Best $100k investment with monthly payout?

nakamori

nakamori

40
96
Joined
Sep 6, 2012
Hey Bretheren,

I came about a $100k windfall and I'm struggling with what to do with it... a little background:

My Mom's mortgage payment is about $1100, and I know that 1% monthly return isn't realistic but I would like to set up a plan that would be able to help out with a good chunk of that amount each month.  Even a 5% yearly return that allows for monthly withdraws of interest would cut her payment by more than $400.  This is really important to me - my mom really struggles with keeping her jobs (~7 in the past two years, no joke) and even with that manageable mortgage she is pretty much going paycheck to paycheck.  I obviously help out but I want to set something up that's sustainable for both her and me.  My regular job's pay is pretty mediocre, especially for where i live  and I'm at an age where I need to start thinking for my own financial maturity.

Paying directly into the mortgage principal isn't also a bad option since my Mom is of reverse-mortgage age so the funds are pretty liquidable, and we live in a pretty good housing market. This would probably cut the payment by around the same amount but i was wondering if there was an investment that could enable me to keep that lump sum and use the interest.  

I was looking into a CD ladder plan but that return just isn't good enough...

Anyone have ideas?

-Nak
 
Last edited:
Take 80 and go mutual...

Get solid returns... Might get more because the market is bullish since the low point in 2010.

Take the other 20 and day trade. Try and get your swag up.
 
What is interest rate of mortgage?
Click to expand...
@nrg1604  It was a HAMP refi so I think she's at 2% for now... but the rate is differed to like 5% after a few years... payments worked out to $1100 right now and $1400 after the rate increase.
Take 80 and go mutual...

Get solid returns... Might get more because the market is bullish since the low point in 2010.

Take the other 20 and day trade. Try and get your swag up.
Click to expand...
@Fontaine  I do have a roth IRA that's doing pretty well this year - So I am more aggressive in that way for my own savings. 

I guess I'm trying to use this money to set up a sort of trust fund with a stable if unspectacular return rather than something that's super exposed to the market...
 
How much time is left on that mortgage?

If you have a 100k and want to be solid I'd highly suggest these 4 companies and getting the dividends:

AT&T, Inc
Consolidated Edison, Inc
Chevron Corporation
The Chubb Corporation.

AT&T's dividend I think $1.84 (and they've raised this every year for 25 years in a row). If you invested all 100k into AT&T and simply collected the dividends it comes out to about $5k a year I think. That is awesome + the stock may increase in the future. They will/have/are going to continue international expansion.

in the mean time keep an eye on it while collecting dividends...

Buy at $36 for about 2,800 shares ~ a little over 100k. Wait until it randomly hits $40+ and sell it (which it will for some reason or the other...just gotta keep an eye on it). That's a minimum $11,000 return.

That is your safest option in my opinion.

Personally, what I would do is split it into thirds and invest in 10 different companies (5 safe, 3 medium risk, 2 high risk). The 5 safe ones should all give dividends in my opinion. That is a very strong signal of maturity > growth. The rest should not by the same rationale.

Personally, I believe Tesla is going to crush it. If I had monies I'd invest everything into them. In my mind, barring some huge disaster such as lawsuits from their batteries etc, there growth is limitless. They are at the forefront of technology, have a good management strategy, and have a bunch of sheep (similar to Apple) that will continue making them the industry standard regardless of whether better cars etc come out. Actually, moreso than the cars...i think the tech + efficiency they are developing is their core competency when looking at it from a 5+ year perspective.
 
ModernDarwin said:
How much time is left on that mortgage?

If you have a 100k and want to be solid I'd highly suggest these 4 companies and getting the dividends:

AT&T, Inc
Consolidated Edison, Inc
Chevron Corporation
The Chubb Corporation.

AT&T's dividend I think $1.84 (and they've raised this every year for 25 years in a row). If you invested all 100k into AT&T and simply collected the dividends it comes out to about $5k a year I think. That is awesome + the stock may increase in the future. They will/have/are going to continue international expansion.

in the mean time keep an eye on it while collecting dividends...

