Hey guys. I would like you to imagine a scenario and give me your input and opinion on the matter. Let's say hypothetically that you have worked and saved and worked and saved like a dog for the past six and a half years. You are now in your late 20's. You live in an apartment. You own an old car but it is in good condition, paid off. You are sick of living a mediocre existence as a run-of-the-mill guy paying the bills. You have no debt. You are ready for a new phase in your life, where you can achieve greatness and amass great power and wealth. You are willing to risk your safety. You are physically healthy, strong, and mentally ready.
You want greatness. You want to conquer. You have about 52,000 saved up.
In this scenario, what would/should such an ambitious man do?
I'm not an ambitious man, but I'll have a shot!
What's your career situation? That will have a huge effect.
If that cash doesn't go into something related to that, and if you aren't going to move, then it's well worth it to buy a house. It's way better financially than renting.
If I hadn't already gone to college then that's where I would use the money. Of course the degreee program would have to be one that could pay off in the long term (business, IT, medical, computer science, engineering, etc.) but something I am interested in.
If you want to change your situation now, Buy a house/condo/etc, get a roommate or two to really reduce the mortgage into nothing and live like a king for a few years. There are some serious tax advantages to owning as well. This is exactly what I did years ago, and loved it. I rented for a while then bought something (that was actually way more space and more expensive than I needed). I got a few roommates and they nearly paid the mortgage. It was great living for next to nothing in my own home for a few years.
But there are tons of things you can do with it. The "average" ror on safe investments is 5-7% so you could park your 52k in some mutual funds and know you'll be set later in life.
but it depends on what you want to do? change your situation now? or invest for later? Maybe you can swing both in your area?
I'd buy a duplex or 4-plex or even a mobile home park using some of that money for the down payment, putting some more in an account strictly for emergency repairs of that investment and if there's any left I'd take a manly vacation. Maybe a hunting or hiking trip in another country.
Start a business.
Agree, but do it right. Make a business plan and do something you love. You might have a friend that has a great idea for a business or has a small business that could use some investment, get creative.
If you have to ask, you're not ready.
Take some time off work - develop a good business idea and start writing up a plan. Find a mentor group who can help you flesh the idea out, then depending on the idea and size, start up, or leverage a chunk of that 50k into a solid loan to get the business going.
Obviously, finding that business idea and it's development time are the important things here. No point going into debt, or wiping out your savings without a solid idea and a plan to execute it.
Advice from your friendly, neighborhood banker:
Unless you are insanely wealthy, invest in your retirement.
If you have a balance on your credit card or revolving line...pay it off.
You may not look at a credit card balance as debt, but it is, and it;s the worst kind.
Sadly, $50,000 is not a lot of money for anything crazy, and you are young. Retirement, retirement, reirement.