If someone gave you 50K, how would you make the money grow?

Imagine someone you know is going to give you 50K. But the catch is the only way you'll be able to get the money is if you come up with a legit plan on how to substantially grow the 50K... what would you do? Would you invest it? If so, in what? Would you start a business with it? If so, what type of buisness? Explain your answer and why.

Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Most folks have a dificult time buying a properly balanced portfoilio of stocks on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Unless you know what you are doing, it is best to buy mutual funds. I like Vanguard.com, other people like Fidelity, TIAA-CREF, and DFA. Buy no-load, low cost funds. If you are like most people you will invest part of your money aggressively in stock funds, and part conservatively in money market funds and bond funds. Vanguard has an on-line questionnaire which will give you an idea of how to do "Asset Allocation," determining how much to put in each type of fund.

If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. If you have children, you may want to consider a 529 plan or other college savings plan that grows tax free.

I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion.

Buying a house instead of renting will save you a lot of money in the long run. You don't have to pay rent and you build equity in your house instead. Buying rental property can also be a good investment. However, being a landlord can be hard work, and many people are not good at it. If you don't know how to handle deadbeat renters, you can have trouble.

If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments.

Believing advice you get on Yahoo answers can be risky, so read these websites for further information. If you find it too confusing, contact a professional financial advisor. They will charge you significant commissions, however.

Sources:

http://www.vanguard.com/VGApp/hnw/planningeducation
http://www.fool.com/school.htm
http://sec.gov/investor/pubs/assetallocation.htm
http://www.diehards.org/readsites.htm
http://finance.yahoo.com/education/begin_investing
http://finance.yahoo.com/funds/basics

Asset Allocation Calculators
(Determining how much to put in stocks and how much into bonds and money markets is a personal decision depending on your financial status. These Asset Allocation questionaires give you a rough idea how to do this. I like Vanguard best, but try some of the other sites as well.)
https://personal.vanguard.com/VGApp/hnw/FundsInvQuestionnaire?cbdInitTransUrl=https%3A//flagship.vanguard.com/VGApp/hnw/planningeducation/education
https://ais2.tiaa-cref.org/cgi-bin/WebObjects.exe/DTAssetAlcEval
http://www.ifa.com/SurveyNET/index.aspx

Web forum: http://www.diehards.org/
(Many investment web forums are overrun by scam artists. This one seems the most legitimate site)

529 plans: http://www.savingforcollege.com

First, I would max out a Roth IRA. $45,000 remaining. Then I would put about $10,000 in a high yield online savings account. $35,000 remaining. I would buy a no load, low cost index fund, growth fund, income fund, international fund, bond fund all inside of a tax-managed account, and a money market account. With the remaining $22,000, I would take $5,000 and ladder some high yield online CDs (1,2,3,4,5 year CD) I would also purchase a REIT. With the last $15,000, I would use dollar cost averaging to fund my investments monthly.

Invest 20k into an interest bearing account. 10 g's into a high yeild IRA and another 10 into a low yeild IRA. The other 10 I would keep in my savings account and have it as my nest egg for those "just in case" days.

invest, if you invest it most deposits double within 7 yrs

I think I would invest it in real estate. The market is down in my area right now--it's a buyers market. So I'd buy into an upscale apartment complex with other investors. I know of people who have done that--3 or 4 people together and are making good money now--they bought when the market was low. Their renters are retired folks who pay their rent on time and are respectful of the property. That's the kind of renters I would hope to attract.

50K is 20% of $250,000. $250,000 is the average home price in the U.S. Most people can afford a Mortgage payment, but can't come up with the 20% that is now almost required to buy a home. I good investment would be to buy a First home, or find a cheaper second home in a rental area, that you can get a good deal on and try to build Rental Income. There are other options but I would buy a home with 50 K of free money.

Starting your own business is a good idea ,but without experience and a great plan, you could loose it all. Most business close in the first year. Talk to a financial adviser. And if you start a business try not to take a partner(bad news!) good luck 50 k is not as much $ as you think ,so make sure you invest wisely

Roth IRA and rest in American funds

I would invest it in to the stock market or currency exchange(the currency exchange exchanges 1.2 trillion dollars a day)Then after i get more money i would start a stock market buissness where people give you their money to put into stock and get more money then you take whatever precent of intrest money you chose to take out of the money they make.

Kiss their feet...then invest in a business!!!!

I would start a daycare, one with cameras, so parents could see their children while they were at work, a type of funland daycare, with slides for the children to enter...really neat things like that. Learining in a fun way, where children would cry to leave, instead of come each day. I love to work with children, so I would be happy. Parents would be satisfied to leave their children, so lots of business.

I'd let it sit in the bank for a few months. Earn intrest while I prepare for a loan to get the rest of the money to buy a rental.

INVEST IN STOCKS! :)
Or put it in the bank, because if I had 50K that's all I would ever need lol.

For a plan, I'd use good ol' salami slicing on a company,
From there on, assuming I have enough, I'd just go to south america and fish all day.

down payment on a house,have a home business

if someone would give me 50 k i would invest it in car business... like buy lincolns and get tlc on them and put em on rent i will surely make double at the ned of the year.. trust me this works i have a friend who does the same thing

I'd use it to start my own biz and pimp out my chocolatebabycakes to start bringing in mo' money.

I would put it in the stock market or a CD.
A CD is very very safe, and you get continuous compounded interest, but you cant touch that money for a specified amount of time. Im a spontaneous person and i like to gamble a bit, so the stock market is my thing.

i would take that 50k and wait for apple to drop a little bit and then buy completely because apple is a solid stock. i would sit on that money and forget it ever existed.

real estate.... always appreciating...

I'd give it to me :)

Right now...I would put it all into the GBP/JPY currency pair. London is set for a very rough first, and possibly second, quarter this year. The Japanese economic outlook for '08 had a GDP revision from 1.7 to 2.0, so the strength in the JPY will see an increase as well. Currently the GBP/JPY is trading around 216, and I am anticipating a decline to about 175 over the course of the year.
Now I always leave a reserve for currency accounts, but that would be one way to turn 50k into 700K.

I would buy another home!

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