60k cash from 2 years banking -- options?

DavidKappoKaplan's picture
Rank: Baboon | 174

Fellow monkeys and ex-monkeys,

I left my investment banking position after 2 years to travel and look at options outside of finance. I'm not here to discuss why I left but rather what to do with the 60k cash I was able to put aside.

I plan on taking a few contract like jobs for the next year, and travel a bit while thinking about potentially starting my own business. The contract work will essentially cover my housing and travel expenses, so that I don't dip into the 60k.

Have any of you been in similar situations? As I see see it now, some of the main options are as follows:

* Invest in equity: I'm of the belief that equities are at all time highs and don't think it is an optimal choice, as I will likely want to access the money in the next 3-5 years. I think investing in equities with an ETF strategy, with regular monthly contributions (benefiting from dollar cost averaging etc), can be a good strategy for those who have a 10 year+ horizon and regular money coming in to contribute. This is not my case.

* Lower risk (Bonds, Term deposits, GICs): Some of these options might make sense, however most term deposits / high interest savings account won't even cover inflation. Not too keen on the bond market either with interest rates only going one way.

* Buying property: Will be tough to get a mortgage as I no longer have a steady job. No properties to be purchased outright in cash for 60k in my area (one of the most expensive cities in North America).

Any thoughts on the above or other options you would consider if you were in this situation?

Look forward to discussing.
DKK

Comments (25)

Nov 12, 2013

Wow. What city / how much did you make total?

Nov 12, 2013

Why wow?

Nov 12, 2013

You're holding 60K in cash....the real question is why? You literally just missed out on 20%+ returns...

Nov 12, 2013
GoIllini:

You're holding 60K in cash....the real question is why? You literally just missed out on 20%+ returns...

Could be that those returns are the reason he's sitting on 60k I guess. OP?

Nov 12, 2013

Cash it all out in singles and make it rain

    • 1
Nov 13, 2013
Kassad:

Cash it all out in singles and make it rain

I'm in favour of what Kassad said. Either that, or, wait for the pullback and dump it into some steady dividend paying companies.

Don't listen to anyone, everybody is scared.

Nov 12, 2013

If you want RE exposure invest in publicly traded REITs. Don't sink all your savings (plus the debt you'll acquire) into a single hard, illiquid, labor-intensive asset.

Nov 12, 2013

Also for everyone else:

how much money did you guys walk away with (in cash and reasonably liquid assets) at the end of your first two years? just curious...

Nov 14, 2013

There's a big range between 0-100k (approx.) from my own Analyst class. The average being around 40-50k. This is from a pretty small sample size, but I think it gives you a decent idea.

Nov 12, 2013

ER in regional area. i'm 2.5 years out of UG and have saved $80K (including 401K)

Nov 12, 2013

If your gonna need that cash in a year or so, I wouldn't personally even worry about putting it in the market. Unless, of course, you plan on making strategic investments with a smaller time frame, but that's not the case here.

Sure you're gonna lose a small bit off from inflation, but you probably would have lost that from a few days in the markets anyways. And I definitely wouldn't worry about hard assets until your in the $1mm+ ballpark. Just too illiquid and you're gonna need that cash.

    • 1
Nov 12, 2013

Not so sure I would put bonds in the low risk category...especially mid to short duration.

If the glove don't fit, you must acquit!

Nov 12, 2013

Yeah. $60K is not much of a nest egg or savings.

You need to focus on getting a job and conserving capital.

Nov 12, 2013

$60k is a pretty great start for two years of work.

At any rate, build a balanced portfolio of international and domestic stocks and bonds in whatever mix fits your risk profile with some of that cash.

Nov 13, 2013
Governor Caesar:

$60k is a pretty great start for two years of work.

At any rate, build a balanced portfolio of international and domestic stocks and bonds in whatever mix fits your risk profile with some of that cash.

It's ok.

The problem is that OP doesn't have a job.

He needs to get a job and start cutting expenses.

Nov 12, 2013

invest in SEA property. gnite.

Nov 13, 2013

If the glove don't fit, you must acquit!

Nov 13, 2013

Gonna make it hail is this biatch

Nov 14, 2013

.... in a similar situation but still working (BB IBD analyst) .... don't feel good about the equity market highs and also anticipate liquidity needs in the next 2-4 years. Have about $80k looking to deploy. Any thoughts?

Nov 14, 2013

.

Nov 14, 2013

Thanks for all the replies guys (and girl?).

To add more color, I worked at a BB in a major financial city. I would say I saved slightly more than most of my colleagues. One thing that is shocking is how useless a lot of the junior bankers are at managing their personal savings (like myself). When you're working in IBD, it's tough to find time to actually manage the money you earn. Whether it's dealing with the red tape at a local bank, or staying on top of the markets. I definitely did not position myself to take advantage of any 20%+ annual return investment opportunities.

I agree that 60k is not a massive nest. I have slashed all costs since quitting. I am definitely looking at money generating opportunities, but I am definitely leaning more towards an entrepreneurial path. As some suggest, I will likely keep it in safe ST investment products, so I can access it as needed.

Nov 14, 2013

You wouldn't have had to "position" yourself to make 20%... You could have put it all in a S&P index fund and made that much man.

By the way, you're no longer a banker. Get "to add more color" out of your vocabulary before it's too late!

Nov 15, 2013

Given the majority of this nest is from the final bonus I received just before quitting, this 20% is not actually something I could have hugely capitalized on. I get where you're coming from though.

I concede on your second point. My only rebuttal is that there are several banker terms I hate a lot more than that one!

Nov 15, 2013
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Nov 15, 2013
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We're running out of oil....sike!