Any ideas on how to invest 20k?

Question

Hey everyone,

I'm an investor in real estate and some how at a loss for what to do with 20k... Lol this is more or less my emergency savings I've spent last 2 years saving and working 60 plus hours to get put up. I've recently had to pay for a prenup and minor duct work repairs and electrical repairs for one of my seven doors and planned to put that all on business credit cards to focus on building my business credit... That and the cash flows more than cover the expense. I want to put the money in a 12 months CD or stock portfolio of some kind but don't know if I want to deal with the net gain on that next year if I end up liquidating it before end of year also don't want to deal with a capital loss. Also important that I add I just got a job offer in commercial property management for a position 68k a year and I'm starting college online using my gi bill to cover all tuition and fees plus will be making 750 month just for being a student... Money is only an issue for the month of may since I just got off active army orders and am in-between active army and waiting on my start date for the new role.

what would you do? I'm curious to hear your thoughts in my shoes... I am thinking of looking into ai stocks but am also considering not even touching equities because of where this economy may go....

Hamp Lee III · Answer

Based on your post, I recommend holding the money until June and saving for the long term. It seems you desire to place the money in a CD or stock portfolio for the short term and deploy the funds elsewhere before the end of the year.

What about saving the 20K and building up the $750/month to deploy later next year?

...but saying this, it all depends on your short- and long-term goals.

Having $20K is a good "problem" to have...

I wish you all the best.

Randall Alan · Answer

@Marc Globensky

It doesn't make sense to carry a balance on your credit card if you have the money to pay for those expenses.  You can charge it to the credit card, but then pay it off with your cash. CD's are paying 5%... but online savings accounts like UFB direct are really close... currently paying 4.81apy... so I might consider a savings account if you think you might need access to the funds sooner than a year, etc.  Being that this is your emergency savings account, it really doesn't make sense to tie it up in a CD where you would pay penalties if you really needed the money.

Randy

William Anderson · Answer

Charles Schwab is paying 4.6% on a money fund, $1 buy-in, and no fees.  If you are like some of us who are parking cash until we see how things shake out, this is a good option.  The feds are going to raise the prime rate at least two more times which means this rate will increase.

Carlos Ptriawan · Answer

Yes there're two ways of paying these high rate revolving credit card.Either pay it off in monthly basis with their own special program (some CC has special program to divide the debt into fixed max-18 months debt fixed 8% p.a) per year.Or ... in case you have 50k cash and 10k credit card:You put 10k as pledge to a secured personal credit line, ask for 10k loan. If it's secured, the lowest loan that I've seen is 1.99% to 4 years. Some of my local CU is still offering amazing 'low cost' loan like that.I would rather pay my CC bill at 2% rather than paying them at variable rate if you could only pay them monthly.

V.G Jason · Answer

This is your emergency savings? And you want to risk it?

Ask yourself is this really wise? Don't get cute. Keep that safe.

James Hamling · Answer

STOP RIGHT THERE!!!!

You DON'T spend your Emergency Savings, FULL-STOP.    It's just that simple. None of the other stuff matters, you DON'T leverage yourself to 0.00. It's EMERGENCY Savings, it MUST stay liquid.

Don't be a fool and over-leverage yourself then wonder "oh-no, what do I do" when something happens because LIFE-HAPPENS and something will come up.

Ray Hage · Answer

Absolutely keep that 20k liquid as you never really know when you will need it. 20k seems like a ton of a money but in reality it isn't. What if one of your tenants destroys one of your units or your car gets totaled? You are going to need to come up with money out of pocket most likely in either case. I have seen many people that have no liquidity get stuck with a high interest short term loan because they weren't prepared.

Chris Stonestreet · Answer

Have to agree with a few other posters here. IF this is your emergency savings, it should be put in a high yield savings account.

Steve Vaughan · Answer

Money market accounts haven't paid 4% like they do today in like 15 years.

I'd pay down high rate revolving debt and use a money market account for my emergency fund.

Jordan Alexander · Answer

If this is your emergency fund then I would just keep it in a regular savings accounts, high-yield savings accounts, or a money market account. You want the cash available for a rainy day (and yes, they do happen).

Any ideas on how to invest 20k?

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