Potential 150K proceeds from sale- investment advice!

[Scientist]

Hello There,

We have just listed our condo for sale and hope to sell it for about 150K more than what we bought it for. We had spent some money  in upgrading the condo for our use. So its basically not a straight up 150K profit.

Alhtough this may seem like wishful thinking-given that it has been on market only for couple of days and not sold yet. I would like to be prepared. We will be moving to a different city pretty soon so option 1) is to invest in a downpayment on a independent house- this is attractive as hopefully we will have a yard for the kids to play in but given the market conditions (too hot)- I dont want to buy right away and would rather wait for a downturn/chill in the housing market. What do you all think? We do need to live somewhere so will probably rent, is that money down the drain?

Option 2) Divide the 150K into batches of 25K and invest in different ways- here I would need advice from you guys about what those investment vehicles should be. The division into batches is to diversify. This is all we have to show for 10 years of work as a scientist. :( Dont want to loose it now due to bad decisions.

Option 3) Invest in small real estate transactions- to buy couple of rental properties one of the states where such deals are still available.

Option 4) Any really good advice/options you guys suggest.

Thanks!

[RyanHesson]

On option 2, what is your opinion on putting one of those 25K batches in something risky but with a high potential upside?

[okashira]

On option 2, what is your opinion on putting one of those 25K batches in something risky but with a high potential upside?

Perhaps you mean your friend, Asadulah, who works in securities?

[matchewed]

Money for rent is not money down the drain. You need to live somewhere right? Either way you'd be spending money to put a roof over your head. The fact that you're not gaining equity doesn't change that. Use http://www.nytimes.com/interactive/business/buy-rent-calculator.html to determine what is advantageous for your situation.

Option 1) If you choose to go down this option I'd determine how much you need for a down payment and put that in a safe liquid place (savings account). The remaining money should be invested per your asset allocation. You should have a defined asset allocation that weighs potential returns versus risks. I'd recommend reading http://jlcollinsnh.com/stock-series/ and http://www.bogleheads.org/wiki/Investment_Policy_Statement

Option 2) See what I wrote about asset allocation in option 1.

Option 3) Sure, do you know about real estate? Are you willing to learn? Do you know what kind of land lord you want to be? Then still do an investment policy statement. Real estate investing and landlording is still investing.

[matchewed]

On option 2, what is your opinion on putting one of those 25K batches in something risky but with a high potential upside?

I'd recommend getting to the point rather than sounding shady.

[AssetGrinder]

Sound like you need the money soon an uncertain of your future. If I were you I wouldnt invest anything now and keep it in a high interest cash deposit at the bank until you get your new living situation sorted out. After that i would then invest according to your long term outlook and situation.

[ShortInSeattle]

What's your investing policy statement?  If you don't have one, it might be a good place to start.

http://www.bogleheads.org/wiki/Investment_Policy_Statement

[RyanHesson]

On option 2, what is your opinion on putting one of those 25K batches in something risky but with a high potential upside?

I'd recommend getting to the point rather than sounding shady.

Meh, fine.

I put some of my money on a forex signal. Basically someone who trades for a living releases a signal, which you connect to. What that does is everytime they make a trade, you copy that trade. It's adjusted so if you have 25K in there and they have 50K and you're both using the same leverage than your trade will be half of theirs. You can scale it down further for less risk.

If you're interested in that I can tell you more, or if you're not I don't know what advice to tell you better than put it in index funds, or maybe put it in the lending club thing which was talked about on the blog.

[matchewed]

On option 2, what is your opinion on putting one of those 25K batches in something risky but with a high potential upside?

I'd recommend getting to the point rather than sounding shady.

Meh, fine.

I put some of my money on a forex signal. Basically someone who trades for a living releases a signal, which you connect to. What that does is everytime they make a trade, you copy that trade. It's adjusted so if you have 25K in there and they have 50K and you're both using the same leverage than your trade will be half of theirs. You can scale it down further for less risk.

If you're interested in that I can tell you more, or if you're not I don't know what advice to tell you better than put it in index funds, or maybe put it in the lending club thing which was talked about on the blog.

I don't personally care. But we're talking about some beginner level advice. If you were to advise a family member who had no clue about investing would you recommend they jump into forex signals? Would they know who to copy? Would you ask someone to put probably the largest chunk of their net worth into this type of investment? I fully recommend people to build a foundation and knowledge before tossing them to the proverbial wolves.

[RyanHesson]

Na, I'd suggest they read up a little, and I'm probably recommend a signal and tell the positive and negatives of that signal and such. I'm pretty new to it myself but I jumped into it. And I probably wouldn't recommend they put a huge chunk of their networth in. Start small.