What’s the best way to invest for a year?[ Edited ]
Hi, I recently sold my home and made about a $70,000 profit. Unsure of where we want to settle we plan to stay with family for about 1 year. My question is, what is the best way to invest the profit we made? Thank you.
Congratulations...First on selling your house! Second on selling it for a $70k profit! And third, for presumably being able save a bunch of money by living with family for about a year! Talk about your sweet personal finance triple play…this is awesome!
Accentuate the Positive
And believe it or not, I think the best approach to keeping things awesome is to stop right there. I wouldn’t even try to invest your profits for a year if I were you because there’s just too much of a risk that you might end up with less money than you have right now. Sure, you could also get lucky and end up with more but when you’re investing money in the markets, there’s no guarantee you’ll win. It’s all a calculated risk and the risk increases exponentially when the investing time frame is as short as yours. So again, I won’t do it.
Instead, I’d be inclined to keep the money in something very safe and stable like a savings account or a short-term CD. I realize that neither of these choices is paying much of anything these days but personally, I’d be ok with that to have the security that my money will be there when I need it. Generally speaking, investing should be a long-term proposition and you just don’t have a long enough term.
So I say, keep your awesome streak going by keeping your money out of harm’s way. After all, lost upside potential is usually a lot less painful than lost actual money.
Thanks so much for your question and good luck to you. May the happy times keep on rolling!