Best way to safely invest $20,000

[dunkadunkle]

I do not know anything about investing, stock market, mutual funds etc. I have been lurking around on my own with online trading but just don't really understand anything. At the moment I have the money in a high interest savings account that is earning basically nothing.

About me: I am 25 years old, college graduate, not married, no kids, no real responsibilities, and my monthly expenses total to about $1,200 a month. I want to invest the whole $20k for something longterm, minimum 10 years. Would rather play it safe and do something that is low risk and more of a guarantee vs a high risk.

All feedback and tips are appreciated, whether its doing the online trading, getting a financial advisor, CDs, bonds, etc.

Thanks.

[blue70beetle]

No to the Certificate of Depreciation (CD) for sure! It's basically a savings account where you have to leave your money parked, and you might get a certificate to tell you it's parked there. You already know what an impressive return you get from a savings account.

20k on hand at your age is awesome. Put as much into a Roth IRA as the law allows and let it build compound interest so you can retire a multimillionaire. Don't invest in individual stocks - there are plenty of mutual funds that will average 10%+ annually over the long term. You won't do that with individual stocks unless you happen to get lucky.

[jnm2.0t]

$20k isnt enough money to be involved with a financial planner worth your time. The only planners willing to work with that much are not the ones you want.

I'd just pull up a risk assessor, available on almost any financial website, and take the resulting allocation and use ETFs for it. One issue with MF are they don't really ever act like what you think you're buying. It may say Large Cap on the prospectus but the way it behaves is often not at all what you are expecting meaning your ideal allocation isn't being met. If your goal is an allocation based on asset classes The ETF indexes won't have that issue, or at least not to the same degree.

I second putting this money into a Roth and doing it there. You wont be able to put it all in though (that's what she said).

[dunkadunkle]

lol @ thats what she said, anyways i should have mention i have already put the maximum, which is 5k a year, into a Roth IRA. so this 20k should be done with?

[blue70beetle]

The same type of funds as the Roth...assuming they're decent funds.

[a_riot]

Use the money to buy as much physical silver as you can get your hands on. Its going to be worth thousands an ounce in the near future according to me.

I concur!

[blue70beetle]

Don't listen to this guy...metals have historically not provided good returns. They do well in short spurts, so they're only for people who feel they can afford to lose their money, with a slight chance of making a big return.

[Issam Abed]

About me: I am 25 years old, college graduate, not married, no kids, no real responsibilities, and my monthly expenses total to about $1,200 a month. I want to invest the whole $20k for something longterm, minimum 10 years. Would rather play it safe and do something that is low risk and more of a guarantee vs a high risk.

Being 25 and sitting on $20,000 is quite an achievement and you should be proud of that.
Look @ Canadian banks (any of them) if you are into stocks:
Toronto Dominion - TD
Bank of Montreal - BMO
both very good banks. Do some research into mining stock as well but if stocks are not your thing then the next best move would be investment property .

[GoFaster]

Pick 4 big-name dividend-paying stocks that are in different segments and split it evenly between them. If they offer a DRIP (dividend reinvestment program), do that.

A Canadian bank, a telecom, an industrial, and a health care. Or something of that sort.

[jnm2.0t]

Pick 4 big-name dividend-paying stocks that are in different segments and split it evenly between them. If they offer a DRIP (dividend reinvestment program), do that.

As a sole investment? Bad idea.

[Vision33r]

I've used $20k as just play money last year and bought loads of iPads last year and made out about $7k in 6 months.

[joness0154]

As a sole investment? Bad idea.

Diversity is key. I'm a fan of low cost index funds myself, but YMMV.

[titleist1976]

I do not know anything about investing, stock market, mutual funds etc. I have been lurking around on my own with online trading but just don't really understand anything. At the moment I have the money in a high interest savings account that is earning basically nothing.

Leave the money in the high interest savings account. While doing that, go read up on things that interest you. Read a few books. If they all completely bore you, you know you should just find some good ETF's (as jmn2.0t mentioned) and remember EVERYTHING works in cycles. If you find things that you are reading about are interesting, move some of your money into an online trading account. If you find this stuff really interesting, make sure you read up on taxes - short term capital gains, long term capital gains, wash sales (really important to know about), ubti, etc... etc...

Someone mentioned a Roth. That's good, too. Think of it as an umbrella and it protects you from the things I just mentioned - taxes.

P.S. Nothing is safe. If anything was safe, everyone would be doing it.

[SAPJetta]

I'm safe. Send your money to me.

[twilk]

I've used $20k as just play money last year and bought loads of iPads last year and made out about $7k in 6 months.

How do you make money buying ipads?

[blue70beetle]

How do you make money buying ipads?

By selling them to a Nigerian prince. You'd be amazed at what those dudes will pay for those things! And for them, it's still a heck of a deal, because you can ship a ton of iPads inside the trunk of each car that you ship.

One would think Apple would recognize this and open a store or two over there.

[Sentinelist]

Second the mutual funds. Do some due dillgence with some prospectuses (prospecti?) to find the right one(s), sink it in, and don't pull out when the going gets rough (that's what she said).

Add more when you can, always reinvest your dividends.

[ValveCoverGasket]

You won't do that with individual stocks unless you happen to get lucky.

not a great deal of luck required -

NLY
and AGNC (though a shorter track record, to be sure)

id hold those for a year and a half or so and see where things are at come 2014.

thatll be a pretty easy couple of thousand in a year or so

[Mtl-Marc]

Diversity is key. I'm a fan of low cost index funds myself, but YMMV.

[mesuky22]

S&P 500 Index fund