Where would you invest 20k dollars now?

[Indigo NT]

If you were a young person with no debt, where would you invest that kind of money?

 

[Solitaire U.]

Inside a length of 2" diameter PVC pipe, capped at both ends with waterproof cement, taken out to the desert and buried underground in a remote, secret location.

But alas, I am old...disregard my answer.

 

[ckm]

As a young person with no debt, I would take a similar course of action to that of Solitaure U.'s, and leave it so until I learned something about finance.

Well, I would spend some of it travelling through Germany. If any was left by September 2012, and I decided to attend uni, the rest would probably go into that.

 

[EyeSeeCold]

 

[Oblivious]

One of the first investment everyone should make is in land. Find out which area is about to undergo development and buy a house in that area. If development continues for the next 20 years, the value of your property could increase by as much as three times. Unless you get hit by a hurricane or your neighbourhood gets taken over by drug gangs, the value of your property should stay constant. Bricks and mortar tend to last.

Use the 20k as down payment on the house and use the rent to pay instalments to your bank. If you do it right, you'll collect more rent then you have to pay in instalments.

Or... a degree in whatever I guess.

 

[walfin]

Lol. 20K USD? Honestly, that's peanuts in this day & age.

Probably buy the ETF of the local bourse, though; it's going up, but may be capricorn effect.

 

[gruesomebrat]

Is this purely hypothetical, or do you have $20,000 that you're looking to invest?

Personally, it would come down to a choice. I would either do something similar to what Oblivious suggested, or invest in my own business. Actually, 20K would be just about enough to buy a house outright in a little community I know of, and then any rent I collect goes directly into my bank account, instead of into the banks coffers. Unfortunately, that'll only be the case for a little while longer. That particular community is bound to start drawing people back eventually, at which point property value will start rising again.

I'd be much more likely to set up my own small business. With 20k, my business dreams could become reality incredibly quickly, and a comfortable profit could be coaxed from that investment within 5 years. Then, all I have to do is maintain my market share, and live my life in relative comfort.

 

[Cognisant]

Great avatar.

Use the 20k as down payment on the house and use the rent to pay instalments to your bank. If you do it right, you'll collect more rent then you have to pay in instalments.

Or... a degree in whatever I guess.

Great advice.

If you were a young person with no debt, where would you invest that kind of money?

You could make your own low budget movie, there's not much a small producer can't do nowadays in terms of effects with a decent computer and some technical know-how, in fact a movie that's clearly been made with a low budget can be charming in a cottage-industry kind of way.
Of course this is the high-risk/high-return option.

The gift of youth is that you can make mistakes and learn from them.

 

[ckm]

Though I agree with the above, I can't think of many life lessons I'd be more content with than 20 grand.

That's kind of sad.

 

[EditorOne]

Geothermal energy seems to be a safe bet. Someday it will come into its own. Right now some of the geothermal stocks are volatile within a narrow range. That means if you've got time to kill and want to sit on the stock tickers, you can make $200-$500 a day on $5,000 worth of penny geothermal stock. I did that this week, but it's taken me two years to work out the right stock, the right conditions, the right risk, the right move, the right timing. So be careful. It's not one of those nonchalant pastimes.

Don't be a landlord unless you can do your own home repairs. If you pay for someone to fix your tenant's plumbing when it breaks, etc., it will eat you alive. And check the laws: Sometimes the obligations of a landlord are quite odious and getting rid of no-pay tenants isn't quick. There are good reasons why more people don't do the landlord thing. One reason medieval minor royalty had knights and whatnot was to go bash on tenants who were late with their annual reckoning.

 

[Jackooboy]

I would throw that money in oil ASAP. $4-5 gasoline... the oil companies will be making record profits this summer just like they did in 07 during 4 dollar gasoline.

 

[snafupants]

Oh, with no debt...A strip club? Perhaps placing an elaborate order on that show Cake Boss? Alternatively, an act of faux altruism where the fame is used for self serving purposes. Buying a passel of sea lions. Feel free to use any of these ideas.

 

[Cognisant]

Oh, with no debt...A strip club?

Be careful, the licensing is a nightmare.

Also getting good quality staff can be difficult in a western country.
Go to third world Asia, then import.

Having organised crime connections will really help, but stay away from drug dealers and drug dealing bikies, you want to be friends with professionals, not scum.

 

[EyeSeeCold]

Professional scum?

 

[EditorOne]

Well, I kind of checked, and stock prices in the adult entertainment industry aren't all that full of potential. Apparently the real money there is in illegal enterprises.

 

[Solitaire U.]

Strip club is actually a tough gig. Overhead tsunami...a real lesson in irony. Tons of cash running through the place under the table and the club can't touch any of it.

Moot point though, as initial investment is more in the neighborhood of $200,000 for a seedy dive type of establishment. Probably couldn't even build the bar for under 20 grand nowadays.

 

[TylerRDA]

The Brazilian banking industry.

 

[Razare]

I wouldn't invest that lump of money in one go. Generally, it is considered safer to spread out an investment of a lump-sum over a period time, even if just over a year. If the stock market dips 10% by July, you'll be regretting buying stocks only six months into the investment.

Second, the investment should be diversified. With 20k, perfect diversification isn't possible. I would at least break the investment into 4 chunks of 5k each and invest those separately.

1) Gold trade with limited time-horizon. The ETF with GLD is *the* way to trade gold because it is liquid. If the news changes which makes you think its time to sell gold in the business cycle, you can sell immediately with minimal commissions levied by your broker. The trade should be well executed, which requires knowledge of buy strategy and price movement that I will not explain here. I would set the upper limit of gold somewhere near $1,950 an ounce as a realistic target for the next year or so.

2) Invest in an oil company, or perhaps, an oil company ETF (so long as it does not have a huge stake in Exxon mobile or another large stake in one company, because then you might as well just buy that company's stock.) I do not know which oil company stock is best, as that requires doing weekly research.

3) Consider a company like Kellogg that has a 3% dividend yield. It's a staple goods company that has a mildly inverse relationship with oil. Let's say we woke up tomorrow to the possibility of a second recession/depression. At first, all stocks, including Kellogg's would decline. Once the crash or price correction was finished, Kellogg's stock would then soar. Also, if we hit a recession, oil prices would decline. Since Kellogg's profit increases when oil declines, their share price would soar even higher as their profitability improved. Expect such an investment to make you little to no money over your time frame, this investment seeks to be contrary to the other two commodity based investments. If those fail, this one succeeds and offsets your possible losses from the first two.

4) A growth stock, perhaps even a small cap that will have solid revenue growth in spite of a recession. These sorts of stocks are hard to find, but always worth owning as over the years, they'll rise no matter the economic conditions present, so long as the company's fundamentals are improving.

Don't own bonds, unless you plan on holding them to maturity, and are alright with low interest rates.

 

[XanMan]

As a long term investment, I would suggest water. There are plenty of water ETF's like PHO, PIO, CGW and WTR

 

[ProxyAmenRa]

food

Edit: The water idea is better.

 

[SkyWalker]

just dont bury it, in 10 years you will lose half of it, due to inflation.
if you put it in a savings account the interest would probably also be a bit less than what you lose due to inflation, so even that is not solid saving.

buy land/property or buy gold if you just want to save it in a solid way and think about what to do about it.

if you dont have enough to buy property then buy it together with others

 

[WittyUsername]

Educate yourself.

 

[Architect]

Not a lot of money to get excited about, just be conservative and put it in some short-medium term bond fund. I keep that much around as ready cash, depends on your circumstances.