By Quentin Fottrell, MarketWatch
I have about $20,000 saved currently. I believe I need about $10,000, or a bit less, for a six-month rainy day/emergency fund. I have a $3,000-a-month pension. I am living with my ill father, and I am currently not working and looking for a job. I am going to college using the GI Bill.
I am almost 50, and have no 401(k) or anything. I have gone through a very bad time over the last few years and lost everything. My only debt is a $300-a-month car payment at 4% interest.
What should I do with this money?
I’m feeling the FOMO with the stock and crypto markets roaring. My money is just sitting in the bank — meanwhile, if only I had put $1,000 here or there, wow, I would have made great returns! At the same time, I don’t want to be one of those who jumps in at the peak just before markets start “correcting,” and it’s a race downhill for my investments.
I’m too old to sit and hope I can make up for the lost time by safely investing my little bit of money, and getting 5% returns on it for the next 15 years.
Thank you for any help.
<STRONG>You can email The Moneyist with any financial and ethical questions related to coronavirus at email@example.com, and follow Quentin Fottrell on <INTERNET URL="https://twitter.com/Quantanamo" LOCATION="EXTERNAL">Twitter.</INTERNET></STRONG>
<STRONG> <INTERNET URL="https://twitter.com/Quantanamo" LOCATION="EXTERNAL" /> </STRONG> Dear Bob,
If only we knew bitcoin /zigman2/quotes/31322028/realtime BTCUSD -2.62% was going to be the crypto currency. If only we knew Elon Musk, founder of Tesla /zigman2/quotes/203558040/lastsale TSLA -2.85% , would talk up dogecoin /zigman2/quotes/226077044/realtime DOGEUSD -1.00% , only to see it fall in recent days. If only we knew ethereum /zigman2/quotes/108573964/realtime ETHUSD -3.52% would be the surprise hit of the season, before that too took a tumble. If only. We’d all be rich beyond our wildest dreams, wondering why we bother with education or work.
Actually, if we all knew, most of us would be sitting on losses, licking our chops, wondering where it all went wrong.
Remember the housing bubble before the Great Recession? I recall taxi drivers in Dublin talking about their holiday home in Bulgaria. Well, that didn’t turn out so well, until things got better. Eventually. I’m not saying those two things are comparable, but I am saying it’s a dangerous game to look back at lottery jackpots and wonder how life would be different if we only knew those five numbers in the Powerball. It’s deceptive, isn’t it? Five numbers. It all seems so easy, after the fact.
Invest everything you have if you can afford to lose everything you have. Invest only what you can live without. There are no guarantees with crypto or the stock market, although the latter has shown to yield long-term returns over time, save for those bumps in the road along the way. Here’s what Bank of England Gov. Andrew Bailey said this about investing in crypto: “I’m going to say this very bluntly again — buy them only if you are prepared to lose all your money.”
‘It’s a dangerous game to look back at lottery jackpots and wonder how life would be different if we only knew those five numbers in the Powerball.’
Those caveats aside, I have some general suggestions. They’re not terribly exciting, so take a shot of caffeine. Still, they bear repeating.
Diversify your investments. But most importantly, stay true to your own risk tolerance and your own values. Seek out high-quality dividend growth stocks. Put some of your spare cash in the stock market. Dabble in crypto if you like, but again at your own peril. The same is true of the stock market. There are no guaranteed get-rich-quick schemes.
As for crypto: It’s all the rage today, while more traditional commodities like gold have had a rockier time. Crypto behaves like a commodity and, in the loosest sense that you can use it to buy stuff, it is also a currency even though it doesn’t act like one. It is also occupies the regulatory Wild West. It’s not a good place to store your cash because of its extremely volatility — and, as we’ve seen with Musk’s touting of dogecoin and his appearance on SNL, it is even influenced by the vagaries of celebrity.
The most valuable commodity we all have right now, as you suggest, is time. And you are using yours take stock of your life and look after your sick father. You will never get back that time with him. You have gone back to college and decided to invest in yourself by furthering your education. That is something no one can take away from you. No stock-market rally or cryptocurrency bounce can change that.
Take a bow, my friend. You made the best investment of all.
<STRONG>Hello there, MarketWatchers. Check out <INTERNET URL="https://www.facebook.com/groups/moneyist/" LOCATION="EXTERNAL">the Moneyist private Facebook</INTERNET><PHRASE TYPE="COMPANY" SIGNIFICANCE="PASSING-MENTION"><SYMBOL COUNTRY="US" TICKER="FB"></SYMBOL></PHRASE> group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.</STRONG>
<STRONG> <STRONG>By emailing your questions, you agree to having them published anonymously on MarketWatch. </STRONG> </STRONG> <STRONG> <STRONG /> </STRONG> By submitting your story to Dow Jones & Company, the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.