Expert: Paul Henneman - 3/15/2010

Question
My husband and I have about $250,000 that we would like to make into a larger amount.  We've been looking at buying a business but it doesn't seem as though the profit is large enough (with the businesses we've looked at anyway).  We are in Alberta, Canada by the way.  Do you have any suggestions on how we can make this $250,000 into an amount we can semi-retire with?  There's got to be an investment somewhere that we can profit from.

Answer
Candi,
  Thank you for your question!
Unforunately this is a huge topic, but perhaps I can offer a few things to get you started. First, every investor is different. The more risk you take, the higher the possible returns. But, those riskier investments can also go against you. For example, buying a business is very risky. Many fail, leaving investors with nothing to show for their time and end up actually losing most or all of what you put in. Some businesses do thrive, but find the right one is the key. Even experts that spend their lives seeking out small businesses to invest in do not get it right every time. There is real risk.
   Other investments include stocks, bonds, mutual funds, ETF's, real estate, the list goes on. Each investment has a different profile regarding how high the risk is, and what kind of returns it can offer. You say that you want to grow the $250,000 into a larger amount, but a great deal depends upon how much you want to grow that money into. If you want to turn $250,000 into one million in a few years for example, you will have to take on some very risky investments. So risky in fact that there is actually a greater chance that you will lose money rather than make it.
   Successful investing, in my opinion, takes time and discipline.  I don't know what your time horizon is, but if you are looking out 20 years our more, you could take your $250,000 and easily turn it into a few million with relatively little risk.
   I would suggest getting a copy of "Investing for Dummies", available on Amazon and in most major bookstores. This book goes through most forms of investment, and with this you could begin to define exactly what it is you are trying to achieve. You need to develop set specific goals as the first step, then begin to work on a financial plan that will hopefully get you to those goals.  I would urge you to not simply try to find an investment that you can throw some money into, but to spend much more time on this than that. Develop real goals and a plan.

I hope that this helps gets you started. Please do not hesitate to follow up with me for any reason. I'd be happy to offer more specifics if you could provide additional details.

Sincerely,
Paul Henneman
President
ValuEngine Inc
www.ValuEngine.com