02-08-2005 16:52									#1
	Someone hands you $125K... Browse Apolyton AD-FREE

Tomorrow, someone hands you a check for $125,000. What do you do with this money? How would you invest it to become a millionaire? Oh, and btw, you no longer have a place to live, so you need to consider that as well...

	02-08-2005 17:08									#2
	Support Apolyton, pre-order Civilization IV

Pay off all my debts. Open a business.

	02-08-2005 17:15									#3
	Support Apolyton or Terrorists Win

Pay off debts and bank most of the rest

	02-08-2005 17:17									#4
	Re: Someone hands you $125K... Help yourself to an AD-FREE life

quote: Originally posted by bfg9000 Tomorrow, someone hands you a check for $125,000. What do you do with this money? How would you invest it to become a millionaire? Oh, and btw, you no longer have a place to live, so you need to consider that as well...

Well if I no longer have a place to live then $125,000 (£70,000) will just about buy me a rabbit hutch to live in as that is less than half the average dwelling price in the UK.

	02-08-2005 17:53									#5
	Increase Your PM Length

quote: Originally posted by chegitz guevara Pay off all my debts. Open a business.

What kind of business?

	02-08-2005 17:53									#6
	Support Apolyton buy from Amazon

It's a secret.

	02-08-2005 17:54									#7
	Enter the AD-FREE zone

quote: Originally posted by Zulu Elephant Pay off debts and bank most of the rest

So you would just put the rest in a checking account?

	02-08-2005 18:00									#8
	Put an end to popups!

quote: Originally posted by chegitz guevara It's a secret.

A secret business. Something illegal, perhaps. Don't use that money to deal drugs, CG. There has to be a better use for it..

	02-08-2005 18:00									#9
	Enter the AD-FREE zone

quote: Originally posted by bfg9000 What kind of business?

Mail order slimming pills.

	02-08-2005 18:00									#10
	Re: Re: Someone hands you $125K... Get a bigger avatar today!

quote: Originally posted by el freako Well if I no longer have a place to live then $125,000 (£70,000) will just about buy me a rabbit hutch to live in as that is less than half the average dwelling price in the UK.

Yeah, would make a nice deposit on a place though!

	02-08-2005 18:04									#11
	Support Apolyton, buy Galactic Civilizations

Do you want to be rich sooner or later? Would you rather be very very rich or just rich enough so that you don't have to work and can live at your current level? Would you mind if you lost some of it along the way and then got it all back in the end?

Meh?

If I had no debt?

Seeing that I'm only 30.

Take about $50k and sink into Real Estate in the form of REITs as well as into no load Large Cap Mutual Funds that aren't too bond heavy...

Take another $50k and structure a bond ladder with about 30-40% I bonds, 20-25% Treasuries, and the rest a blend of high to mid rated corporate bonds, and what the hell maybe even some GM junk rated bonds.

That leaves you $25k to invest in stocks, and/or Vegas.

	02-08-2005 18:06									#12
	Re: Re: Re: Someone hands you $125K... Put an end to popups!

quote: Originally posted by MikeH Yeah, would make a nice deposit on a place though!

What about dividing the amount to make a minimum deposit on a number of units, yourself living in one, and then rent out the rest until property values raise to the point where it makes sense to sell them off.. Perhaps this would work best in a University town..

	02-08-2005 18:08									#13
	Support Apolyton, buy Galactic Civilizations

A minimum depost usually doesn't bring the mortgage down enough to have competitive rents. So, if you mean mimium such that you cash flow cancels out payments, then ya that might be a good idea... if you don't mind being a landlord.

	02-08-2005 18:12									#14
	Tired of ads?

quote: Originally posted by Japher Do you want to be rich sooner or later? Would you rather be very very rich or just rich enough so that you don't have to work and can live at your current level? Would you mind if you lost some of it along the way and then got it all back in the end? Meh? If I had no debt? Seeing that I'm only 30. Take about $50k and sink into Real Estate in the form of REITs as well as into no load Large Cap Mutual Funds that aren't too bond heavy... Take another $50k and structure a bond ladder with about 30-40% I bonds, 20-25% Treasuries, and the rest a blend of high to mid rated corporate bonds, and what the hell maybe even some GM junk rated bonds. That leaves you $25k to invest in stocks, and/or Vegas.

