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Hi Taylor
- I'm sitting on about $15,000 in my savings account and feel like
I need to put that money somewhere. I want to keep some of it for
emergency savings, but the rest should be growing. Any idea where
to start? I've never really played with money in the markets so I'm
a little unsure.
Hi Robert - There are a lot of fruitful ways to invest $10,000—it
all depends on your goals and what investments you already have. Putting
that money right into retirement accounts is always a good idea, but
if you've got an IRA or 401(k) that's automatically funded, you've
got plenty of other fun options. |
1. Think
about your goals first. We always want to grow our wealth,
but it's worth taking a moment to think about why. Are you looking
to build up a down payment for a house? Do you want to save every
penny for 10 years and retire early? How you invest depends on
what you hope to accomplish, as some investments need to stay
put for a while and others can deliver in the short term. That's
where a high-yield savings account can come in handy; while you
think about these bigger investment decisions, your $15,000 could
be earning upwards of 4% just sitting in savings somewhere like
SoFi or Amex Savings.
2. Think about your risk tolerance. Putting your money on
the line is a very personal decision, but there's also a general
formula for how much risk you can comfortably consider. Higher
risk = higher reward, and younger investors = higher risk tolerance.
If you're in your 20s or 30s, you get to consider a broader range
of investments because you and your money have more time to recover
from a loss (and continue growing). Business lending and angel
investing should be on the table, as should the stock market and
real estate. You might not invest in a house for $10K, but if
that nest egg reaches $30K, you can think very seriously about
buying a rental property or a house to fix and flip. Again, don't
get too excited if you don't have an IRA yet. As long as you do,
you have every reason to consider more exciting investments.
3. Think about your level of involvement. For many, if not
most, the goal is to passively grow income while you pay attention
to your work and family. I'm all for this approach, especially
as an alternative to making uninformed investment choices that
don't pay off. If the retirement account is funded and you have
a safety net in place, opening a brokerage account with a robo
advisor might be the best choice. You get to set your goals and
let the algorithm do the rest. As long as you use a legitimate
platform and let the money sit, you should see better returns
than what you'd get with a savings account, government bond, or
a CD.
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| You've got
lots of choices ahead of you. Before you make any moves, think about
your goals for the next five or 10 years, and then invest in accordance
with those plans. Good luck, Robert! |
| Legal Disclaimer:
Information presented is for educational purposes only and is not
an offer or solicitation for the sale or purchase of any specific
securities, investments, or investment strategies. Investments involve
risk and, unless otherwise stated, are not guaranteed. Be sure to
first consult with a qualified financial adviser and/or tax professional
before implementing any strategy discussed herein. To submit a question
to be answered in this column, please send it via email to Question@GoFarWithKovar.com,
or via USPS to Taylor Kovar, 415 S 1st St, Suite 300, Lufkin, TX 75901.
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