Best Business to invest $60k - Pls Advice (credit score, fees, mortgage)

[ezzy]

So I'll be 21 later this year, and I work online. I've been a webmaster for some years now, but the online market is stressing me out. Too many new jacks coming in and flooding the market, my income keeps getting lower and lower. Anyways my real goal have always been to open a real business where I deal with real life people rather than a pc all day.

I will be selling my online assets to raise up capital, so let's say I come up with $60k, what will be the best business/market to invest in? I've thought about real estate or may be buying a franchise like subway (I know I'll need a bit more capital for subway), still not sure which market is best and low risk.

Here are my options - STOCKS (scares the ***** out of me), REAL ESTATE (def doable, but really not a sellers market), SUBWAY FRANCHISE (probably need @ least $100k to start up, and I've read a lot of conflicting reports on subway's management and the Local DAs), and I've thought about opening a COMPUTER HARDWARE store (but Best Buys in the area can run me out of business).

Any advice please, I graduate college in a year.

[maschuette]

I've done a lot on investing and i've opended several small businesses, so i know what i would do if i were you. Small business sucks, its a lot of risk, a lot of work, a little or no money. You really have to know what your doing to pull ahead and still you may not. Having said that, a lot of people love the struggle, i used to be one. But what i would do is start out as a "defensive investor" as benjamen Graham would say. That means dump all your money into mutual funds, which will get you at least 10%, a year forever. Very cheap fees, very easy investment, very low risk. If you invested all $60,000 in mutual funds at 10% than in 10 years you would have 150,000$, in 20 years you would have over $400,000, in 30 years over $1,000,000 and in 40 years $2,700,000. That is a long time away, but if you had a good job and dropped an aditional 20,000 in a year, than in 10 years you could have over $500,000 dollars. Kick retirement into overdrive. Just a thought

[maf763]

10% a year forever? Oh, my . . . have you been away a while?

To the OP - when you mention real estate, are you talking about flipping, or buying investments and renting them? The latter might be a more attractive option. Or look into other franchises besides Subway, which seems pretty saturated to me.

[ezzy]

Originally Posted by maschuette

I've done a lot on investing and i've opended several small businesses, so i know what i would do if i were you. Small business sucks, its a lot of risk, a lot of work, a little or no money. You really have to know what your doing to pull ahead and still you may not. Having said that, a lot of people love the struggle, i used to be one. But what i would do is start out as a "defensive investor" as benjamen Graham would say. That means dump all your money into mutual funds, which will get you at least 10%, a year forever. Very cheap fees, very easy investment, very low risk. If you invested all $60,000 in mutual funds at 10% than in 10 years you would have 150,000$, in 20 years you would have over $400,000, in 30 years over $1,000,000 and in 40 years $2,700,000. That is a long time away, but if you had a good job and dropped an aditional 20,000 in a year, than in 10 years you could have over $500,000 dollars. Kick retirement into overdrive. Just a thought

I know all about mutual funds, and I do ve some investments in that area. But I'm looking to start something. I wanna have something that I'm doing like everyday people. The whole point is I'll rather put a gun to my head than work for some1 else. Yea mutual funds' low risk, but it's more of a retirement plan.

[ezzy]

Originally Posted by maf763

10% a year forever? Oh, my . . . have you been away a while?

To the OP - when you mention real estate, are you talking about flipping, or buying investments and renting them? The latter might be a more attractive option. Or look into other franchises besides Subway, which seems pretty saturated to me.

Yea, I meant flipping (I feel this is a better investment), I may eventually start investing in rental properties.

[FelixTheCat]

if you want to reduce risk and save more money, then work in the industry first, whatever it is. even if u dont get paid a lot, you're still getting paid to learn vs. paying for your mistakes. also think a lot about what you are best at. you will have a competitive advantage if you use your strengths. you get paid a lot more for being the best.

[Naptowner]

You really don't have enough cash to make serious money at anything. You're not yet 21, haven't finished college, and apparently would have no other income. You might get lucky flipping a house, but to qualify for a loan you have to show some income, and your age works against you. You need enough cash to put some down and pay for repairs, and the market just stinks right now for real estate, so it would be very risky to try to make money flipping. You don't have enough to get into investment property, and again you will have problems getting credit.

