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Post by poncho72 on Jul 29, 2009 21:10:37 GMT -6
My great aunt recently passed away, I just found out yesterday that I have received a substantial amount of money. This has never happened to me before and the past 24 hours have been a little overwhelming and surreal, it was totally unexpected.
The Mrs. and I have been discussing what we should do with the money and I would like some of you that are well versed and more veteran in the financial world to critique what we are thinking.
With this money we would have enough to pay off all of our debt minus our house, the leftover money would then be placed into a emergency fund, Roth IRA and add to the Iowa 529 college plan that we started for our daughter a few years ago. Some are telling me not to pay off all the debt ( our car that we have a year and a half left on ) and instead invest that money, I'm thinking that the money I save monthly by paying it all off can then be invested, is this the right kind of thinking or am I way off base?
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Post by thunderhawk on Jul 29, 2009 21:23:27 GMT -6
Real estate is real fucking cheap right now...
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Post by germaine on Jul 30, 2009 7:31:35 GMT -6
Pay off the debt! Then worry about the other stuff. Personally, I think your line of thinking is right...the others, not so much.
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Post by NotMyKid on Jul 30, 2009 8:03:39 GMT -6
poncho,
Dave Ramsey would be proud.
Looks like a pretty good plan if you ask me.
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Post by socal on Jul 30, 2009 8:35:22 GMT -6
My great aunt recently passed away, I just found out yesterday that I have received a substantial amount of money. This has never happened to me before and the past 24 hours have been a little overwhelming and surreal, it was totally unexpected. The Mrs. and I have been discussing what we should do with the money and I would like some of you that are well versed and more veteran in the financial world to critique what we are thinking. With this money we would have enough to pay off all of our debt minus our house, the leftover money would then be placed into a emergency fund, Roth IRA and add to the Iowa 529 college plan that we started for our daughter a few years ago. Some are telling me not to pay off all the debt ( our car that we have a year and a half left on ) and instead invest that money, I'm thinking that the money I save monthly by paying it all off can then be invested, is this the right kind of thinking or am I way off base? Don't spend it until you've got it. I had a similar situation 5 years ago where I was set to receive money from a relative. It took over a year and a half between his death and the estate proceeds being distributed. When I spent it, I did so with the thought that whatever I spent it on - should be honor the decedent. Your initial thoughts sound like they are quite honorable. |
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Post by poncho72 on Jul 30, 2009 8:51:08 GMT -6
My great aunt recently passed away, I just found out yesterday that I have received a substantial amount of money. This has never happened to me before and the past 24 hours have been a little overwhelming and surreal, it was totally unexpected. The Mrs. and I have been discussing what we should do with the money and I would like some of you that are well versed and more veteran in the financial world to critique what we are thinking. With this money we would have enough to pay off all of our debt minus our house, the leftover money would then be placed into a emergency fund, Roth IRA and add to the Iowa 529 college plan that we started for our daughter a few years ago. Some are telling me not to pay off all the debt ( our car that we have a year and a half left on ) and instead invest that money, I'm thinking that the money I save monthly by paying it all off can then be invested, is this the right kind of thinking or am I way off base? Don't spend it until you've got it. I had a similar situation 5 years ago where I was set to receive money from a relative. It took over a year and a half between his death and the estate proceeds being distributed. When I spent it, I did so with the thought that whatever I spent it on - should be honor the decedent. Your initial thoughts sound like they are quite honorable. Socal I have to say that when I heard about this $ the first thing I thought about was adding to daughters college fund, not just because it's my kid but because my great Aunt taught school for 35 years and she would want that for her. I can't think of a better way to honor her memory than investing in my childs education! Hoffa you are right about Dave Ramsey! |
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Post by twine on Jul 30, 2009 9:06:18 GMT -6
Wait for Powerball to get into the +$100,000,000 range and throw down!
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Post by Saggitariutt Jefferspin (ith) on Jul 30, 2009 9:26:35 GMT -6
You may want to seek the advice of a financial advisor...
or spend it on hookers and blow.
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Post by NOTTHOR on Jul 30, 2009 9:26:39 GMT -6
I agree with Socal. Also make sure there won't be any taxes payable on it or anything - it would suck ass if you got tax pwn3d a year after you got the cash.
