Ask HN: How would you invest $600k for only 2 years? | Hacker News Reader

Ask HN: How would you invest $600k for only 2 years?

12 pointsbsvalley18 comments

How would you invest $600k in the US while being on a 2-year break overseas? I'm selling my house so real estate isn't something I'd consider. Too painful to get your money back after real estate fee, etc. in only 2 years. The goal obviously is low risk investment and something that would generate at least 2% return per year. Not looking for crazy gains here and yeah, I already have some money in crypto guys ;)

Open to any suggestion

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For just 2 years, I'd do a 2-year CD. Stock market could be down in 2 years, who knows. Crypto could be...well just forget that. You could maybe invest in some turnkey coin car wash or laundry mat, I've heard they make money.

Can you get a better overall rate by doing shorter term CDs and reinvesting at the end, hoping the rates have gone up a bit? Or is 2 years not enough time for that to have any real effect?

That might not be a bad idea right now. CD interest rates go up as the Federal Reserve interest rate goes up, and it's likely that the Fed Reserver rate will be going up soon. However, I'd do some historical research to see if that could actually turn out to be helpful, or if the difference between 6-mo, 1-yr, and 2-yr CDs is too large.

https://www.peerstreet.com/

Short term loans backed by real estate. Should get you 7 to 10% per year. Started by ex-google guys. I have about 100K with peerstreet and it is performing well.

They have never had a default.

Podcast with the founders: http://mebfaber.com/2016/12/07/episode-32-guest-brew-brett-p...

Wow seems too good to be true. Low LTV loans at a high interest rate. Poor borrowers, why do they do it? They should just get a mortgage with an offset if such things exist in US, then just spend whatever they need at a reasonable rate.

Buy a bond fund and call it a day. more returns than a CD and just a tad more risk.

I don’t know. My bond funds are down last couple of years with these low interest rates. With interest rates starting to rise, they should be going up, but still don’t see it yet. Maybe there is a lag of bond fund prices to interest rate rises.

Think its the other way round. Rates fall. Fixed income bonds rise in value.

Got a link to the ones you are invested in that are down?

Even though you’re looking for low risk I’d consider US stock market in an index fund. Sure it’s possible it will have a couple down ears but the chance of 5-10% gains each year may be worth it. At 2% you are just barely keeping up with inflation, and may be falling behind asset inflation (real estate in particular) if you care about that.

Looks like you don't know what you are doing, so the lowest risk is to park in the bank and get whatever interest you can get...

The other option is to spend the time and educate yourself on different investment strategies and how you can define your risk and invest in the stock market, index fund or stocks, etc..

I have been doing this for years from short term stock trading robots to long term tax deferred pension funds with more money than your budget and with double digits yearly return on average, but I know what I am doing and what my risk is and how much exactly I am going to lose, if I have to move everything to cash...

Also 2 years is very short time frame, e.g. if you lose after first year, the next might not be enough time to make it back...

I would suggest speaking with a tax attorney. Depending on how long you've owned it, and how much you paid for it, the sale of your house may constitute income, which would be taxed at 39.6% and (at this level) also subject you to the AMT.

That may limit some of your options. If it turns out your sale isn't tax exempt, renting the property out through a property management firm or reinvesting in real estate may make the most sense. Otherwise I'd echo what others have said, some sort of CD.

I forgot to mention it's $600k net after capital gains tax, real estate fee, etc.

High interest e savings could get you close to 2%. But you you would have to split the money into amounts at different institutions that are FDIC insured.

Or I would think with that amount of money you could walk into a number of major banks and negotiate a 2 year, 2% rate.

Check out fundrise or other real-estate crowdfunding (I know you said no real-estate, but it's not really the same thing). I'm not an expert on that stuff but it seems like an interesting way to invest.

> The goal obviously is low risk investment...

That's not obvious at all. One's risk appetite is very personal.

I would chop it up into three equal parts and do three different high risk investments. But I'm crazy.

What are you planning to do with the money when you return?

Bank mutual fund is probably your best bet but if you don't want any risk then go a 2 Year Treasury note. You'll earn a little under 2%.

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