Coming Into Money

over9five

Moderator
Staff member
A fellow driver recently inherited some money. He has no idea what to do with it, and is asking advice.
What would YOU do if you inherited, say $50,000? I couldn't advise him, but I know there are some smart people here.

P.S. He's not looking to spend it! He wants to save it towards retirement.
 

bluehdmc

Well-Known Member
How old is he and how adverse to risk?

He could probably find a mutual fund that fit's his criteria.

Vanguard has a number of index funds that have low expenses.

One of the worst things might be just putting in the bank, if he gets 3% interest and inflation is 5% he basically loses 2%.

If it was me, I'd buy some stock in a blue chip like IBM, maybe 2 or 4 blue chips, put some in something like the Vanguard S&P 500 fund, (basically the fund buys stocks in the S&P 500). Lastly I'd probably put maybe $10K in a CD, and take a nice vacation with some :-).
 

over9five

Moderator
Staff member
Is he debt free? If not there is your answer. If he is but his kids need help that is your second answer.

He says he has 2 car loans. I don't think his kids need help. Would it be better to pay off the car loans with some of it first? Or invest it all and keep the car payments?
 

ajblakejr

Age quod agis
First - Is this money free and clear without taxation?

Second - Any kidlets?

Third - Is there an age difference of 6+ years with spouse?

Fourth - Is there anyone, like an ex or children, who could file claim on $$ or assets?
 

raceanoncr

Well-Known Member
I know of this TERRIFIC fund that is SUREFIRE! It's called: "RACEANONCR VANGUARD SAFE-FUND". Investment is secure and WELL-ENDOWED, I mean...well-funded.

In fact...ALL of you need to invest in this fund...NOW!
 

barnyard

KTM rider
We inherited a bit more than double that from my wife's parents.

We paid off our short term debt, paid cash for 3 remodeling projects, bought my wife a used car (BMW 530xi, so a very nice used car, but it was a pretty good deal) and left almost half of it invested where my wife's folks had it when they passed.

Our oldest daughter had already paid off her student loans, so we are making sure that the youngest does not have to borrow money for college either. Pretty much anything to get the girls set for their lives, debt-free, we feel we are honoring my wife's parents.

The amount we received blew us away. We were not expecting even half what we got (not that we were 'expecting' anything.) The hardest part was listening to one of her brother's while the will was being read. For the last 10 years of his parents lives, he appeared to think that every dime they spent came from his inheritance. He wanted some of my wife's inheritance to pay him back because she helped her folks move into an assisted living apartment. It was shameful.

Hopefully, when I pass, I can give the same gift to my daughters.
 

rod

Retired 22 years
Bury it in plastic coffee containers in the back yard like I do. It will drive the relatives with metal detectors nuts after you are gone.
 

Brownslave688

You want a toe? I can get you a toe.
Here's what I would personally do. Take 5-10k and do as he pleases. Have fun with it. Then I'd invest it in thirds.

1/3 into old established companies with high dividends. Example. Ups coca cola. There are many more. Probably better ones also.

1/3 into aggressive growth stocks.

1/3 into precious metals. (I do not think now is a good time to buy)
 

beentheredonethat

Well-Known Member
Too many unknown variables...

If he has any high interest debt pay that off.
If his only debt is very low interest rates, keep the debt and pay over time.. I know some folks with like 1 or 2 % car loans, might as well keep those.

If he doesn't have a financial adviser he may want to look into getting one.

Has he looked into purchasing any kind of long term care insurance in the event he needs care when he gets older, without being a burden on his children?

He probably should look into a financial adviser to help him make decisions...
I personally would suggest mutual funds over individual stocks, if he wishes to invest. He may also want to do dollar cost averaging. So maybe he decides to invest 1K per month over 4 years time period. So if the market goes down a bit he can buy more shares at the lower price. Prior to investing all the money into mutual funds the balance can be rolled over into some short term CD's.

With the market at it's peak in many years, it's possible it may go down further. Of course, it could easily keep going up to..



Some things I would not do...
If he has grandkids, I would NOT put it into their name for a college fund (529 type). The reason is colleges look at that money and reduce amount of aid the student gets.
I'm all for helping out the kids\grandkids, but if it's in his name, if he needs it later, it's still his. If he doesn't need it when they go to college, it's not in their name and he can give them money as they need it without it really impacting their grants\aids for college. So hopefully they can graduate with minimal college debt.



Sorry, for not having one good answer, but I don't think there is one good answer.
 
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