Buy at $36 for about 2,800 shares ~ a little over 100k. Wait until it randomly hits $40+ and sell it (which it will for some reason or the other...just gotta keep an eye on it). That's a minimum $11,000 return.

That is your safest option in my opinion.

Personally, what I would do is split it into thirds and invest in 10 different companies (5 safe, 3 medium risk, 2 high risk). The 5 safe ones should all give dividends in my opinion. That is a very strong signal of maturity > growth. The rest should not by the same rationale.

Personally, I believe Tesla is going to crush it. If I had monies I'd invest everything into them. In my mind, barring some huge disaster such as lawsuits from their batteries etc, there growth is limitless. They are at the forefront of technology, have a good management strategy, and have a bunch of sheep (similar to Apple) that will continue making them the industry standard regardless of whether better cars etc come out. Actually, moreso than the cars...i think the tech + efficiency they are developing is their core competency when looking at it from a 5+ year perspective.
Click to expand...
thats a big risk to do that. He could lose his 100k overnight . Now if he wasnt depending on this 100k and had other funds as well maybe,but since op just got this 100k i dunno
 
unsure where you live, but may consider a single family rental which can yield you a 20-25% cash on cash return, not only that you get equity built up by the tenant paying down your principle

Here is a cash flow analysis on a property that you can purchase @ 80k, 20% down, 5.5% rate, renting at 1025/month
[table][tr][td]Est. market $
- no foreclosures[/td][td]  [/td][td]  [/td][td]Seller contribution[/td][td]  [/td][td]  [/td][td]Repairs/make-ready[/td][td]  [/td][td]  [/td][td]Prop ins annual[/td][td]  [/td][/tr][tr][td]Est. market $
- with foreclosures[/td][td]  [/td][td]  [/td][td]Survey[/td][td]  [/td][td]  [/td][td]HOA annual[/td][td]  [/td][td]  [/td][td]Rent[/td][td]  [/td][/tr][tr][td]Purchase price[/td][td]  [/td][td]  [/td][td]Appraisal[/td][td]  [/td][td]  [/td][td]Prop tax annual[/td][td]  [/td][td]  [/td][td]  [/td][td]  [/td][/tr][/table][h3]Conventional financing[/h3][table][tr][td]
[table][tr][td]Down payment %[/td][td]  [/td][/tr][tr][td]Loan term in years[/td][td]  [/td][/tr][tr][td]Interest rate %[/td][td]  [/td][/tr][tr][td]Lender & title fees[/td][td]  [/td][/tr][tr][td]# mo's tax & ins[/td][td]  [/td][/tr][tr][td]Mtg ins annual[/td][td]  [/td][/tr][tr][td]Show conventional[/td][td]  [/td][/tr][tr][td]  [/td][/tr][tr][td]
calculate conventional now
[/td][/tr][/table]
[/td][td]
[table][tr][td][table][tr][td]Gains and returns[/td][/tr][tr][td]Unrealized capital gain[/td][td]3,608[/td][/tr][tr][td]Annual cash-flow[/td][td]5,688[/td][/tr][tr][td]Return on capital gain[/td][td]15%[/td][/tr][tr][td]Cash-on-cash return[/td][td]24.2%[/td][/tr][/table][/td][td][table][tr][td]Cash-flow[/td][/tr][tr][td]Monthly rent[/td][td]1,025[/td][/tr][tr][td]Note payment[/td][td]368[/td][/tr][tr][td]Property tax[/td][td]103[/td][/tr][tr][td]Property insurance[/td][td]68[/td][/tr][tr][td]Mortgage insurance[/td][td]0[/td][/tr][tr][td]HOA[/td][td]12[/td][/tr][tr][td]TOTAL[/td][td]474[/td][/tr][/table][/td][td][table][tr][td]Cash out-of-pocket[/td][/tr][tr][td]Down payment[/td][td]16,200[/td][/tr][tr][td]Closing costs[/td][td]2,284[/td][/tr][tr][td]Repairs/make-ready[/td][td]5,000[/td][/tr][tr][td]TOTAL[/td][td]23,484[/td][/tr][/table][/td][/tr][/table][table][tr][td]    [/td][td]Formulas:[/td][/tr][tr][td]  [/td][td]Unrealized capital gain*[/td][td]  = Est. market - (Purchase + Survey + Appraisal + Repairs + Lender fees)[/td][/tr][tr][td]  [/td][td]Annual cash-flow[/td][td]  = Monthly cash flow * 12[/td][/tr][tr][td]  [/td][td]Return on capital gain[/td][td]  = Unrealized capital gain / Cash out of pocket[/td][/tr][tr][td]  [/td][td]Cash-on-cash return[/td][td]  = Annual cash flow / Cash out of pocket[/td][/tr][tr][td]  [/td][td]
* Capital gain is different than equity. Capital gain is the difference between what was paid for the asset (the basis) and what was received when it was sold (amount realized). Capital gain taxes are of course derived from the capital gain, not the equity. Read this for more information: http://bit.ly/g7BJZj
[/td][/tr][/table]
[/td][/tr][/table]
 
