What is the best way to invest 500K, for a 53 year old, with no job qualification?

This question and answer originally appeared at Quora.

When you mention you have no job qualification I am making the assumption you don’t have a job, or at least are struggling in employment.

We are all likely to live a lot longer than previous generations, which means we will likely need to work longer. It wouldn’t be unreasonable (health permitting) to expect and plan to work until you are 65–70.

This means that you will have perhaps 15 more years of employment (or self employment) remaining.

With machines and other low cost regions taking many ‘unskilled’ roles, your best bet would be to use some of this money to invest in yourself and learn a new vocation. Think carefully about how you wish to spend your time, how much money any new skill would provide, can you still do it if physical health declines etc., how much it costs to train and how long it will take etc.

Good places to learn new skills would be:

Take your time to find the right courses and speak to potential employers to find out if they will hire you with these skills and get their views on your skill learning options.

Next up would be to set aside a healthy amount in cash as a reserve fund. This should be 6–12 months expenses, but can be more if you feel more comfortable with it. I rather rudely call this f**k you money, but despite the crassness, the lessons are extremely valid.

After this you should think about whether you have any business ideas you wish to turn into reality. Setting aside some money to pursue any dreams or ideas is worthwhile, even if it financially doesn’t work out.

Better to be broke having attempted your big life goals, than to die with money but filled with regret.

Now onto investing.

You should be thinking about investing to provide you with a return. By return I mean income, or yield. You shouldn’t invest trying to sell what you own for a higher price (a complicated game of pass the parcel), but rather think about buying some investments that you would be comfortable holding for a very long time and simply reinvest the returns they provide, or use the income to support yourself if you need to.

In today’s world, the yields available from many assets have been suppressed by government and central bank manipulation so you really must diversify and you must accept there is likely to be some rather uncomfortable downward fluctuations (the media will call these crashes).

You should think about building a portfolio that has an allocation to shares, property and bonds.

I would propose looking at established companies that pay regular dividends – you could save some time and find investment funds that focus on dividend paying shares.

Take some time to learn about investing before parting with any of your money.

Education will help ensure your parting is temporary and not permanent.

Hope that helps.

This answer first appeared here.

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Mark Underdown

Financial Planner, Small Acorn Money

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