I am a recent college graduate, and have a stable job now. I do not waste my money on useless things, so now I have a decent amount saved up (around $50,000). I noticed that my money is just being saved. Is there something I should be looking to invest in?

  • Pay off any debt, highest interest rate first. Set aside working capital -- several tmes your average monthly expenditures at least. Make sure you're taking advantage of your company's 401k (or equivalent), especially if they match part of the savings --that's free money -- to whatever extent you can afford to save for retirement. What you put the rest in depends on how soon you think you're going to need how much of it, but a diversified mix of index funds is a low-effort, low-overhead way to start and many of us never fee a need to do anything more complex than that. – keshlam Apr 5 '15 at 4:31
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    Down payment for a duplex. Live in one side, rent the other. Their rent increases your 'Net Worth' by paying off the mortgage. – Knuckle-Dragger Apr 5 '15 at 16:41
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    I have to agree with both comments. First pay down any debts then invest in rental property if you have the nuts for it. BE WARNED the life of a land lord is one of insults and hard knocks. Be ready – Anthony Russell Apr 5 '15 at 17:25
  • It is hard to beat the simplicity and ease of regular mutual fund contributions for investing. The returns are good and boring. Boring helps one sleep at night. – Pete B. Apr 6 '15 at 14:54

First, of course, I agree with the comments about paying down debt. Then reserve some of those savings as an emergency fund.

After that, the default answer is to invest in an index fund as Mr Belford suggested, such as Vanguard's total stock market index fund, and leave it there forever. Even when the market tanks -- especially don't sell it when the market tanks! I might leave some cash in reserve so I can buy when the market corrects/tanks and stocks go on sale, but I'm paranoid that way. (Pick 5 random people and you'll hear 6 contradictory opinions on where the market will move soon.)

I personally would just park it in the index fund. You just graduated; you have so many things you could spend your time on (building career, socializing, learning kickboxing and sailing and rock climbing and woodworking and intramural soccer and.....), and landlording has the potential to become a time sink.

On the other hand, if you're really into landlording, why not. Just be aware it's a lot more complex than pay $50k down and collect $500 in easy profit each month. There's a lot of learning to do before jumping in.

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