I would just want to invest in something where I have at least 25% growth in 5 years.. 5 years ago, real estate was a good way of doing that. I dont know if it still is. What is an REIT?

Thanks for the detailed answer. Do you work in finance?

	02-08-2005 18:26									#15
	Suffering from ads?

quote: Do you work in finance?

No.

quote: What is an REIT?

A REIT is a Real Estate Investment Trust, it is pretty much a mutual fund but instead of owning stocks and bonds it owns real estate. If you buy one, buy a publicly traded one.

As for 25% in 5 years you should be fine, IMO. Especially if you consider the rule of 72, or that at 10% you will double your money in 7.2 years. Not too shabby.

REITs and Bond Ladders are good long term investments, more than 5 years. Especially in the case of a ladder you need a lot of money for it really to make a difference. However, once a bond ladder matures so that it is making in interest every year what it is you need to survive on you are set with that tax free income without losing you nest egg. I would pad the ladder with REITs mainly because I am riskier, which is also why I would go with Mutual Funds.

	02-08-2005 18:44									#16
	Re: Re: Re: Re: Someone hands you $125K... Avatar Enlargement: We've got the solution

quote: Originally posted by bfg9000 What about dividing the amount to make a minimum deposit on a number of units, yourself living in one, and then rent out the rest until property values raise to the point where it makes sense to sell them off.. Perhaps this would work best in a University town..

I'd just buy a place and have an affordable mortgage and live in it and keep working, would be a great chance to get on the property ladder, which I can't at the moment 'cause it's stupidly expensive round here.

I'm happy enough, don't need to be a millionaire.

	02-08-2005 18:45									#17
	Increase Your PM Length

quote: Originally posted by chegitz guevara Pay off all my debts. Open a business.

The rest of the commies will be revoking your membership in about 5 minutes.....

	02-08-2005 18:47									#18
	Support Apolyton, buy Call to Power 2

quote: Originally posted by bfg9000 A secret business. Something illegal, perhaps. Don't use that money to deal drugs, CG. There has to be a better use for it..

with that sort of inital outlay, drugs would be a very solid investment, if a bit on the risky side.

	02-08-2005 18:59									#19
	Increase Your PM Length

quote: Originally posted by Japher A minimum depost usually doesn't bring the mortgage down enough to have competitive rents. So, if you mean mimium such that you cash flow cancels out payments, then ya that might be a good idea... if you don't mind being a landlord.

Yes, that's what I mean. If the rent can cancel out payments and upkeep that's all you need. Where you hope to make money is by purchasing in an area where property values are very likely to increase. Sell all the units in 5 years and make a bundle..

I recently read something interesting about how to choose the right location for real estate. Toll Brothers, a wealthy builder on the East Coast, recently revealed how they pick new sites for development. They locate where all the Starbucks are in a given county and then search for undeveloped land in a 20-mile radius from each Starbucks. Apparantly, Starbucks attracts wealthy people..

	02-08-2005 19:00									#20
	Lose 30 kilos (of popups)

quote: Originally posted by bfg9000 A secret business. Something illegal, perhaps. Don't use that money to deal drugs, CG. There has to be a better use for it..

No, it just an idea I had, which I think will be really successful, so long as no one else gets there before me.

	02-08-2005 19:02									#21
	Re: Re: Re: Re: Someone hands you $125K... Put an end to popups!

quote: Originally posted by bfg9000 What about dividing the amount to make a minimum deposit on a number of units, yourself living in one, and then rent out the rest until property values raise to the point where it makes sense to sell them off.. Perhaps this would work best in a University town..

The housing market is so overvalued here in the UK that rent's will not pay the interest on mortgages so that method will lose money.
If you add in the fact that house prices are 40% above their long-term trend then it also makes furthur capital appreciation extremely unlikely.

