Kind of a broad question I know, but I've never really been in a position to actually need it. I am receiving an inheritance, basically an annuity with 20% this year and 10 percent each year for the next 8. This years will mostly be used to pay off debt, excluding mortgage, and a couple home improvements I need to make. I will be opening a ROTH IRA with part of it and making monthly contributions the rest of the year from my normal income. I need to figure out where and how to start next year and the years to follow. It's not a life changing amount, but it is life altering with the opportunity to be life changing. Paying off my debt initially, opens up a lot of my regular income and I am currently budgeted for less than it. I'm scared to death of screwing this up somehow, I don't want to blow what was hard earned and left for me to use right. Are financial advisors/planners worth the cost?
Go to the Vanguard website and do some looking. Vanguard is one of a few (think fidelity also???) that have a cut to the meat approach. Very informative. They also have a very low fee structure on some of their offered plans. If you are already in route to open a Roth IRA then that is good. As for this DIY bow hunter I don't like paying managers but to each their own. Consultation may be worth the price. Index funds brother, avoid and minimize your risk by being broadly diversified and keep a sharp eye on any fee structured portfolio management. Think long run and costs. Real estate is good depending on what it is and where it is at. First off get a new bow, some arrows, and a Mt. Dew...take a walk, shoot some, and think about it. ... Your going to be fine!
My initial thoughts were to max out the IRA each year for the next 8 in a lump sum, then take xx amount left over and start a ladder of CD's so when the 8 years is up I can continue maxing it out until it's gone and then start working income contributions again. All the while I would be doing enough in 401k contributions to get company match, which basically equates to 7.5%(they match 50% of first 5%) of gross pay. Anyone here use an advisor? Not asking for names just impressions and whether it has been worth it.
If you buy land you will start enjoying it from the very first day, it will always be there, much unlike Enron, it will grow in value and you and your family will live and learn to treasure it. Upon your death your children will thank you. Or You can take a box full of cash and give it to a man with nice cloths, and every 3 months his secretary will send you a letter telling you that either he still has your money and a bit more or a letter that tells you that he no longer has all of your money, but if you send him more money he will get your money back, he will be wearing those nice cloths while he is golfing on your money too. Upon your death your children will wish you had bought land. And yes you want to keep contributing to the 401 to the company matching point, that's free money and a no brainer.
Land of Illinois, I'd be getting an acre or two a year. Believe me, my end goal is land and the sooner the better. Just need to make sure in 10 years I can be there, I just need 5 years to pick a state.
A rental property is a great investment. You put money down and other people pay off the mortgage. Don't pay a financial adviser your local bank has them and it doesn't cost you anything.Gold is a good investment it is pretty steady right now and is good for a long term. Local municipal bonds can be good if you invest in the right town.
Putting money in the stock market at a time that its artificially higher than its ever been, with an economy in the dumps and heading for the crapper makes no sense at all, lets hear it for the ole buy and hold scenario. WTF! Buy a tangible object, and by that I mean something you can put your hand on. There is a lot of land that is not in Illinois. Just saying!
It's sad when overseas investments are both safer and more profitable than those on our own soil. But I would say don't put all your eggs in one basket. Buy a rental, put some in ROTH's, buy into silver... Property as others have mentioned is a great investment from all the stuff it offers, but typically buying a chunk of land that your family can enjoy, rarely pays the bills. Buy a rental, let someone else make the payments for you, when it's paid off, you buy another using the rent from both places to pay off the mortgage of the second, it snowballs and the whole time, someone else is footing the bill.