I'd suggest you finish your degree, work like mad for a few years and make a run at it when you're 25 and have a lot more cash on hand.

[ezzy]

Originally Posted by FelixTheCat

if you want to reduce risk and save more money, then work in the industry first, whatever it is. even if u dont get paid a lot, you're still getting paid to learn vs. paying for your mistakes. also think a lot about what you are best at. you will have a competitive advantage if you use your strengths. you get paid a lot more for being the best.

I do have some work exp in accounting, and computer technician..I get your point though, and I may settle for a job somewhere down the line (for learning purposes only).

[ezzy]

Originally Posted by Naptowner

You really don't have enough cash to make serious money at anything.

Sure I do. $60k I think is enough to start up a small gig that will earn me $40k/ yr easily

Originally Posted by Naptowner

You're not yet 21, haven't finished college, and apparently would have no other income.

I'll be done with college next summer, and of course I'll ve other source of income. I said I'll be selling some of my online assets NOT all of them.

Originally Posted by Naptowner

You might get lucky flipping a house, but to qualify for a loan you have to show some income, and your age works against you. You need enough cash to put some down and pay for repairs, and the market just stinks right now for real estate, so it would be very risky to try to make money flipping. You don't have enough to get into investment property

I was recently pre-approved for a $150k mortgage loan with 10% down, and no cosigner or anything. So no problem there with my age or income.
And yea I understand the real estate market is pretty shabby right now, but it is a buyers market, and I see properties in my area going for low $58k. If I invest in real estate right now, I would use money out of pocket not loans cos I simply can afford it. And if I'm not able to resell for a profit in the current market, backup plan is to rent..and I'll try and sell again some time in the future.

Originally Posted by Naptowner

and again you will have problems getting credit.

My credit history is almost 3 yrs..No debts..and credit score is in the high 700s. So I think I'm save in that area.

Originally Posted by Naptowner

I'd suggest you finish your degree, work like mad for a few years and make a run at it when you're 25 and have a lot more cash on hand.

Lol, work like mad after college? NO WAY!

[StealthRabbit]

1) Use any excess capital to get into a good cash flowing real estate investment property, there are some bargains at the moment and will be more in late 2010 as the LT tax incentives die. (Multi-family is probably best... 4 plex and above for most diversity in tenant / cash flow)

2) get a really good paying night shift job where you don't have some idiot supervisor breathing down your neck. Us it as training as not many people like to work nights so you get to do many more tasks and responsibilities, and avoid the 'whiners / politics' of day shift. This good job will hopefully have educational benefits. Use them to the fullest. Sock away as much $$ as possible early on WHILE going to school on company nickel + learning several careers in the process. (read the book Dying Broke) hint: you are only a subcontract employee WHEREVER you spend your time, if a benevolent company wants to pay you more than you can get on your own (W/O hassle / responsibility / w VACATION and benefits, then so be it, no crime to stay). If you can do better on your own w/o killing yourself, do it!

3) when fully equipped (edu + experience) then branch out. (I would get an international job, and get paid to travel and live overseas) This looks good on resume, and is good 'life-learning'.

4) keep adding to Real Estate investment properties or upgrading via 1031 exchanges (this RE stuff keeps you somewhat inflation protected)

5) use primary residences very minimally, but for best gain. (i.e. buy junky house that is in the way of progress and has a nice BIG corner lot, set your mailbox there and 'call' it home). Sell every 2 yrs as development encroaches for tax free gains. (Hint: tax free income is gonna be VERY important in the future)

6) Investment real estate will be getting paid off by now, so.... when you get tired of managing it, sell it and carry back the paper for a great cash flow.

7) collect your checks in Tahiti. or wherever you like.

Remember, it is always better to have your cash working FOR you.

I do have a 28 yr old friend who we completed recent grad school together. He started his own business and is pulling in $25,000 month gross and stashing $15k/month. So it is entirely possible for you.