How substantial an amount are you talking? If it's more than you're comfortable with, you should get an advisor. In general though, I like the idea of deleveraging over investing - you are probably paying more interest on your car loan than you are going to get risk free. Fire up the 529, fund retirement and keep a juicy slush fund account for a rainy day and you'll be all set.
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Post by poncho72 on Jul 30, 2009 10:26:04 GMT -6
I agree with Socal. Also make sure there won't be any taxes payable on it or anything - it would suck ass if you got tax pwn3d a year after you got the cash. How substantial an amount are you talking? If it's more than you're comfortable with, you should get an advisor. In general though, I like the idea of deleveraging over investing - you are probably paying more interest on your car loan than you are going to get risk free. Fire up the 529, fund retirement and keep a juicy slush fund account for a rainy day and you'll be all set. It's not a life changing amount, the wife and I will still have to go to work everyday, it's enough that we can clean up everything except the house payment, and do some things that we normally wouldn't have the funds to do, ie. investing, emergency fund, etc... I don't know for sure about the taxable income, I have to find that out. Yesterday I met with guy that is taking care of the estate and by the time we were done talking I wouldn't sign anything or make a decision without going home and talking with the wife and just taking a step back and understanding what has just happened to us. We will meet with him next Monday and have a plan in place. I don't think I need a financial advisor for everything, I just need to be smart, paying off debts is a no brainer IMO, so is the college fund for the kid. the investing is where I am uneducated except for reading threads on here and other sites. I know that I need to watch out for fees that will eat up your investment profits. This is a heck of an opportunity and I don't want to screw it up! Itheus, Hookers and Coke, it wouldn't eat up all the funds, may have to create a little " swiss bank account " for those kinds of activities! I've never snorted a line off of a hookers ass before, this could be my chance! |
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Post by thunderhawk on Jul 30, 2009 13:12:48 GMT -6
Something to ponder about paying off debts. If your debts are lower interest than interest you could earn on the money, you've got a decision to make, especially if those debts are unsecured. And, if interest on certain debt (school loans) is deductible, you might be costing yourself if you can make more in interest on the invested money. Especially if you can keep the invested money liquid so you have the option to pay off the debt if you decide to do so.
Paying off the debts brings peace of mind, but it might not be the most optimal financial decision. Not all debt is created equal.
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Post by Master Blaster on Aug 1, 2009 0:52:12 GMT -6
Using thunders advice above, go debt free on all but the house if warranted. Take the money you are saving by not having a car payment and put it towards the house.
And for the emergency fund, most advisors will tell you to have 3-6 months of pay put aside for just incase. That emergency fund is an important asset as it is also a start to the retirement fund, but you should keep it in easily liquidated investments.
Last but not least, don't spend the money before you get it.
Not sure if Iowa has a prepaid college program or only a 529, but I'd at least check.
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Post by hockaye on Aug 1, 2009 7:00:31 GMT -6
Something to ponder about paying off debts. If your debts are lower interest than interest you could earn on the money, you've got a decision to make, especially if those debts are unsecured. And, if interest on certain debt (school loans) is deductible, you might be costing yourself if you can make more in interest on the invested money. Especially if you can keep the invested money liquid so you have the option to pay off the debt if you decide to do so. Paying off the debts brings peace of mind, but it might not be the most optimal financial decision. Not all debt is created equal. I would take the peace of mind hands down. Stoke your emergency fund and invest the rest. You don't need anyone to handle this for you. Take care of your family by dumping the debt. Forget the deductible interest, think of all of the money you can make with the invested money instead. You are on the right track by getting rid of your payments! Excellent way to honor your family member with your inheritance. |
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Post by thunderhawk on Aug 1, 2009 12:31:22 GMT -6
Using thunders advice above, go debt free on all but the house if warranted. Take the money you are saving by not having a car payment and put it towards the house. And for the emergency fund, most advisors will tell you to have 3-6 months of pay put aside for just incase. That emergency fund is an important asset as it is also a start to the retirement fund, but you should keep it in easily liquidated investments. Last but not least, don't spend the money before you get it. Not sure if Iowa has a prepaid college program or only a 529, but I'd at least check. I just set up a 529...on the day that the dow bottomed out. Better lucky than good, eh? I agree with the rest of your advice. Keep at least 6 months of easily accessible cash. |
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