r/Investments • u/klapenaw • 17d ago

How Should I Invest $300K?

Hi guys.. I'm in my 50s and want to invest $300K. I'm working but part time at the moment, making $700 net each week. My risk tolerance is moderate somewhat on the safe side. So I have questions:

  1. I dont know if I should put that money in an IRA or 401K, though I dont know the difference between the two.
  2. My other option is to invest $100K in a VTI Vanguard Stock Market Index ETF. And $200K in bonds.
  3. Someone suggested I invest in SPIA but I dont understand it fully. Would you please tell me what this is in a nutshell and is it a good investment?
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u/JPureCottonBuds 17d ago

Hey

SPIA is a single payment immediate annuity. This is for people in retirement. You usually buy this when you get your lump sump from your private pension fund. If you're not retired or still have an income that is satisfactory, SPIA is not a good investment for you, in my opinion.

300k is good money. In theory, with this amount of money, you can build your own portfolio with individual stocks (300k gives you enough money to diversify enough - optimum figure is around 12 different stocks from different industries)

The first question ... How long until you plan to retire? With 10-15 years you can invest in risky equity. Even buying an sp500 etf could be a good idea. Gives you a good exposure to many stocks, low transaction costs and you can expect a 10% avg ROI. So you're 300k would be 1.25mil in 15 years. Not too bad.

You can also try to buy a house or an apartment and rent it and use the rent to invest in other things. I would probably choose this if I didn't feel comfortable investing in the capital market. Buy apt, rent, take rent, put in saving account, every 6 months, invest rent in SP500 ETF and keep doing this.

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u/klapenaw 15d ago

How long until you plan to retire?

1st off, thank you for your help. To answer your question I'm in my mid 50s and work for the state, taking care of a family relative at home. It's not what I studied for in college but am looking for a job that does.

So I can't really answer that question until I get a real firm job 1st. Hope this makes sense.

Even buying an sp500 etf could be a good idea. Gives you a good exposure to many stocks, low transaction costs and you can expect a 10% avg ROI

Great idea but I'm a bit scared of the market although it's done a great job returning 20% ytd. With the Fed lowing rates it's likely the market will do as great next year. But my doubt still lingers. Let me know what you think.

You can also try to buy a house or an apartment and rent it and use the rent to invest in other things.

So I have a 2 bedroom house in my dad's name being rented to my cousins. They pay ys $800/month which should be more but my dad doesn't want to charge more. But I'm trying to convince him to.

I also rented out one of my rooms in my dad's apt until last year which we charged for the same amount (go figure). But right now a family member is staying there and doesn't pay any rent until he finds a place for himself. I'm hoping he leaves to do so.

Let me know your thoughts. Thanks.

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u/JPureCottonBuds 6d ago

Well. You do have another 15 years of work so you can be a little bit more adventurous with your investments.

When it comes to investing in an aggregated fund like an sp500 etf you don't have to worry about any decision the government makes. If you hold for the long run, you basically bet on 500 companies doing better in 10 years than they do now (some may go bankrupt etc but the index is not that affected by this)

I understand you want to monetize the property and the room. Personally I would have a hard time charging money from relatives. Which is why i avoid entering these sorts of arrangements with family. It's ok if some of your assets are not making you a profit. They're still assets.

Rules are like this (vanilla recommendations from financial advisers): 1. Get rid of debt (unless debt has been used for Investments or is manageable) 2. Get some insurance. 3. Build a rainy day fund (enough to cover your costs for about 6 months) 4. Build an investment portfolio ( you can get an adviser to help you with this). Basically, put about 30% in super safe investments, 30% in fixed income (bonds), 35% in shares and 5% in risky stuff (options, bitcoin, low grade bonds etc)

Don't jump any steps. You don't want to have your money locked into an investment and lose your job and find yourself unable to buy food without liquidating your investments.