Hi basicaly I inherited this money but im not entitled to it till i'm 25 (im 20 now) however i am able to invest it and entitled to any interest earned.
Im looking for suggestions as to where to invest it, who i should talk to etc. As i said im entitled to the money in 5 years but would propably only want a few thousand to blow so i dont mind investing for longer.
Thanks in advance.
Do you want income over the next five years, or are you interested in capital appreciation?
If you get a bank of financial institution to sell you a product there will be a fee to pay, and they will probably take this fee up front, and you will probably not see the fee as it will be in the product / fund. You will be told there is no fee.
My preference is to invest in the stock market. However, the stock market is high now, but has peaked after a five year bull run, and is beginning to fall. I opened an online investment account in December, have just got the email asking for the wire transfer of funds, but after transferring in the funds, I will wait up to two years until the market is at the level I want.
Why not read all the postings on all the threads here? You will find many opinions.
Unfortunately you do not have the experience to know how brutal the finance industry is. The problem you will face is you will be told things, but you can not easily asses if what you are told is true.
You have 5 years, my advice would be to put it in a high interest deposit account for the next year ( a safe AAA rated one).
You then need to educate yourself with regards finance. Decide what you want from the next 5-10 years and figure out how best to make that money work for you. Don't touch the stock markets in present conditions. Safety first and all that.
If it was my money, I would keep it on deposit for the next while and, when the current financial turmoil has ended, I would look to put it into a product and earn high compounding interest. You would be amazed at what that kind of money would turn into in 10-20 years if left untouched. It could help you "retire" at a relatively young age.
http://www.math.com/students/calculators/source/compound.htm
100K at 10% over 20 years with a contribution of 250 monthly = 922649.57
1 : 113612.69
2 : 128650.82
3 : 145263.63
4 : 163616.03
5 : 183890.16
6 : 206287.25
7 : 231029.61
8 : 258362.83
9 : 288558.18
10 : 321915.39
11 : 358765.53
12 : 399474.36
13 : 444445.94
14 : 494126.63
15 : 549009.54
16 : 609639.4
17 : 676618.01
18 : 750610.15
19 : 832350.23
20 : 922649.57
Finding the 10% consistent return is the porblem!! And should you not discount for the time value of money. The end number is not relevant in todays terms, given 3% inflation.
You're correct Cantoris, I was just trying to demonstrate the magic of compounding.
Compounding," Albert Einstein said, "is mankinds greatest invention because it allows for the reliable, systematic accumulation of wealth.
You're correct Cantoris, I was just trying to demonstrate the magic of compounding.
Compounding," Albert Einstein said, "is mankinds greatest invention because it allows for the reliable, systematic accumulation of wealth.
He obviously know nothing of inflation*. You should discount that by at least the level of inflation (which is normally higher then most 'risk free' rates to get a better and more accurate figure.
*It wasn't such an issue back then.
I understand time value of money and inflation, and should have included them in my original points. The idea was to give the OP an introduction to the theory and let him mess around with figures in the link provided to see what he could do with compounding. This of course can be applied to shares and any other asset, it's not simply reserved for compounding.
Have you any suggestions yourself given the present market conditions and the fact that it's tied up for 5 years?
You could look at my posts (# 9 and #18) on a previous thread that shows what can be achieved with a high compounding rate. Unfortunately, the share mentioned, Berkshire Hathway, does not pay a dividend (so no income). Their profits are re-invested, as they can make better use of the money than you can.
http://www.boards.ie/vbulletin/showthread.php?t=2055199191
That is where I'm putting my few Euro. A while back I opened a share trading account, this week put a cheque into my bank current account, and will wire transfer it into the share trading account later in the week. Now comes the difficult bit. I'll wait for a year or two hoping the stock market bombs, and then I'll buy at a nice price. As a fall-back position I am analysing the shares in the S&P 500 and identifying those that meet the criteria that Berkshire Hathaway use when investing.
It is very important to buy cheaply, and shares are not cheap now.
Personally I would find a safe haven in the bond markets.
Personally I would find a safe haven in the bond markets.
Well... they're only safe if you hold them to maturity, and right now you're likely to get a fairly crappy deal with the amount of rate cutting going on.
I think the best plan is to come up with a concrete plan for what you're going to do with the money, then come up with a suitable investment plan.
I'd put most of it somewhere reasonably safe, and use it for a deposit on a house in 5-10 years' time.
It's difficult to know what's a good investment at the moment, since the markets are likely in for a beating this year.
Well... they're only safe if you hold them to maturity, and right now you're likely to get a fairly crappy deal with the amount of rate cutting going on.
.
What other choices have you got, only currencies as I see it. And as a novice investor this would be a tricky play. Get a good 10 year bond, have a look through the various government offerings in the EU area, no exchange rates involved.
What other choices have you got, only currencies as I see it. And as a novice investor this would be a tricky play. Get a good 10 year bond, have a look through the various government offerings in the EU area, no exchange rates involved.
though im bearish on the markets, 2008 could be a good time to buy equities. id stay away from us equities as an investment personally because the only other time since the 1960s rates were cut so aggressively, so fast, was after september 11th 2001. this created the assett and housing bubble that helped create the current credit crisis, so give it a few years and the us in my opinion runs the risk of if not a depression, certainly dangerous uncharted waters. add the risk of stagflation in the medium term and you've a nasty mixof risks. i also wouldn't touch the dollar with a 10 foot clown pole. my friend is a currency trader and says some traders are forecasting 1% interest rates an the next few years in the us. just plain dangerous.
