Ask HN: How would you invest $50,000?
I am in a financially secure position. I have no debt, I am single, no mortgage to pay, and no need to work (although I do it anyway because I enjoy it). I am not "super" wealthy either. Rather than having money sitting in the bank, I've decided to invest $250,000. $200,000 will go into vanilla/convserative investments. But with the remaining $50,000 I'd like to try something a bit more interesting. I have unlimited risk tolerance for the $50k, provided the investment has "home-run" type upside.
1. Excluding angel investing, what would you do?
2. Assume you have zero experience angel investing, but have a capable technical background. What do you do? How would you build an angel brand for yourself?
100 comments
[ 27.7 ms ] story [ 1391 ms ] threadI'm happy to set aside a small amount of money as a catalyst for progress, and thankful that others are doing the heavy lifting.
(Apologies for continuing this off-topic line of conversation.)
Pick what you like best and dive in - in whatever capacity you choose.
For #2, if you don't want to spend the serious time and money (because you will lose some money while learning) becoming a angel investor, consider investing in a fund that does angel size investing. David Cohen of TechStars runs a small fund that does seed stage investing, and I'm sure you can find others as that is a hot area.
PS: This is also why most VC funds make so little money for the investors.
> What you want is a 1 in 3 chance of a 30x return within 5 years Obviously, that will be hard to find. If you did 100 of those, you'd be getting a 10x return in 5 years.
My original question to the poster stands. Are you looking for a real long shot, or something with a decent chance of paying off?
I do like the idea of investing in an angel fund to get my feet wet. I'll consider that.
I have a lot more research to do before I pull the trigger, but I'm planning to throw a couple grand in this direction myself.
Here's a full article about one of the guys they profiled: http://www.vanityfair.com/business/features/2010/04/wall-str...
2. I understand your frustration. There's just nothing out there for the beginning angel. As you can tell from most of the answers here-- there really isn't a good answer. You're too rich to have the money sitting in a bond fund, and too poor to be Paul Graham. You're stuck in the middle, and the investments market (right now) doesn't have a home for you. You're also a prime target for some get rich quick investment schemes, so you ought to be careful.
1. You need to be situationally positioned well to get decent dealflow.
2. You need to invest in many deals; I have been told that profitable angels do 10+ deals a year.
3. Low-end slices are typically $25k and up. It's a lot of work for companies to wrangle a large number of investors so minimizing that number is to their advantage.
4. It can take YEARS to return anything at all. I've invested in 24 startups since 2007; one exited so far.
The 'typical' route you'll be steered toward are real estate investments. There's a whole world of exotic financial instruments I had never heard of before coming into money, but real estate is probably the most popular, since it seems so familiar to most people. This is what we did. In 2007. Yeah... =) It paid off in the end, surprisingly, but it was a close thing.
The best advice I can give you is to invest in things you understand. If you have enough experience with startups to judge them critically, angel investing may be your best option. Putting your money into something you don't understand is little better than gambling.
Track down the most talented people you can find working on that unfairly underserved idea and make it your cause.
2) If you want to consider angel investing alongside me, email me.
You might as well advise him to take his money to the dog track. It's better odds and more fun.
Or better still, "No. You should take it all out in twenty dollar bills, box it up and send it UPS to that Expat Software guy." I'd back you up on that one.
- $40k into an Index Fund tracking the S&P 500
- $10k into a Six Month Trip Around Southeast Asia
Chances are you're not going to hold onto that Single, No-Mortgage thing very long. If you haven't done much traveling, it's probably best you get out there now to see what you're missing.
You definitely have the right idea with getting your debt sorted and starting the retirement investment stuff early. You're never going to be in a place where excess money comes in so fast, and it's physically impossible to get into a place where your investments have longer to compound.
But then you're also in a place where you can afford to squander a bit of that advantage to go have some fun. Send us a postcard!
Totally worth it. I'd go back now, if I wasn't dead broke.
$50,000 = annual salary of 3-4 employee team.
Get them to make iphone apps, android apps, facebook games.
If you go with a 4 people team, the division should be: 3 developers and 1 marketer. And one of them handles everything for a bit higher salary and a very small equity stake.
If you had $100,000-$200,000 to invest, I would get the team to flip websites. You buy the websites (with the remaining $50,000 to $150,000). They make it better with new features / redesign etc and then increase traffic to it for 4-6 months. You then re-sell the websites.
In this instance, I would go with: 2 developers and 2 marketers.
hey its worth a shot :)
I haven't tried this investment myself yet (insufficient funds) but I'd be interested if I had the money spare.
Warning: I'm not sure about how this works in the US, but here in the UK I'd have to obtain a consumer credit act license for lending more than 25k.