100K in the bank, not sure what to do with it

[heritage]

Hi Guys,

I'm from the Netherlands (Europe) and decided to create an account on this awesome forum!

I'm 26 years old and I have 100K (in euro's €) in the bank. And I'm not really sure what to do with it.

I own my own house, which is worth 160K with a 100K mortgage (I put 60K down when I bought the house).

Don't have any other debts.

I like to keep 25K as an emergency fund, which is 12 months of business and personal expenses (I'm self employed).

I don't have any materialistic goals. I do like travelling with my girlfriend, but those expenses come out of my budget.

Saving money is something that comes natural to me. I save around 50% of my gross income. But recently I have been thinking about it, and having 100K in the bank (and growing) just doesn't seem like a the best idea

I'm kind of a newbie when it comes to investing, so I'm looking for some opinions and advice. Maybe some book recommendations to get me in the right direction?

Many thanks in advance!

[97guns]

the purest form of investing is SAVING and its amazing how quickly your snowball can grow. i think whatever your doing is working for you and i would continue with the plan, might not be making a killing on returns but its a pretty safe bet

[clatoden99]

Assuming you have $100,000 extra for risky investments that you can afford to lose.

If you're in Silicon Valley, Austin, Boston, Boulder, or some other innovation hub and you have a skill that's useful for startups, I'd get on the advisor / mentor / facilitator panel of an accelerator or just freelance it and put small amounts of money to work along with your skills. Invest $5 or $10K at a time in promising seed stage companies, but only where you can leverage your money and your insider status to help each other.

If you're handy and in a place with rising real estate prices, buy a modest fixer-upper or vacation rental property. Do the math and find an investment where you can learn and build equity.

If you're ready to change jobs or careers, invest in yourself. Use some of the money for education and to seed your own business (but seek cofounders and early investors).

If $100K is your nest egg or you don't have some special connection to a particular business activity, just go with a balanced portfolio of long term growth stocks and mutual funds. Anything else is going to Vegas with money you don't have. If you have credit card debt or other expensive non-deductible debt, pay that down.

[amarowsky]

If you choose to keep it in a bank, hopefully it's a high yield account (>/=1%). At least then you'll be making an extra 85$(or euro) a month.

The following are my opinions for good uses for the excess savings...

1) if you choose to invest. I would say put it in the 3 fund portfolio approach. 60% total us stock / 20% total international stock / 20% Total bond (all us mutual funds or etfs). Nice safe, rounded bet, that should yield nice earnings over whatever timeframe you wish, until you choose to use the money.

2) A more modest/conservative approach. Put it all into maybe 2 or 3 different passively managed bond indexes. They'll probably average between 3.5-5% ish. That way your money will beat inflation by a nice margin and grow without a high probability of taking a random nose dive as all stock potentially could.

3) Stay the course with cash, keep it in a high yield account.

4) You could start buying some precious metals? Do your research though, those type of holdings need to be understood before jumping in.

I suppose any of those options would be acceptable as long as you already have planned and put away the proper amount for retirement savings.

I hope these suggestions have provided some help.

[snafu]

cancel

[thestrongprofessional]

Diversify

Hey Heritage,

First off congratulations on saving so much! It's an awesome feat and I hope you continue to save that way in the future. There are a few things you can do with your 100k. First, I would take 25k or so of that and invest in a low expense ratio index fund. You can find some pretty good ones at Vangaurd that historically have 7-10% annual returns. I would then take about 15k of that and invest them in bonds. It's always good to hedge yourself against too much risk. I would then take 50k of that and invest in more real estate where you can generate a monthly cash flow. Do some research on homes and check out "Bigger Pockets" to get some useful tips and engage with other real estate investors. Finally take the last 10k of your money and take memorable adventure with the ones you love. Life is too short to always be thinking about the future so live a little and enjoy your loved ones.

Raphael

[james.hendrickson]

Hi Guys,

I'm from the Netherlands (Europe) and decided to create an account on this awesome forum!

I'm 26 years old and I have 100K (in euro's €) in the bank. And I'm not really sure what to do with it.

I own my own house, which is worth 160K with a 100K mortgage (I put 60K down when I bought the house).

Don't have any other debts.

I like to keep 25K as an emergency fund, which is 12 months of business and personal expenses (I'm self employed).

I don't have any materialistic goals. I do like travelling with my girlfriend, but those expenses come out of my budget.

Saving money is something that comes natural to me. I save around 50% of my gross income. But recently I have been thinking about it, and having 100K in the bank (and growing) just doesn't seem like a the best idea

I'm kind of a newbie when it comes to investing, so I'm looking for some opinions and advice. Maybe some book recommendations to get me in the right direction?

Many thanks in advance!

Put 1/3 in savings, 1/3 on the stock market and 1/3 in real estate (buy a house or invest in real estate related securities).

[Nutria]

Give the money to me. I'll put it to very good use!!!

[rerod]

At your age, Id put what ever you can in VTSAX unless you feel internationals (VTIAX) will out perform, while maintaining a emergency fund. It will be a bumpy ride, dont watch, but you will be glad you didn't leave it in the bank. Then 10, maybe 20 years before retirement invest more conservatively unless of course your a multimillionaire by then by doing so. Then just let it bump along for your kids..