Ask HN: What's the best way to get 5% on a million dollars?

India's inflation is almost as high, making the real return much lower

Agreed - a well diversified portfolio of stocks and bonds across sectors and geographies is the right approach to maximise return versus risk.

I'd keep a little aside for investing where you have an unfair advantage versus Wall St. That might be getting into a tech stock early, or investing in an early stage company through friends. For the latter don't expect to get your money back soon, if ever.

I've been pretty lucky with Canadian bank stock.

In Canada, there's pretty much zero competition in the banking industry because of how it's regulated. The risk is generally minimal (not factoring macro economic risks) and the returns somewhat steady.

These stocks typically will return a 3% dividend plus some minimal growth. Add it all up and it's fairly easy to get a 5% return if you diversify a bit. I personally own BMO and RY. It has worked well.

I'll preface this with a disclaimer: I don't have a million dollars and I am not an investment professional. That said, as an amateur investor, my gut says that with the fed keeping interest rates low for the short term, you won't see 5% without taking on some risk. With the 10 year treasury at about 3% [1], that's about the best you will see for the time being as far as low-risk investments go. Slightly more risky but still pretty safe would be AAA corporate bonds, which are currently 4.6% [2]. To get to 8 or 10%, you'd have to get pretty risky, and go with junk bonds, or high yield dividend stocks like REITs (I've gotten 11% returns over the past 3 years with these). If you want anything higher, then you'd have to take on more risk than I have the appetite for, like angel investing.

1. http://www.treasury.gov/resource-center/data-chart-center/in... 2. http://research.stlouisfed.org/fred2/series/AAA

Disclaimer: I'm not a financial advisor, I don't play one on TV, and I don't have a million dollars or equivalent.

Take $10,000 (1%), and accept it as money worth spending. Network well, contact friends, family and ideally successful professionals and discover a financial advisor you can trust. Get empirical proof of this, as many may just be out to fleece clients - and worse, think they're actually doing a good job.

In terms of getting good advice, accept that money will have to be on the table. People have to make a living, and if there's nothing to gain, then why should a good professional waste their time? My hunch is that a good financial advisor will be happy to take a lump sum consultancy fee, rather than a percentage management fee, just to give you general advice - especially one that knows their clients are your friends and will react to any stupidity the financial advisor says.

With that money set aside and taken as ceded to the task of figuring out how to manage your money, take some time out and learn enough to make reasoned decisions. Research, study, understand the basics and importantly - understand the absolutely stupid and worst options, and the worst that sound like the best. It won't get you that much time, but it gets you more than nothing.

Given you're making 5% minimum, a 1% loss can be fixed in a year and regain you access to any of the funds that you fell below the minimum for. But the time and effort spent now is better than finding out in ten years that the risk-free 5% growth option was actually highly risky indeed....