What to do with my $100 000? I'm 20 years old?

[i]

Hello everyone,

Most people are in debt at this age, but I have a different problem - I don't know what to do with my money.
I am an online gamer celebrity, currently getting about $50 - 60 grand per year.

All the hard work over the last 4 years has taken its toll on my social life. I am a crazy car fan(you didn't see that coming) and would absolutely love a BMW. I can afford it, and I wouldn't be in debt, but shouldn't I invest the 20 grand in stocks instead?

I know I can be a millionaire by the time I hit 30, but that would require me to live WAY below my means and save/invest most of what I earn.

At the end of the day, all that money is useless if I live in an empty shoe box and drive a 20-year old car, if I have a car at all. Let me know what you would have done.

Thanks!

[Sally]

If I were you, I would save it for a rainy day. Think about this: are my living conditions good enough that I can live comfortably. And comfortably doesn't mean a flat screen tv in every room, a hot tub, and 2 game rooms! Just think: Do I NEED a huge mansion, etc.
No one can know what the future will hold, or if your "gamer celebrity" career will last. If I were you, I would put about 70-75% of that into savings and use the rest to your leisure! Do this with every paycheck, that way you can have spending money, but don't go into debt without realizing you're spending all your money.

DISCLAIMER: I AM NO FINANCIAL CONSULTANT / EXPERT!!!! THIS IS JUST ONLINE ADVICE

[viva la vida]

Take your time to read into several types of investment.

If you want regular interest with the least amount of risk, put your money into term deposit. BUT take into account your country's inflate rate. For example, if your term deposit is earning you 5% per year ( that is 5,000 a year ) and your country inflate rate is 3%, then technically, you will be earning only 2,000 a year. In my opinion this is a waste of money.

Another type of investment is bonds, this type of investment will earn you higher interest compared to term deposit, bond interest depends on current market and can fluctuate, but your money is safe staying in bonds without any risk of losing your original investment

Then you have 2 higher risk, higher return investment. Investment in commercial properties and of course the share market. I am not sure about the U.S market, but the Australian market has seen an average rise of 10% per year in the last 10 years. The current economical environment is a bit too volatile for commercial property market ( that is, you invest in buildings that are built to be rented out for commercial purposes). Of course, if you invest your money in the share market, you should also be ready to have losses, which on average happens about 1 every 5 years ( depending on how much risk you take ). That is for every 4 year you will be earning on top of 100,000, there will be a year you will experience negative returns.

Within the share market, you can incline towards high dividend payment or high capital growth. If you are looking to have regular income, then invest your money in companies that pay regularly to their investors. If you are willing to invest to see your money grow over time ( capital growth), then invest in blue chip companies. But the 2 can overlap nicely.

Term deposit - Bonds - Commercial properties - Share market

The first 2 types of investment, your 100,000 will stay 100,000 no matter how long you invest. What you will be earning is the interest from it. But the latter 2 types of investment, your 100,000 will have a potential to grow, and if the companies you invest in will also pay dividends to you ( for example, you will be paid 5 cents for every dollar or every share you invest in the company, if the companies make big profit in a financial year, you will get higher dividends, say 10 cents per share, on top of higher growth of your initial investment )

You can also invest your money in buying gold and hoping their value will go up, you can also invest money into residential properties - but you should know that Residential properties are a LIABILITY IF you don't earn money from it. That is, if you buy properties, you better rent them out, otherwise you will have to pay for any costs associated with the properties you own.


I recommend you talk to a financial adviser, get them to come up with a plan that suits your financial needs, do some shopping, you don't have to follow the advice of the first financial adviser you met.

[ag318pun]

Good for you that you make that kind of money.
1. Come down on that car and get a cheaper new one.
2. Invest most of that money in stocks or mutual funds
using the Roth IRA.
3. Save a little money in the bank for emergency use.
Good luck on making a million by the time your 30.

[pegasusaig]

I suspect that you are only a master of BS, and there is no money- which makes the question irrelevant.

[-Flapjack Twitties]

Buy a mutual fund!
Or
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1. Read Mags: Intelligent Investor, Shares Magazine UK(can see free archive issues at: http://www.spreadbetmagazine.com (FREE AND REALLY GOOD ezine) + other magazines for ideas on shares to buy.
2. Read http://www.swing-trade-stocks.com/ fro swing trading for a livign
3. Make observations on actual shares and share prices on Google finance, bigcharts.com and stockcharts.com
4. sign up at a broker
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Kind Regards,

Flapjack Titties (. )( .) xo