January 04, 2005

• Oh, by the way, I have no debt, and I don't plan on buying a house/real estate any time soon.
• I could only tell you what not to do. My dear one received such a windfall two years ago and I took the position that I wouldn't interfere. About half of it disappeared in alcohol-induced largesse. /leaving big income tax problems for me. *shudders at memory*
• Buy me a pony.
• If your bank has some sort of money market account, that might produce better returns than the savings account without locking up the money the way another low-risk, proportionate-return investment (like a CD) would. Nobody's said it yet, so I'll be the first: risk is proportionate to return. The more desirous the returns, the likelier you'll lose money. Of course, if you don't plan on using the money for a long time, you could buy a basket of stable stocks and sit on 'em for a few decades to produce some fun money for retirement.
• Mmm hmm, you know, I happen to be an expert at just this sort of thing. If you would send me your physical address and a list of your major fears, I'd be happy to discuss it with you. E-mail's in the profile.
• Seriously, the smart thing to do is set up a long-term investment, something that'll be relatively stable but pay more than a savings or money market. Setting up an IRA or some kind of mutual fund would be my advice.
• I am not a financial advisor; you should check with an actual advisor before making any decisions of this sort. That said? First: pay off any credit card debt. Second: buy yourself something nice you wouldn't otherwise buy. Last: invest the rest, according to your risk tolerance. A combination of stock mutual funds and bond funds is typically best. The most important part of that last one is finding an investment advisor that you can trust not to put you into crap that generates him the most commission. Ask around, get a couple referrals from people you trust, then interview them and see who you feel the most comfortable with. Get that money working for you.
• Mutual funds are a rip, but an index fund instead, far less overhead. Vanguard are your buddies.
• I'm shocked Nostrildamus isn't in here already, asking you to send it to him. I second the index funds recommendation, although you should push as much as possible toward a tax-free option, like an IRA. Which reminds me, check with a CPA about the tax implications of such a large windfall, and prepare for that now.
• Don't send it to the IRA! They torture kittens. Buy me a pony.
• Go into loansharking. Find some poor shlub who owes people 10,000 to 15,000, and then charge him 55% interest. Just make sure you can take him/her in a fight. Or you can donate to the Red Cross to help the tsunami victims... Seriously though, what Fes said. Windfalls are nice, but you should really buy yourself something in the $2,500-$5,000 range, or something sweet for an SO if you have one. (crazy electronics, a very nice bedroom/livingroom set, something that will last awhile that you'll/they'll really get enjoy on a daily basis.) then sock the rest in whatever a competent financial advisor thinks is best. When I was 18, I received $28,000 from an insurance settlement. I blew it in a little over a year, though I bought a car and paid for a year's tuition (about $8,000) for my sister's college. I had a blast, and I don't regret it a bit. And my sister so owes me... :)
• For starters, you should definitely spend a little of it on something you'll enjoy. Maybe a nice vacation, or some sort of new toy that you've always wanted. As for the bulk of the money, invest invest invest. There's nothing like the security of knowing you have a year's worth of rent sitting in the bank when you need it, but at today's paltry rates, you might as well try to get a little more out of it. That said, avoid bond funds like the plague. Interest rates are only going higher, and bond funds, particularly short-term funds, are seriously at risk right now. (E-mail me directly if you want an extended explanation - I don't want to hog the thread.) Fidelity actually has a series of funds which are geared towards people retiring a long way off. They start aggressively, and become gradually more conservative as time goes on. Basically, it's actively managed passive investing, and I believe the fees are still pretty low.
• and congrats on the money, possum! unless it was due to an untimely and/or gruesome death, and in that case, condolences
• You should also give some consideration to whether you think the dollar is going to continue to fall, in which case shifting it into Euros in some form might be worth considering. (graph of past five years' exchange rate) There have been some threads on this topic lately.
• Invest in squidranch's new invention.
• After you buy Shrik a pony (well was here first) I'd be happy with a used Suzuki Samurai.
• Fes's advice to get a financial advisor is IMO essential. Be sure you get one who isn't going to be getting commissions for selling the fund of the week. Fee-based advisors are generally more interested in seeing you do well.
• Marry me. I'll quit working and you can claim me as a dependent and I promise not to fritter away more than $28,000 or so. However, should you not take that suggestion for some unknown reason, send Skrik a pony. After that I concur with the "get a pro involved & invest it" suggestions. T. Rowe Price used to handle my meagre retirement account from my last job, and they were always really really nice to me when I called, even though I had to be about their most insignificant client. And let me make a pitch for socially conscious investing, which T. Rowe Price can help you with - don't buy stocks blind or invest in the Deathstar, check out what you're funding.
• Actually, Fidelity's Spartan index fund is currently the cheapest, last I checked. Their minimum account balance is higher, but $30,000 might make the threshold. I'm more risk adverse, so I overweight bonds in my portfolio, and probably have too many dividend funds. Have been looking at internationals to catch some of that dollar deflation action, but I think I already missed my chance on that one. Whatever you decide to do, I strongly suggest you think long and hard about it, and how it fits into your risk tolerance. In my experience, people tend to be very agressive with the market ... until they see a loss.
