What would you do with $250,000 right now? Imagine waking up one morning to see a Genie at the foot of your bed with milk and cookies. She grants you the wish of converting your future earnings or current illiquid net worth into $250,000 cash.
For example, say you were to work for 20 more years and earn a median income of $60,000 a year before taxes. Instead of methodically saving 20% for the next two decades, you can get all that money right now. Would you take it? I bet most would say “yes” since it’s your money and the present value of a buck is greater now than later.
The big question is, what are you going to do with the $250,000? The stock market is volatile, bonds are bubbliscious, and savings interest rates are less than 2%. Perhaps you’ll use some of the money to pay off your debts, further your education, and help out your loved ones. Or maybe you’ll invest the money in your start-up company and watch it grow into the multi-millions.
Finally, maybe you’ll do absolutely nothing with the $250,000 and just keep it liquid for a rainy day. The political landscape is pretty horrific as there’s no way the Jobs Act Bill will get passed since it attacks charities and municipal bonds which fund state construction. Massive layoffs are imminent before the holidays despite cashed up corporate balance sheets because demand is uncertain. You might very well be in for rough times, and that $250,000 + $1,600/month in unemployment insurance will help you get through!
Genies are appearing in front of many homeowner’s beds thanks to Ben Bernanke and the Fed’s low interest rate policy. Few people would have ever expected the 10-year yield to drop below 2%, but it has. Cash-out mortgage refinances are tempting people night and day now, but the party can’t last forever. Ben’s nickname is “Helicopter Ben” for making it rain money. I prefer to call him “Bengenie.”
WHAT I’D DO WITH $250,000 OF MY OWN MONEY (REMEMBER, IT’S NOT FREE MONEY!)
* Look for attractive 5%+ yielding 2 bedroom, 2 bathroom rental properties. Rentals properties are very attractive in 2021 because interest rates have come way down. The value of rental income has gone way up because it takes a lot more capital to generate the same amount of risk-adjusted income.
* Decide which municipal bond ETFs to buy. Examples: CMF, CXA, HYMB, INY, ITM, PVI, NYF, PWZ, PWA, SHM, SMB, SFI.
* Invest $10-20,000 into the Yakezie Network for better user experience, interface, etc.
* Look for offshore high yielding, but stable assets given the USD will likely continue to remain weak or depreciate.
* Send $15,000 to my parents to help contribute to their home remodeling project. Good luck guys!
* Do absolutely nothing with all leftover funds and wait for what happens in the 2020 election. Trump will probably become president again.
Invest In Real Estate As Well
With $250,000 in surprise cash, I’m a buyer of real estate. Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.
My favorite two real estate crowdfunding platforms are:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends.
Both platforms are free to sign up and explore.
I’ve personally invested $810,000 in real estate crowdfunding across 18 projects to take advantage of lower valuations in the heartland of America.
Manage Your Wealth Diligently
In order to optimize your finances, you’ve first got to track your finances. I recommend signing up for Personal Capital’s free financial tools so you can track your net worth, analyze your investment portfolios for excessive fees, and run your financials through their fantastic Retirement Planning Calculator.
Those who are on top of their finances build much greater wealth longer term than those who don’t. I’ve used Personal Capital since 2012. It’s the best free financial app out there to manage your money.
What would you do with $250,000 in cash?