Author Topic: question on investment and interest  (Read 3599 times)

WootWoot

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question on investment and interest
« on: November 07, 2016, 12:06:08 PM »
Disclaimer: I am terrible at arithmetic, so if anyone has a good calculator for this, please advise!

This is just a wild thought. Is there any sort of investment, even a good-paying savings account, that would allow me to make $200 or so in interest on an initial $20,000 investment? And allow me access to the interest too?

Please don't laugh. Thanks.

boarder42

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Re: question on investment and interest
« Reply #1 on: November 07, 2016, 12:09:34 PM »
what.  thats a 1% ROI there are plenty of banks out there that pay 1% interest on checking accounts. pretty poor use of 20k but to each their own

WootWoot

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Re: question on investment and interest
« Reply #2 on: November 07, 2016, 12:21:39 PM »
I know it's not the best use of 20K. But I'm trying to think creatively of where I can easily get $200 more a month, without having to take on another job (which would be very difficult to do because of the schedule I currently work). I might be able to cut that much out of the food budget; not sure about that. This idea with the 20K just sort of popped into my mind this morning. Thanks!!

what.  thats a 1% ROI there are plenty of banks out there that pay 1% interest on checking accounts. pretty poor use of 20k but to each their own

boarder42

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Re: question on investment and interest
« Reply #3 on: November 07, 2016, 12:41:44 PM »
I know it's not the best use of 20K. But I'm trying to think creatively of where I can easily get $200 more a month, without having to take on another job (which would be very difficult to do because of the schedule I currently work). I might be able to cut that much out of the food budget; not sure about that. This idea with the 20K just sort of popped into my mind this morning. Thanks!!

what.  thats a 1% ROI there are plenty of banks out there that pay 1% interest on checking accounts. pretty poor use of 20k but to each their own

invest it in VTSAX or its just going to lose money to inflation over time. 200 dollars a month is much different than 200 dollars by the way. 200 a month would be a 12% return and you arent gonna get that anywhere really.  maybe a properly bought 100k rental property.

WootWoot

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Re: question on investment and interest
« Reply #4 on: November 07, 2016, 12:50:11 PM »
Yeah, there's got to be a better way...

boarder42

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Re: question on investment and interest
« Reply #5 on: November 07, 2016, 12:56:58 PM »
Yeah, there's got to be a better way...

there isnt a better way.. if it was easy to simply return 12% annually everyone here would already be doing it but there isnt.  it would allow for a 9% SWR.  and we could all retire way sooner.

doneby35

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Re: question on investment and interest
« Reply #6 on: November 07, 2016, 01:17:00 PM »
You won't get $200 a month with a bank... You will get $200 a year, if for example you used ally bank. Better than to invest in index funds or rental if you're looking for monthly income.

WootWoot

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Re: question on investment and interest
« Reply #7 on: November 07, 2016, 01:25:35 PM »
Oh, poop...It was a nice thought.

Thanks, all!

Yeah, there's got to be a better way...

there isnt a better way.. if it was easy to simply return 12% annually everyone here would already be doing it but there isnt.  it would allow for a 9% SWR.  and we could all retire way sooner.

RWD

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Re: question on investment and interest
« Reply #8 on: November 08, 2016, 08:00:01 AM »
First trust deed real estate loans might be close. But that's far from risk free and much less tax efficient than stocks/mutual funds.

JAYSLOL

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Re: question on investment and interest
« Reply #9 on: November 08, 2016, 09:54:57 AM »
Disclaimer: I am terrible at arithmetic, so if anyone has a good calculator for this, please advise!

This is just a wild thought. Is there any sort of investment, even a good-paying savings account, that would allow me to make $200 or so in interest on an initial $20,000 investment? And allow me access to the interest too?

Please don't laugh. Thanks.

No laughing here :)

There is no 100% reliable way to make $200 a month with a $20k investment.  Investing in stocks will only get you around halfway there, and that's averaged over long periods of time, not garunteed every month.  Savings accounts will only get you $200 a year, not a month. 

Here are some creative ideas instead. 

- Buy and sell with Craigslist/auctions/garage sales.  if you have $20k sitting around, it can be put to use purchasing things to flip on your local classifieds.  It takes a little work, but if you put in the time and make smart but/sell decisions you will have no trouble making over $200/m on top of paying for your time spent. 

- Start a small or part time business.  $20k is more than enough to start many small home-based businesses.  Choose something you are good at and get yourself out there. 

WootWoot

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Re: question on investment and interest
« Reply #10 on: November 13, 2016, 11:01:50 AM »
I did try selling on Etsy a few years back. I probably didn't try hard enough. Etsy has become a sea of sellers, and it's very , very hard to stand out among the herd. But people manage to do it, somehow.

JAYSLOL

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Re: question on investment and interest
« Reply #11 on: November 13, 2016, 09:34:44 PM »
I did try selling on Etsy a few years back. I probably didn't try hard enough. Etsy has become a sea of sellers, and it's very , very hard to stand out among the herd. But people manage to do it, somehow.