• What rolypolyman said. Definately.
• My vote is a trip to your local bank. Most "financial advisors" are in it for the commission...guess who pays that! Go to your bank, ask to speak to someone who handles personal banking. If they don't have time for you, go to another bank (perhaps a local rather than national bank)... Explain to him/her what your goals are, get some advice, then go to another bank for a second opinion... or...if that fails, buy lottery tickets
• just divide the money up! Some for risk investement Some for retirement Some for Safe Investment Some for fun! or make a list of things that you might possibly do with the money and then prioritize! ask yourself what you want to do with the money, how old you are, whether or not you're secure for the future, and why not real state? you so should! Well, good luck!
• Thanks for all the advice/suggestions. Keep it coming. It's a bit overwhelming, though -- all the possibilities. ... Maybe investing in ponies is the smart thing to do.
• Financial advisors may be in it for the commission, but that only means that the more money they make you, the more commission they get. So they're going to work to get their commission way up there. I'd go with one. Everyone you speak to is going to expect some financial gain as part of their job. Or, if you have a great idea for a business, you could give it a try. If you find someone with or have sufficient expertise in whatever you choose, you'll gain in the long term.
• Even if financial advisors are in it for the money, it wouldn't hurt to talk to a couple. (especially if you can talk to one for free.) Go to one, get in writing (either have them do it, or do it yourself) then go to another one and say, "This is what someone at another company told me to do" and see what they say. That will give you an idea of a)which one seems more honest from the reaction you get and b) what the various possibilities are.
• Of course they're in it for the money. We all are. The mere fact that an advisor profits from your business doesn't automatically make him/her suspect. It's *how* they profit that matters. Many make commissions for the trades and investments they make, and most of those have "special products" that they'll try to push because they get bigger commissions for that. But not all work that way. Many investment advisors work on a flat fee, pay-as-you-go basis. They don't care what you buy, because they make the same amount of money either way. Others make their money based on how well their clients' portfolios perform, which means they're very concerned with how much money you make, but many of those guys are going to recommend higher risk, rapid growth investments (more money for them). I'd say go for a fee-based advisor. You might not like the idea of paying a fee, but unless you're a really lucky person, the advisor will be better at investing your money than you will.
• Sheesh. All of you responsible Monkeys make me wanna hurl. Possum, here's what you need to do: 1. Vegas, baby, VEGAS! (If you're closer to the East Coast, you could do Atlantic City... but that's like french kissing your cousin. Sure, it's fun, but it's just not the same). 2. Hookers -- er, escorts! There are plenty of gorgeous ladies who would love for you to pay for their company! 3. Drugs, mutha-fucka! Go get you some of that high quality shit! And don't buy it from that shmoe on the corner! You're in the big leagues now! Fly to Amsterdam and get the quality merchandise! 4. Did I mention VEGAS??? 5. Buy Skrik a pony. After all of this, if you happen to have any money left over, you may then invest that amount .
• or, $30,000 divided by 2,642 mofi members = about $11.36 each.
• 1. Buy MANY ponies. (and somewhere to keep them.) 2. Breed the nicest ones to each other and sell the rest. 3. Keep the nicest of the offspring and sell the others. 4. Continue for a few generations (ponies reach breeding age at about 4 years old.) 5. Having created a new species of super-nice ponies, receive Nobel Prize (graciously, remember) and retire on your laurels to live in enormous country house with affectionate ponies in large numbers. 6. (optional) Distribute ponies among MoFi members, sending nicest one to Skrik of course. Purchase small tropical island and retire there.
• Before you do any of this crap you should spend a week spontaneously busting out in deep-throated laughing spells and making devil signs with your hands. Everyone always seems to skip that part.
• Argh asked an investment question a few months back regarding money for his niece. I would offer the same advice to you as I did to him. Firstly, I would pay off any outstanding debts you may have and are paying a high rate of interest on eg credit cards, store cards etc. Then, with the remainder I'd invest into a managed fund for the medium to long term. The potential rate of return far exceeds the interest you would earn on your savings account. The key is to forget about the money once you put it in there. Although the market and hence, the value of your investment, will move up or down quite frequently, over the longer term the trend is always for an upward movement. THen when it comes time to buy a house you have a nice little deposit already set aside, or a college fund for your kid. The reasons for a managed fund over say, trading stocks directly can be seen below in my initial response to Aargh's question. I'd put the money into a managed fund for several reasons * Management fees are relatively low compared to brokerage. Brokerage is payable when buying AND selling a particular asset. Most fund managers will charge only an entry or exit fee with ongoing fees relatively minimal. * Managed funds are exactly that. Professionals are there, actively managing your investment for you. This means you don't have to be particularly market savvy or spend hours poring over the financial pages. *Dividend payments which are often payed out quarterly or half yearly can often be reinvested, free of charge, back into the fund. * Different levels of risk can be catered for through different funds. Some funds will invest a large proportion of funds in cash and bonds, others in international equities. There are a wide variety of options available. And, on the topic of risk, if you niece is three and you plan on giving her the money for her 18th, I would suggest stocks and property rather than Bonds. Your investment timeframe allows a more aggressive strategy with the possibility of higher returns.. Remember- it's time in the market, not timing in the market. posted by Bondurant at 04:47AM UTC on November 18
• I've found this helpful when I was learning about investing. As I am a poor student with no cashflow, I haven't been able to put any of it into practice, but it essentially echoes a fair amount of what's already been said here and is kinda funny to boot. There's also the Motley Fool's series on how to start investing. If you're feeling really generous, could you, like, give me some of it? I'll be your $10 crackwhore and everything.
