What to do with money?

In the past couple of years, whenever I make a financial plan that began with zeroing out my debt, I never gave serious thought to what I’d do with my money when I finally start saving. Mutual funds and the like have crossed my mind, but I’ve never gone beyond jotting these ideas down on my excel file.

This past week, though, I went to the next step: I consulted a financial person, looked at condominiums, and talked to an investment fund manager. If I don’t know what I’ll do with my savings by the time I have them, I’m pretty sure I’ll just end up spending them on a lot of useless little things.

The financial person – an uncle who has been able to buy two houses and a couple of condominium units for renting out, and who has money invested in several places, while feeding a family of four within regular private sector wages – told me that despite my currently being in a financial mess, the fact that I was trying to financially prepare for the future at my age is a good sign. He began all his investment stuff when he was already in his late 30s, and he was still able to make sure they have enough for retirement, so I can definitely do more since I’m starting 10 years earlier.

Over the weekend I looked at a couple of condos that claim to deliver a 35-40% return in your investment in as little as two years. This means that the market value of their property will increase by that much. I don’t know much about real estate, but I suppose these gains will plateau later on.

I also talked to a fund manager who was offering a low risk, low return option that historically earned 6-10% per year. Not much, but safer.

Real estate and investment funds are good options to consider, since I have to have someplace to put my money in so I not only not spend it unwisely, but actually get my money to earn for me. However, they have different pros and cons.

Real estate is a long-term commitment, while I can manage my money more if they’re just in a fund. Arguably, real estate can earn more than investment funds (especially if I’m not a risky investor), but the latter is more liquid. Also, if I get a condo, I can remove rent from my list of expenses.

Darn. I wish I had enough money to invest in both at the same time. One option is to go the investment funds route for a couple of years, and then make a huge down payment on a condo and save up on interest. But then the condos available by that time will be more expensive than the ones available now, so the interest payments I would have saved could easily be negated.

Sheesh, I’m so confused. Money really is problematic, whether you have it or not.