- Buy Rental Property- Particularly Student Rental
Some places you just need $10,000 down payment
2. Buy a great used car
Check out these three picks for $10,000 from Patrick Olsen of Cars.com:
- 2008 Ford Fusion: The roomy Fusion— which is “great for a small family running errands around town,” according to Olsen—has a V-6 engine and gets about 23 miles per gallon.
- 2008 Kia Sportage: While no-frills, the Sportage is one of the few quality SUVs at this price point. “It’s good for small-business owners and parents whose kids play sports,” Olsen says.
- 2007 Toyota Prius: This second-generation Prius “is good for those who have a long commute,” says Olsen. “You’ll save a lot of money on gas.” It gets 46 mpg.
3. Give your investments a boost
Research has demonstrated that certain stocks—those that regularly grow dividends, have stable prices, are undervalued compared with fundamentals, or have recently appreciated—tend to outperform. Split your $10,000 among these characteristics as follows:
- Dividend growth: SPDR S&P Dividend SDY 0.23% 1-year return: 10.4%
- Value: PowerShares FTSE RAFI U.S. 1000 PRF 0.86% 1-year return: 16.1%
- Low-volatility: iShares MSCI USA Min. Volatility USMV 0.09% 1-year return: 12.2%
- Momentum: SPDR S&P 1500 Momentum Tilt MMTM -0.31% 1-year return: 16%
4. Chase a market sector before it’s over
Since we’re late in the sixth year of the bull market, many analysts think it’s nearing the end. Certain sectors perform well in the last year of a bull run, including energy (34% average returns in last year of bull), health care (27%) and tech (23%), according to research by Ned Davis. Both energy and technology companies have a lower forward p/e than the S&P 500, and are expected to outgrow the market over the next five years. Meanwhile, “the outlook for the health care sector is promising,” says Eddie Yoon, a portfolio manager and research analyst for Fidelity Investments, “based on factors including an aging global population, an expanding middle class in many emerging markets, and a strong product innovation style.” Look to Money 50 funds Sound Shore SSHFX -0.34% , which allocates almost half of its holdings to energy, technology and health care, and Primecap Odyssey Growth POGRX -0.49% , which has two-thirds of its holdings in health care and technology companies.
5. Invest in the frontier
BRICS is so 2012. With emerging markets countries (recent case in point: Russia) struggling to sustain economic growth, it may be time to look toward faster growing smaller countries (like Ghana and Vietnam). These “frontier” nations have been expanding fast: iShares Frontier 100 FM 0.89% is up 15% this year, but is still less expensive than the S&P 500. (The MSCI Frontier Index forward p/e is 13.6). Moreover, an index of frontier funds has actually been less volatile over the past 15 years than its emerging markets counterpart, says Morninstar’s Patricia Oey.
6. Sprechen Deutsche
If you work for a firm that does business internationally, becoming fluent in another language may pay off. A second language is correlated to an average 2% to 3% increase in annual income, according to research from Wharton and LECG Europe. Chinese provides the highest return. But if you don’t have it in you to learn an entirely new alphabet—and your company is trying to land clients in Deutschland—try learning German, which is correlated to 4% higher pay. One way to get up to speed: A language vacation. LanguagesAbroad.com offers language immersion programs for travelers in 35 countries. An intensive two-week course with 20 group lessons and 10 private lessons in Berlin is $2200, not including airfare or accommodations. On a $100,000 current salary, it would only take you three years to recoup a $10,000 investment.
