Personal Finance

How would you best invest 30K for 5 years?

  • Last Updated:
  • Sep 15th, 2010 7:50 pm
Newbie
May 28, 2008
24 posts
Canada

How would you best invest 30K for 5 years?

Hey all!

I have about 30K saved up.

I don't need it for about 5 years. What can I do with it? I've heard and read about mutual funds and gold.

Is there something better than these?

I want to maximize my return but also reasonably minimize risks.


I really appreciate all the help and advice you can give me!!! :)
24 replies
Deal Addict
Aug 21, 2009
1317 posts
58 upvotes
Saguenay
5 years? With $30k you're better off with ETFs than scam mutual funds

If anything I would put $20k in Cdn ETFs like iShares to minimize currency exchange over 5 years and keep $10k in savings acct to minimize risk. Max your TFSA with Cdn etfs and if you want some US etfs keep them outside your TFSA because they get taxed anyways

If your ETFs drop next year you could invest some of the $10k. If you don't like this than stick with a saving account

Gold has a lot of expenses so it's not good for 5 years

To be honest with the markets these days the only way to "reasonably minimize risk" is to stick with a savings acct over 5 years
Sr. Member
Apr 21, 2004
675 posts
9 upvotes
mohamedisna wrote:
Sep 6th, 2010 12:09 pm
Hey all!

I have about 30K saved up.

I don't need it for about 5 years. What can I do with it? I've heard and read about mutual funds and gold.

Is there something better than these?

I want to maximize my return but also reasonably minimize risks.


I really appreciate all the help and advice you can give me!!! :)
I would put it in a savings account with ING or Ally.
Deal Addict
User avatar
May 15, 2010
2001 posts
112 upvotes
North York
Hardaway wrote:
Sep 6th, 2010 2:49 pm
I would put it in a savings account with ING or Ally.
Then in 5 years you would have $33,122 (assuming the interest rate stays at 2%). You could have 38-40k by putting it in ETFs.
Newbie
May 11, 2009
28 posts
2 upvotes
mohamedisna wrote:
Sep 6th, 2010 12:09 pm
Hey all!

I have about 30K saved up.

I don't need it for about 5 years. What can I do with it? I've heard and read about mutual funds and gold.

Is there something better than these?

I want to maximize my return but also reasonably minimize risks.


I really appreciate all the help and advice you can give me!!! :)

Lets turn it around. How much do you want to loose ?

If the answer is 0%, then GICs probably will give the highest return for 5years.

If you don't mind loosing money then buy a Canadian Dividend ETF or individual stocks.

There is no such thing as "high returns" with "low risks".
[OP]
Newbie
May 28, 2008
24 posts
Canada
I was talking to my banks mutual funds adviser and he told me about how some people doubled their money in mutual funds over the last year.

I understand their may be some risks...but they should be within reason....the chance to loose it all is totally unacceptable.

I'm looking to multiply this amount(30K) over the span of 5 years by 2 times or more.

Thanks alot! I really appreciate ALL the input I'm getting!!!
Banned
Jul 17, 2010
3 posts
NFLD
Double or more in 5 years? Lottery tickets. The past year was an anomaly in growth after the 2008 crash, unlikely to happen again.
Newbie
May 11, 2009
28 posts
2 upvotes
mohamedisna wrote:
Sep 6th, 2010 3:16 pm
I was talking to my banks mutual funds adviser and he told me about how some people doubled their money in mutual funds over the last year.

I understand their may be some risks...but they should be within reason....the chance to loose it all is totally unacceptable.

I'm looking to multiply this amount(30K) over the span of 5 years by 2 times or more.

Thanks alot!

To double the money in 5years you need 14.4% interest compound annually. Tell me where you can get this with low risk and I can get 1 million to invest.

Also exactly which mutual fund doubled last year ? That would be 100% return. I bet there aren't too many of those. If this guy is doubling his money every year why is he working for a bank ?

