reading a suzy orman or dave ramsey book asap.

Submitted by nostradamus on May 8, 2008 - 7:51am.

$50k is more than enough to start a small business.

I didn't have a good experience with SCORE. The dude basically told me it wouldn't work and I would amount to nothing. He was old and jaded and I was young. He was wrong, I've come far.

Viddy this: buy a high-end camera, some lights, and some background muslins... POOF you've got a photography business for $10k.

There are people who sell T-shirts to tourists at La Jolla Cove who make over $100k net. All it takes is blank shirts, a silkscreen, and some creativity.

Travel to some unusual, far-away place. Take photos and write a book about it. Poof! You're a travel writer.

Submitted by kewp on May 8, 2008 - 8:01am.

Buy gold coins and bury them in the garden.

Submitted by capeman on May 8, 2008 - 8:11am.

Make a 50k deposit in the bank of Sealy.

Submitted by Coronita on May 8, 2008 - 8:12am.

Nostra,

You're my hero.

Ok, ass kissing aside. Mind if you share what exactly your business does? I think you're in the tech sector, and if I recall you talk a lot about embedded stuff. Are you a consulting company or on the product side.

I'm just wanted to pick you mind a bit, namely because I'm trying to get started myself with a tech venture, and I'm trying really hard to resist the venture caps. Except things are starting to add up, and i really don't want to be digging into my own pockets deeply myself.

 

selfportrait

----- Sour grapes for everyone!

Submitted by FormerSanDiegan on May 8, 2008 - 8:25am.

I didn't have a good experience with SCORE. The dude basically told me it wouldn't work and I would amount to nothing. He was old and jaded and I was young. He was wrong, I've come far.

Sounds like your experience with SCORE actually was effective. It motivated you to say to yourself that the old fuddy-duddy was wrong and you were right. You'll show them. Sometimes "rejection" is all the motivation one needs.

As for the 50K. That depends. For some people, that is not even enough for their emergency fund. For others, it's 3x too much. First: Take 6 months of your living expenses out of that 50K and put it in a high-yield savings account ("high" is a relative term), such as ING Direct or similar. If you already have an emergency fund, that's great.
Then, put what's left in a separate high-yiled savings account and based on what's left start making decisions.

Are your retirement funds fully maxed out ? Have you contributed to a Roth IRA ? (too late for 2007). Do you have any outstanding bills? Pay them down in order of max interest rate *highest first). This is typically: Credit cards, unsecured lines of credit, car loans, student loans.

AFter that see what's left ?

Oops: Do you have to pay taxes on the 50K ? If so take the taxes out and go back to the top of my response and start over.

After these things, how much is left ?

Whatever's left is suitable for investment in stocks, gold, inverse funds, bonds, starting a business, touring the rainforest, etc.

Submitted by rubbieslippers on May 8, 2008 - 10:32am.

Thanks for the info FSD AND all I'll keep ALL THat in mind

Submitted by nostradamus on May 8, 2008 - 1:57pm.

Hi FLU,

Thanks! Sorry, I just saw your post.

I know what you mean about not wanting VC's. Angel investors are much better! I quite easily raised $1M to start up a small company in 1998, but didn't end up taking the money because the Japanese economy (where I was starting the company) took a downturn and I wanted to sit it out. I know of a company that has had multiple $25M rounds of investment cash from a single, super-wealthy Kuwaiti oil prince.

I'm my own consulting company and have been since y2k. I do ASIC deisgn, mostly for wireless. Last year I started a movie production company on the side.

Submitted by LarryTheRenter on May 8, 2008 - 5:16pm.

maybe some SDSU frat boys can take that 50K and invest in the pharmaceutical business and give you a nice return on your money.......

Submitted by sdduuuude on May 8, 2008 - 10:25pm.

http://www.pcasd.com/

Ask for Rich.

Submitted by NotCranky on May 8, 2008 - 10:41pm.