In short I think that would be an excellent way to make yourself bankrupt.

	02-08-2005 19:09									#22
	Support Apolyton, buy Civilization III: Complete

Why would I want to be a millionare?

I'd either buy a house/studio or just hold on to it for when it's needed.

	02-08-2005 19:12									#23
	Support Apolyton, buy Galactic Civilizations

quote: Originally posted by chegitz guevara No, it just an idea I had, which I think will be really successful, so long as no one else gets there before me.

I had a friend who had an idea like that once. He came up with a way to modify a hooded cat litter box to completely remove cat smell no matter how long since you've last cleaned the box. He had a piece of ductwork extend from the top of the box to the exhaust fan in the bathroom. Where the ductwork attached to the litterbox, there was a small fan inside the ductwork which helped push the air from the box upward to the exhaust fan..

It worked really well and he thought he had a unique product based on his own patent research. However, when he began the patent process, an attorney discovered that a similar product had been patented. His dreams of being a litterbox tycoon were destroyed.. At least he gave it shot, though..

	02-08-2005 19:13									#24
	Help yourself to an AD-FREE life

quote: Originally posted by bfg9000 I had a friend who had an idea like that once. He came up with a way to modify a hooded cat litter box to completely remove cat smell no matter how long since you've last cleaned the box. He had a piece of ductwork extend from the top of the box to the exhaust fan in the bathroom. Where the ductwork attached to the litterbox, there was a small fan inside the ductwork which helped push the air from the box upward to the exhaust fan..

That's a terrible idea.

	02-08-2005 19:17									#25
	Full PM-box? Change here!

Same as MikeH - would make a handy deposit...

	02-08-2005 19:17									#26
	Re: Re: Re: Re: Re: Someone hands you $125K... Support Apolyton buy from Amazon

quote: Originally posted by el freako The housing market is so overvalued here in the UK that rent's will not pay the interest on mortgages so that method will lose money. If you add in the fact that house prices are 40% above their long-term trend then it also makes furthur capital appreciation extremely unlikely. In short I think that would be an excellent way to make yourself bankrupt.

What about on the fringes of metropolitan areas along well-traveled roads? Areas like this which are largely rural but where expansion driven by city folk is likely only a year or two away usually have reasonable housing prices.

	02-08-2005 19:18									#27
	Increase Your PM Length

I need that, my cats litter is stinky.

	02-08-2005 20:42									#28
	Re: Re: Re: Re: Re: Re: Someone hands you $125K... Inflate your Upload Space

quote: Originally posted by bfg9000 What about on the fringes of metropolitan areas along well-traveled roads? Areas like this which are largely rural but where expansion driven by city folk is likely only a year or two away usually have reasonable housing prices.

I suggest you read up on 'The Greenbelt'

Now is an absurd time to invest in UK residential housing, in 3-4 years it will probably be much better.

	02-08-2005 21:32									#29
	Re: Someone hands you $125K... Lose 30 kilos (of popups)

quote: Originally posted by bfg9000 Tomorrow, someone hands you a check for $125,000. What do you do with this money? How would you invest it to become a millionaire? Oh, and btw, you no longer have a place to live, so you need to consider that as well...

THis is not that theoretical to me in a sense. If I sold my house, I would likely garner net proceeds of between 120-150K. However I choose to continue to have a home.(Housing values have appreciated for the 3 years I have owned this home)

If I had no house and was handed 125K, my decision would be the same . I would use the bulk of the money to purchase a home (making a 25% payment against the purchase price to avoid having to buy mortgage insurance). If there was much left I would choose some broad-based mutual funds.

	02-08-2005 21:35									#30
	Put an end to popups!

I would invest 50k safely, 25k to banking account (I'd live with that money for all my studies, rest of them, easily, glorious) and 50k I'd use to set up the company with few of my talented buddies from school we've been dreaming of.. with that much capital straight cash, we'd get another 50k easily as loan, and 100k would be enough for us to get it going on and run it for a year or two alone.