That true.  Lots of competition on Etsy (and eBay and craigslist). 

Not sure if you've ever done a full "case study" on the forums before, but if you want highly-tailored feedback on how accelerate towards your goals, it can be quite helpful. 

WootWoot

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Re: question on investment and interest
« Reply #12 on: November 14, 2016, 11:48:07 AM »
No, I haven't done a case study. I'm a bit afraid. At the moment, I'm feeling quite fragile, as I'm involved in a legal matter. Also, I'm into my second month of tracking expenses on Mint and I want to get a better picture before I post a case study. It's definitely on my to-do list, though!

I did try selling on Etsy a few years back. I probably didn't try hard enough. Etsy has become a sea of sellers, and it's very , very hard to stand out among the herd. But people manage to do it, somehow.

That true.  Lots of competition on Etsy (and eBay and craigslist). 

Not sure if you've ever done a full "case study" on the forums before, but if you want highly-tailored feedback on how accelerate towards your goals, it can be quite helpful.

JAYSLOL

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Re: question on investment and interest
« Reply #13 on: November 14, 2016, 10:27:37 PM »
No, I haven't done a case study. I'm a bit afraid. At the moment, I'm feeling quite fragile, as I'm involved in a legal matter. Also, I'm into my second month of tracking expenses on Mint and I want to get a better picture before I post a case study. It's definitely on my to-do list, though!

I did try selling on Etsy a few years back. I probably didn't try hard enough. Etsy has become a sea of sellers, and it's very , very hard to stand out among the herd. But people manage to do it, somehow.

That true.  Lots of competition on Etsy (and eBay and craigslist). 

Not sure if you've ever done a full "case study" on the forums before, but if you want highly-tailored feedback on how accelerate towards your goals, it can be quite helpful.

That sounds like a good plan.  I started tracking spending a couple years ago and it's helped a lot (mostly with motivation).  Hope you get through the legal stuff ok. 

Crazycarl

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Re: question on investment and interest
« Reply #14 on: November 16, 2016, 07:42:01 AM »
Do you need access to the 20k or just get the 200/month?

I have averaged 12.8% with Prosper over the past 2 1/2 years, but that can be very risky and you cannot just pull your money out when you want.

The only other option would be a hard money loan or real estate.

Just a suggestion

RWD

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Re: question on investment and interest
« Reply #15 on: November 16, 2016, 08:14:17 AM »
Do you need access to the 20k or just get the 200/month?

I have averaged 12.8% with Prosper over the past 2 1/2 years, but that can be very risky and you cannot just pull your money out when you want.

The only other option would be a hard money loan or real estate.

Just a suggestion

I lost ~28% of the money I put into Prosper...

Crazycarl

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Re: question on investment and interest
« Reply #16 on: November 16, 2016, 08:28:09 AM »
Do you need access to the 20k or just get the 200/month?

I have averaged 12.8% with Prosper over the past 2 1/2 years, but that can be very risky and you cannot just pull your money out when you want.

The only other option would be a hard money loan or real estate.

Just a suggestion

I lost ~28% of the money I put into Prosper...

Did you have any filters on?  I had to read up a bit on some others and how they were filtering. 75% of mine are in Class C notes, and they are all $25 notes. A few in class B and some more in Class D and E, with very little in A and none in AA. I can share a snapshot of my filters with anyone if they want.

RWD

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Re: question on investment and interest
« Reply #17 on: November 16, 2016, 09:02:34 AM »
Do you need access to the 20k or just get the 200/month?

I have averaged 12.8% with Prosper over the past 2 1/2 years, but that can be very risky and you cannot just pull your money out when you want.

The only other option would be a hard money loan or real estate.

Just a suggestion

I lost ~28% of the money I put into Prosper...

Did you have any filters on?  I had to read up a bit on some others and how they were filtering. 75% of mine are in Class C notes, and they are all $25 notes. A few in class B and some more in Class D and E, with very little in A and none in AA. I can share a snapshot of my filters with anyone if they want.

I don't remember the exact ratio I used (this was back in 2007 - 2009), but most of them tended towards the higher risk borrowers. The 20-29% interest rate couldn't keep up with the default rate. I believe most lenders from that time period lost money or broke even.

I don't think peer-to-peer lending is inherently flawed, but I would never recommend anyone use Prosper because they essentially ignored trying to collect on defaulted borrowers (often not even filing the necessary legal paperwork). Of course everything is fine and rosy when the economy is doing well...

WootWoot

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Re: question on investment and interest
« Reply #18 on: November 17, 2016, 11:41:37 AM »
OP here.

Not sure what I'm doing, ultimately. I decided not to make any major money decisions because of the load of stress I'm under at the moment. The legal matter has just gotten more complicated so I need to put my energy there.

In the meantime, I'm faced with the old "cheaper to rent or to buy" question. If anyone wants to point me to some good threads on that topic here, or elsewhere, link away. Thanks! And thanks for the good wishes re: my lawsuit.