No offense to Rich of course, or to the person with the 50K, or to sdduuuuude, but is that amount of money worth going to a financial advisor over? Does a financial advisor want to see someone with that amount and no other assets to talk about?Maybe I missed it and the OP said they have other investment concerns?

If I was about to buy a place in the next few years,which seems like perfect timing, I would use the 50k to try to slide into two or three lower priced places over a few years and become a landlord.

Submitted by rubbieslippers on May 8, 2008 - 11:54pm.

to put it down on a few properties I would have to qualify for a few loans, wouldn't I? I have no desire to be a landlord, what if the renters don't pay? then I have to cover that loss, too complicated. I have thought about going to a financial advisor, I probably will.

Submitted by poorgradstudent on May 9, 2008 - 12:21am.

I've read that the United States is littered with bars and restraunts that were opened by lottery winners who had no idea how to manage a bar or restraunt. I imagine similar rules apply to deli or coffee shop ownership. If you've worked in one (or ideally managed) that's one thing, but starting cold is overly risky unless you have a lot of time and energy to invest in learning the ropes.

If I came into 50k right now I'd stash it in a money market account and wait for a bottom to use it as a down payment. However, I'm currently renting and a long way from retiring. If I was closer to retiring, it would go into the retirement account.

Submitted by La Jolla Renter on May 9, 2008 - 7:15am.

rubbieslippers,

If the thought of being a landlord is too complicated, then scratch the idea of owning and running a business. I have both, and can definitely say being a landlord is by far the easiest.

We still do not have enough personal info to give you advice. I am not big on going to a financial planner with 50k but sometimes they can lock the money up and force you to be disciplined. Just putting it in a CD is probably too tempting for the average person.

Submitted by rubbieslippers on May 9, 2008 - 7:39am.

My parents had a video store when I was a kid, I helped run. My husbands parents had a deli he ran. I am 38 I have some money for retirement.

Submitted by cindy on May 9, 2008 - 8:44am.

personally i would either keep it at ING Direct or something similar and wait for a good time to buy some cheap real estate, or if you don't want to go that route and don't need the cash for anything soon, consider dollar cost averaging in to the CGM Focus fund, the best mutual fund out there in my opinion (if you can stand wild swings in your account balance). the manager, ken heebner, is a stud and made 80% return last year. of course that isn't expected to be repeated, but he is still up an annualized 37.5% for the last 5 years.

Submitted by cindy on May 9, 2008 - 8:45am.

sorry dup. post

Submitted by Diego Mamani on May 9, 2008 - 11:51am.

Poorgradstudent wrote: "I'm currently renting and a long way from retiring. If I was closer to retiring, it would go into the retirement account."

That reasoning is backwards!! The longer time you have until retirement, the most sense it makes to put money into a retirement account that invests in equity mutual funds! If you're close to retirement, then just put the money in ING Direct or in bond/fixed income mutual funds.

Submitted by Diego Mamani on May 9, 2008 - 11:54am.

Rubbie: It looks like you and your family have a lot of experience running small businesses. Maybe that's the way for you to go; as someone said above, get an SBA loan and open a deli, or sandwich place.

But be aware that you'll work long hours, have some stress, and still won't earn more than what an engineer with a couple of years of experience makes. But at least you'll be your own boss.

Submitted by moneymaker on May 9, 2008 - 12:30pm.

Ok, all good advice. But i stick by my advice to sit on the money for now. It's like winning the lottery on a smaller scale of course. Pro's advise the winners to not make any major decisions for like 6 months or so. I have seen too many empty store fronts to recommend going into the restaurant/deli business. Unless highly motivated with a lot of emotional investment do not start a business now. AS far as the stock market, I think now that the fed isn't going to do any more lowering, the market will fall. Gold will rise accordingly, but it will take a few years. 6 months from now the direction of the economy will be more clear.

Submitted by rubbieslippers on May 9, 2008 - 12:56pm.

Thanks for all the advice. I have thought of investing and business and all and cannot decide. Keep your comments coming. Thanks again.

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