• That doesn't seem like a huge amount of money to me. But when I got my first 15K from company stock back in the .com day, it did seem like a lot. But later I got many hundreds of thousands. Now it's gone. So, the advice I give is this: if you feel like you have lots of money, and are a personality that finds spending money easily, it's very, very easy to go through large amounts of money without realizing it. Little things add up fast. With more than 300K in a bank account (actually, a money management account), spending $100 here and there seemed like no big deal to me. But it added up fast and I was spending 20K-30K a month just on "stuff". Not drugs, not alcohol. Electronic gadgets, yes,'cause I'm a geek. Put it where you can't get to it easily. Then, when you need it, you'll have it. On the other hand, I did spend all that money partly because, you know, it seems to me that the point of money is to spend it. Unless you expect to have some children or someone who badly needs it when you die, what's the point of being one of those people that lives frugally and dies a millionaire? Maybe you should buy yourself one nice thing, and make the rest relatively inaccessible.
• Buy Shrik a dozen ponies and we'll field The MonkeyFilter Polo Team (tagline forthcoming). Or you could be sensible and consign your money to the joy of compound interest. Maybe both?
• I can appreciate the sound financial advice that many monkeys are providing, but what you really should do is challenge yourself personally. Do that thing that you always wanted to do. Get a degree in something eccentric but useless. Take Scuba diving lessons. Rent an elephant. Have the world's largest collection of teapots or globes. There is a magazine, somewhere, that will want to write an article on you. Think about it.
• 30 grand? Don't mess me about. Strewth, I had that sort of money in my back pocket when I was knocking out the dodgy motors. These days I spend that in lunches. Look, $30,000 is nothing. Do you know what I make in the City? Why don't you shove it in the piggy bank if you're that worried? Otherwise get yourself a new car or have a bit of fun with a couple of tarts. You could piss it away in a couple of nights. There's nothing clever you can try with that sort of petty cash on the money markets, believe you me.
• Congrats. I'd suggest $3k in a Roth IRA for this year. $20k in a 1 year CD while you figure out what you want to do with it / how you really want to invest it / let the high of getting a slug of money wear off. Keep $5k in savings for a rainy day or put some into a regular IRA as a tax shelter. Spend the remaining $2k doing something nice for yourself (take some classes, vacation, nice dinners, new piece of furniture, etc.)
• Worthy of a lol. Bravo.
• Nostril's that is.
• Five years ago I had a windfall of about $300K, and blew it all on divorce settlements and lawyer's fees. So I guess that means I agree with Nostrildamus.
• We blew Michael's redundancy payout from California on a house. And then the government valuation chucked $100k onto it. Sweet.
• Sorry if I gave the wrong impression. I seem to forget that in the US and thereabouts there's this bizarre association of money with virtue and, thus, anyone speaking about having or having had money is "boasting". From my perspective, there's nothing whatsoever admirable about me having had that money, not even by other people's standards since, of course, I wasted most of it. Sadly, not on hookers. I stand by my assertion that 30K isn't that much, as nostril facetiously says, in terms of financial management. I wouldn't worry much about the "wisest" way to invest it. I'd worry more about spending it foolishly...which is easier to do than most people think.
• If you have food, shelter, give it away to someone, anyone. I'm being serious.
• Geez, I want to have lunch with Nostril!! Dude!
• It sounds like a lot of you have or have had access to a lot of money and arent adverse to wasting it. If all of all us pooled in what we have, we could buy a Monkeyfilter island or something... how cool would that be? [I can contribute nothing right now, unless anyone wants to buy a screenplay]
• What's it about? Do you get wafers with it?
• Maybe you could give Skrik a pony to buy his pony. Personally I'd prefer a Monkey ...
• Cher Nostril: you may fly me over at any time to discuss the projects. Alas that the drop-nose bird is retired. Where shall we lunch?
• A monkeyfilter island would be a very sound investment. Consider the amount of industry and talent hereabouts! Other than that: put one-fourth of your booty in a high-yield, somewhat risky mutual fund. Put a fourth in bonds. Put another fourth in a savings account with a decent yield that you can't access without considerable work. Put the rest into your checking account.
• [Altho, when I sold my house and had a nice little windfall, I went to live in Manhattan (cheaply! very cheaply! it was a tiny windfall) for several months, figuring that the best use of money is to enjoy it.][I ain't sorry either.]
• $30,000 divided by 2,642 mofi members = about $11.36 each. Sounds good to me: I could get a fifth of Old Crow, a pound of goat meat, and Twinkies for dessert.
• Big Davey, I am not sure I would accept an invitation to dine chez toi, altho I am a huge fan of off-brand bourbons!