As a bank employee he can borrow 10x salary at prime. He would be rich after 5years.
Deal Addict
User avatar
May 15, 2010
2001 posts
112 upvotes
North York
mohamedisna wrote:
Sep 6th, 2010 3:16 pm
I'm looking to multiply this amount(30K) over the span of 5 years by 2 times or more.
In order for that to happen you would need an interest rate of 15%. Yes that's possible with mutual funds. If you're ok with losing half or more of your 30k then I say go for it.
Sr. Member
Mar 19, 2010
918 posts
98 upvotes
Markham
high_octane wrote:
Sep 6th, 2010 1:20 pm
and if you want some US etfs keep them outside your TFSA because they get taxed anyways
Not true. Investment income earned in a TFSA is tax-free. :)
Sr. Member
Jul 29, 2009
895 posts
14 upvotes
angelok wrote:
Sep 6th, 2010 4:45 pm
Not true. Investment income earned in a TFSA is tax-free. :)

Except the 15% withholding tax the US gov will keep on US investments.
Deal Fanatic
User avatar
Oct 25, 2003
8795 posts
110 upvotes
mohamedisna wrote:
Sep 6th, 2010 3:16 pm
I was talking to my banks mutual funds adviser and he told me about how some people doubled their money in mutual funds over the last year.

I understand their may be some risks...but they should be within reason....the chance to loose it all is totally unacceptable.

I'm looking to multiply this amount(30K) over the span of 5 years by 2 times or more.

Thanks alot! I really appreciate ALL the input I'm getting!!!
Last year was an extraordinary year for returns.... So you can't really go by that....
it's me ramin.
Newbie
Sep 4, 2010
22 posts
6 upvotes
Toronto
YYC27 wrote:
Sep 6th, 2010 4:53 pm
Except the 15% withholding tax the US gov will keep on US investments.

Only on dividends.
Deal Addict
Aug 21, 2009
1317 posts
58 upvotes
Saguenay
mohamedisna wrote:
Sep 6th, 2010 3:16 pm
I was talking to my banks mutual funds adviser and he told me about how some people doubled their money in mutual funds over the last year.

I understand their may be some risks...but they should be within reason....the chance to loose it all is totally unacceptable.

I'm looking to multiply this amount(30K) over the span of 5 years by 2 times or more.
Your "mutual fund adviser" is actually a mutual fund salesperson

Did they not tell you how mutual fund dropped by even more the year before??? So really it's flat over 2 years..

Hoping to double or more in 5 years in futile...... it all depends what the short term market does. I would do a mix of savings acct and e-series. You realize the market could tank next year? In that case you want to have cash on hand to invest more, not sell. For that reason I would invest slowly rather than all at once as well
Deal Addict
User avatar
Dec 21, 2005
4716 posts
233 upvotes
Markham
MyLifeInBrampton wrote:
Sep 6th, 2010 3:27 pm
To double the money in 5years you need 14.4% interest compound annually. Tell me where you can get this with low risk and I can get 1 million to invest.

Also exactly which mutual fund doubled last year ? That would be 100% return. I bet there aren't too many of those. If this guy is doubling his money every year why is he working for a bank ?

As a bank employee he can borrow 10x salary at prime. He would be rich after 5years.

Tons of stuff "doubled" in 2009

Start with a stock that typically trades for $100+; march 2009 rolls around, and the price now drops to $50
Suppose this stock returns to normal trading prices; the return to "normal" means everyone who bought at $50 have doubled their money


As for the 14.4% compound return...if companies redeem their fixed rate perpetual preferred shares on schedule at $25 per share (i.e. most trade in the $18-22 range right now), i think you can hit ~12%+ annualized; but, if they don't redeem until 2020 or after, your return goes down to 5-7% (i.e. the stated yield on the preferreds are usually ~4-5%)
:idea: :) :lol: :razz: :D
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