Last edited:
I like T long term but you never wanna go all in on a stock if you're not a proven trader/investor.

You never want blow out risk.

Manage your risk and be smart. The economy isn't as good as you think it is and that 100k could be lost in a week's time if you aren't smart with it.
 
Last edited:
L7OSER said:
Give me 10G's and I can make 20 more 10G's with that.....................
Click to expand...
spitta 
nthat.gif
 
dtothedtotheo said:
unsure where you live, but may consider a single family rental which can yield you a 20-25% cash on cash return, not only that you get equity built up by the tenant paying down your principle
Here is a cash flow analysis on a property that you can purchase @ 80k, 20% down, 5.5% rate, renting at 1025/month

[table][TR]
[TD]Est. market $

- no foreclosures[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Seller contribution[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Repairs/make-ready[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Prop ins annual[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Est. market $

- with foreclosures[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Survey[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]HOA annual[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Rent[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Purchase price[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Appraisal[/TD]
[TD] [/TD]
[TD] [/TD]
[TD]Prop tax annual[/TD]
[TD] [/TD]
[TD] [/TD]
[TD] [/TD]
[TD] [/TD]
[/TR]
[/table][h3]Conventional financing[/h3]

[table][TR]
[TD]

[table][TR]
[TD]Down payment %[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Loan term in years[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Interest rate %[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Lender & title fees[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]# mo's tax & ins[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Mtg ins annual[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD]Show conventional[/TD]
[TD] [/TD]
[/TR]
[TR]
[TD] [/TD]
[/TR]
[TR]
[TD]

calculate conventional now
[/TD]
[/TR]
[/table]

[/TD]
[TD]

[table][TR]
[TD]
[TABLE]
[TR]
[TD]Gains and returns[/TD]
[/TR]
[TR]
[TD]Unrealized capital gain[/TD]
[TD]3,608[/TD]
[/TR]
[TR]
[TD]Annual cash-flow[/TD]
[TD]5,688[/TD]
[/TR]
[TR]
[TD]Return on capital gain[/TD]
[TD]15%[/TD]
[/TR]
[TR]
[TD]Cash-on-cash return[/TD]
[TD]24.2%[/TD]
[/TR]
[/TABLE]
[/TD]
[TD]
[TABLE]
[TR]
[TD]Cash-flow[/TD]
[/TR]
[TR]
[TD]Monthly rent[/TD]
[TD]1,025[/TD]
[/TR]
[TR]
[TD]Note payment[/TD]
[TD]368[/TD]
[/TR]
[TR]
[TD]Property tax[/TD]
[TD]103[/TD]
[/TR]
[TR]
[TD]Property insurance[/TD]
[TD]68[/TD]
[/TR]
[TR]
[TD]Mortgage insurance[/TD]
[TD]0[/TD]
[/TR]
[TR]
[TD]HOA[/TD]
[TD]12[/TD]
[/TR]
[TR]
[TD]TOTAL[/TD]
[TD]474[/TD]
[/TR]
[/TABLE]
[/TD]
[TD]
[TABLE]
[TR]
[TD]Cash out-of-pocket[/TD]
[/TR]
[TR]
[TD]Down payment[/TD]
[TD]16,200[/TD]
[/TR]
[TR]
[TD]Closing costs[/TD]
[TD]2,284[/TD]
[/TR]
[TR]
[TD]Repairs/make-ready[/TD]
[TD]5,000[/TD]
[/TR]
[TR]
[TD]TOTAL[/TD]
[TD]23,484[/TD]
[/TR]
[/TABLE]
[/TD]
[/TR]
[/table]
[TABLE]
[TR]
[TD]   [/TD]
[TD]Formulas:[/TD]
[/TR]
[TR]
[TD] [/TD]
[TD]Unrealized capital gain*[/TD]
[TD] = Est. market - (Purchase + Survey + Appraisal + Repairs + Lender fees)[/TD]
[/TR]
[TR]
[TD] [/TD]
[TD]Annual cash-flow[/TD]
[TD] = Monthly cash flow * 12[/TD]
[/TR]
[TR]
[TD] [/TD]
[TD]Return on capital gain[/TD]
[TD] = Unrealized capital gain / Cash out of pocket[/TD]
[/TR]
[TR]
[TD] [/TD]
[TD]Cash-on-cash return[/TD]
[TD] = Annual cash flow / Cash out of pocket[/TD]
[/TR]
[TR]
[TD] [/TD]
[TD]

