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We have just sold our house and moved into an apartment. This means that we a large sum of cash on hand that is just sitting in our savings account. Roughly $150k. We are therefore looking for investment options, preferably an investment that gives back a cash-flow.

I personally really only know of two options: stocks and rental property. I don't really like stocks as it seems like gambling to me and I don't think this is the right time to invest in the housing market, especially in Los Angeles where I live.

I am not looking for a detailed description, but a suggestion for what investment options I should look into.

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  • "Cash flow" as in income every month from that $150K?
    – RonJohn
    Jun 3, 2019 at 2:16
  • First make sure your saving account pays you decent interest.
    – user67084
    Jun 3, 2019 at 3:12
  • At least a few more things need to be known: what percentage of your net worth does this $150K represent? How are the other funds you have invested?
    – mhoran_psprep
    Jun 3, 2019 at 10:01
  • First, get a copy of "Thinking, Fast and slow" by Daniel Kahneman and read it throughly.
    – mootmoot
    Jun 3, 2019 at 12:53
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    Stocks are not gambling unless you treat them that way in the way you invest. The biggest variable I'd need to know to answer your question is your time horizon for investing the money. Are you going to need the cash anytime in the next 5 years?
    – JohnFx ♦
    Jun 4, 2019 at 1:12

1 Answer 1

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Despite your wariness of stocks, take a look at preferred stocks. Investment grade issues currently offer about a 6% return.

Like all securities, they are not risk free but if you pay attention to the external factors (financial health of the issuer and long term interest rates), they are less risky than other securities.

A good book on this is: PREFERRED STOCK INVESTING - Fifth Edition by Doug K. Le Du. It’s around $20 new but you can pick up a used copy for about $10. I learned some interesting things from it despite having owned and traded preferred stocks for 20 years or so.

EDIT 10/01/20

Le Du just announced that he is retiring and he is offering this book as a free Ebook at his web site.

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  • which us broker ( Fidelity, Etrade, Vanguard etc) can be used to trade Prefferred stocks
    – riya
    Jun 3, 2019 at 14:04
  • @riya All that you mentioned can trade preferred stocks and preferred stock ETFs.
    – chili555
    Jun 3, 2019 at 15:18
  • riya - You can trade exchange traded preferred stocks at all U.S. brokers. The exception would be issues that trade on the gray market (OTC). Many brokers don't provide such access. I wouldn't go near any of these with the exception of newly issued preferred stock IPOs that trade there before receiving their exchange listing. These can trade below par for a week or two, providing a mildly better yield
    – Bob Baerker
    Jun 3, 2019 at 17:18
  • Preferred stocks combine the worst properties of stocks and bonds into the same investment.
    – juhist
    Oct 1, 2020 at 17:31
  • If you don’t understand what it is and how it works then everything else that you do understand will only confuse you.
    – Bob Baerker
    Oct 1, 2020 at 17:49

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