Comment by Kaizyn | Hacker News Reader

Comment by Kaizyn | Hacker News Reader

The only way to make it grow is through investing it. The more risk you take on, the higher it has the chance to grow. However, at the same time you have an increased risk that you'll lose your investment.

A money market account is safe and leaves your liquid assets in a state where you can get them easily. The downside is a poor rate of return.

Tax-exempt bonds (local, state or federal) are an attractive option provided that the rate of inflation doesn't exceed your rate of return or reduce it to effectively nil.

Another sensible option would be to pay off any debts you have. Your income is your best way to grow wealth, and every dollar you pay in interest is a dollar taken away from your future earnings. Even though this isn't as exciting an option as putting your money in the stock market, this might be your best bet longer-term.

If you have no debt, then the $50k would go a long way towards a down payment on a home - that way you can stop paying rent, which is another source of wasted earnings.

I agree with the rest of the advice, but buying a home is not a good investment in all parts of the country/world, nor at all times. A home you own decreases your mobility and thus your employment options, especially if the labor or housing market in your area plummets in the future.

In other markets, home ownership and all its associated costs (including property taxes and maintenance) is more expensive in both the long and short term than renting.

For instance, for what I pay in rent in NYC (PLUS a down payment), I would have to commute at least 3 times as long to afford to buy an equivalent home. And also have to add the responsibility (in time and expense) for maintenance - from upgrading the plumbing to shoveling snow from the sidewalk.) Further, it'd be much more difficult to see friends, whom I'd no longer live near. That's all time that could instead be spent with friends and family, being healthier, or even making money on a side project or freelancing.

And if you get poor terms on your mortgage (think variable rate loans), you're just setting yourself up for pain.

"The more risk you take on, the higher it has the chance to grow."

Not true, and it's often opposite where higher risk means a higher overall worse performance. You can also do more homework than others, and/or have more patience than others.

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