* Capital gain is different than equity. Capital gain is the difference between what was paid for the asset (the basis) and what was received when it was sold (amount realized). Capital gain taxes are of course derived from the capital gain, not the equity. Read this for more information: http://bit.ly/g7BJZj


[/TD]
[/TR]
[/TABLE]

[/TD]
[/TR]
[/table]
Click to expand...
where are you going to find someone willing to pay 1025 on something worth 80k?


Also... Managing the property... Repairs... And depending on what part of the country you're in, houses don't appreciate on value.

Take Texas...

The home are cheap because they don't skyrocket in value y.

They just keep building north.
 
Last edited:
Sell her house, get a FHA loan for an apartment complex that you'll/her will live in. Something 1-4 units, with her you already have one tenant. 

I don't have any calculations on it and I know its going away from the simple thing you want, but it could really pay dividends down the road.
 
being a landlord is great stream of income. love real estate when it could be afforded.
 
Last edited:
build a server farm and start mining for bitcoins.  you won't lose any money.....you will only be in the +  

when or if you want out...you can resale the servers or host other things w/them to make $$$
 
nakamori said:
 
Hey Bretheren,

I came about a $100k windfall and I'm struggling with what to do with it... a little background:

My Mom's mortgage payment is about $1100, and I know that 1% monthly return isn't realistic but I would like to set up a plan that would be able to help out with a good chunk of that amount each month.  Even a 5% yearly return that allows for monthly withdraws of interest would cut her payment by more than $400.  This is really important to me - my mom really struggles with keeping her jobs (~7 in the past two years, no joke) and even with that manageable mortgage she is pretty much going paycheck to paycheck.  I obviously help out but I want to set something up that's sustainable for both her and me.  My regular job's pay is pretty mediocre, especially for where i live  and I'm at an age where I need to start thinking for my own financial maturity.

Paying directly into the mortgage principal isn't also a bad option since my Mom is of reverse-mortgage age so the funds are pretty liquidable, and we live in a pretty good housing market. This would probably cut the payment by around the same amount but i was wondering if there was an investment that could enable me to keep that lump sum and use the interest.  

I was looking into a CD ladder plan but that return just isn't good enough...

Anyone have ideas?

-Nak
Click to expand...
Not to be a hater, but if you're mom is that unstable with jobs, throwing money at the mortgage is the least of the problem. There's some underlying problem why she can't keep a job more than 4 months. I would invest in some sort of financial and/or personal management course for her to learn responsibility and how to handle finances.

Regarding the money, it's really about what you're knowledgeable about. There are plenty of investment options available, but NEVER invest in something you don't understand no matter how good the returns seem. Real Estate can be great, but if you don't know what you're doing, it can become a money pit in a hurry. I've been looking into debt investment, but am still on the fence. Earnings range from 5% to ~17% depending on your risk level. Diversified mutual funds are also another good option to consider.
 
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