We are using one in Shorewood, IL. My wife's father passed away and left his entire estate to her and it was a mess since she has a sister that was left out unless my wife passed before my father in law. My wife decided to give her sister half and her dad's girlfriend is getting 30k for helping take care of her father while he was with us dying, per his wish. Initially we were going to keep our old house and rent it but after looking at the headaches, especially in Illinois with deadbeats being hard to evict we dumped it and bought a larger house that was a foreclosure and a property that will appreciate far more than the previous one. The new house was purchased for 200k less than it sold for in 2006 and we put down 55% so that we have a small mortgage. The IRA's can be tricky depending on what you do with them. My wife and the sister are supplementing their incomes over the next three years with the IRA's. What sucks with that is that we have to pay taxes on the IRA's and it is jacking out income bracket since it legally is being taxed on the wife and my income and then being distributed. We are basically getting an extra 40k and sliding in under the magic 250k Tax Bracket Obummer wants to Milk the Hell out of. The wife and her sister are both on that Family Lake House Title in Hayward WI which they are selling. We plan to invest in property much closer to home with the money to avoid taxes, her sister is buying a lake house in TX where they live. Her Grandparents house was left to her and she will split that with her sister, since it was inheritance and they weren't on the title like the Lake House they will not be taxed and we plan to invest that money based on what our investment guy says. In the end my sister in law has made this all painfull, fought with my wife that has been more than generous. In the short term we are not going investment crazy because the wife has another relative leaving her everything. The wife's great aunt has no children, we are the last family she has and we are helping her out. The wife pays her bills for her, takes her taxes to the tax guy and we set up any repair for her house. We also take her shopping if she needs. With that being said the wife is on all of her accounts and will inherit her estate, though she has been joking that she just might outlive us. We intend to take a large chunk of what she leaves to start an animal foundation and our financial peeps did the same for a dear friend of ours with an inheritance she received. The plan is that I will still work and the wife will run the foundation and donate 50-100k a year to shelters across the country with the money earned on investments. The wife plans to leave the foundation to one of her nieces one day in hopes that it can become something passed down from her Aunt. Looking at everything on our plate We had to make a decision and find someone we trusted. I knew friends in the field but didn't want my friends all up in our business. The group we are working with has been working with our friend for 7 years and have never done them wrong. We may pay them but in the long run the wife feels it is worth the advice and investments we are setting up. We did have some hey decisions and in the end we looked at what would leave the least amount of headaches and allow us to live the life we want to live.
from personal experience, be very, very careful buying "investment" rental properties. I'm pretty sure being an Illinois landlord is the 6th level of Hell in Dante's Inferno. Being a landlord in Chicago is a whole other level of hell...a much deeper one.
Treat this money like the money you work for and not as a free gift. Many people blow this kind of on upgrading their life style for a few years or vacations and BS. Treat this money as a very valuable gift that you treasure for the rest of your life. That being said I wouldn't pay off any of your own debt with this gift money. If you run up credit cards then you stick with the plan you had and pay it off. This money should only be used for investing. Roth IRA, stocks and land. You have to have the stomach for stocks though. They will go up and they WILL go down but investing in good companies will always pay off in the long run. That being 5-10-20+ years down the road. Think long term with this money. Don't do mutual funds. Their fees take away most of the long term profits and you pay a high tax on them every year because they are constantly buying and selling your shares to make it look like your shares are doing something, they are BS Don't use a financial adviser. If they were any good they wouldn't need your money. Trust yourself and buy 100 share blocks of good companies and by some young fast moving companies some times and create your own mutual fund. My grandfather gave each of his 13 grandchildren $30k in $10k sums over three years and that ca hanged my life. My family is not very giving and so I treated it very carefully as if it was still my grandfathers money. The dept I paid off was a $3,000 tax lien on my house. I figured this was the only free money I'd ever get so make it last. Today own at least a 100 shares in 30-40 different companies. Good luck and don't tell others about this money. Friends have a way of helping you spend your money
This slow approach is almost fool proof if you can come up with the down payment for the first house or two. Amazing how much equity you are sitting on 10 years later at zero cost to you. Not saying you can't lose money in real estate, but if you are cautious and smart with your purchases upfront then you need horrible luck/no common sense to mess it up for the most part.
Good advice for the most part, except its a horrible idea to ever NOT pay off cc debt as fast as humanly possible at their rates. Paying off this type of debt IS investing. Money in your pocket is money in your pocket, use it wisely regardless of the source.
