(Topic ID: 227577)

if someone handed you 250K how would you invest it.


By zr11990

1 year ago



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There are 101 posts in this topic. You are on page 2 of 3.
#51 1 year ago

First I'd figure the tax burden and keep that amount in a safe place. If the 10 year US treasury Bond rate is above your mortgage interest rate (or wait until it is) consider that before paying off the mortgage debt. Or, just pay off that house.

#52 1 year ago
Quoted from KozMckPinball:

First I'd figure the tax burden and keep that amount in a safe place. If the 10 year US treasury Bond rate is above your mortgage interest rate (or wait until it is) consider that before paying off the mortgage debt. Or, just pay off that house.

10 yr treasury pays just under 3.2% and is subject to HUGE interest rate risk! Bonds are getting F ing crushed this year, worst year in history.

Now the 2 yr treasury pays about 2.8% and "carries well" with rising rates.

Be talking soon James

#53 1 year ago

You might check the bogleheads. There's a wiki on managing a windfall and you can start a discussion if unclear.

#54 1 year ago
Quoted from iceman44:

10 yr treasury pays just under 3.2% and is subject to HUGE interest rate risk! Bonds are getting F ing crushed this year, worst year in history.
Now the 2 yr treasury pays about 2.8% and "carries well" with rising rates.
Be talking soon James

You are talking about trading bonds, I was not. If the 10 year is higher, all of the maturity spans are higher. Pick what you need and hold 'em thru maturity. No risk, except missing out on a better rate if they rise.

#55 1 year ago
Quoted from KozMckPinball:

You are talking about trading bonds, I was not. If the 10 year is higher, all of the maturity spans are higher. Pick what you need and hold 'em thru maturity. No risk, except missing out on a better rate if they rise.

Not true. That's the whole point. Rates will rise and you will get F ed if you "hold long term bonds to maturity".

The last 25 years? Ok

Not the next decade, sorry. HUGE risk and already getting ass kicked.

What did the Fed say? Long term Bonds today will be in the toilet for a LONG TERM, while inflation picks up and you are getting a zero net return clipping those coupons.

Why would anyone NOT take the short term 2.8% that carries well while the Fed is raising? Because there is a lack of understanding.

-2
#56 1 year ago
Quoted from iceman44:

Not true. That's the whole point. Rates will rise and you will get F ed if you "hold long term bonds to maturity".
The last 25 years? Ok
Not the next decade, sorry. HUGE risk.

"When you buy and hold, you need not be too concerned about the impact of interest rates on a bond’s price or market value. If interest rates rise, and the market value of your bond falls, you will not feel any effect unless you change your strategy and try to sell the bond. Holding on to the bond means you will not be able to invest that principal at the higher market rates, however."

https://investinginbonds.com/learnmore.asp?catid=6&id=386

We all have the ability to "Google" anything we need to know. It's not rocket science.

#57 1 year ago

All speculation. Just pay that damn mortgage off. Then use your extra monthly capital to invest

#58 1 year ago
Quoted from KozMckPinball:

"When you buy and hold, you need not be too concerned about the impact of interest rates on a bond’s price or market value. If interest rates rise, and the market value of your bond falls, you will not feel any effect unless you change your strategy and try to sell the bond. Holding on to the bond means you will not be able to invest that principal at the higher market rates, however."
https://investinginbonds.com/learnmore.asp?catid=6&id=386
We all have the ability to "Google" anything we need to know. It's not rocket science.

Simply wrong. But believe whatever you like. You are/will continue to get crushed on your bonds! You do understand that the last 30+ yrs interest rates have been on a decline? Now we go back up and the Fed is going to burst the bubble.

There is a great reason Warren Buffet hates bonds, especially now. If you are smarter than Buffet then congrats.

And that quote is probably some of the dumbest advice EVER. Google Buffet and the real world!

And its not "speculation", its fact. Pay attention. And I'm only responsible for managing $300 million+ of client $$ so it matters and I worry a whole LOT about that issue!

Then again, I don't care what you do, I will help my buddy James make the right decisions

#59 1 year ago
Quoted from calprog:

I would pay off the gameroom I just built!!
[quoted image]

I would build a gameroom like this!

#60 1 year ago

Cheeseburgers.

#61 1 year ago

Pinballs are not a good investment- not enough 'meat on the bone' to make it worthwhile.

The Vanguard link is a good one

If you are in the Chicago area, and have at least 500K to invest, I have a solid financial planner I'd recommend in the Far-West burbs.....I get nothing and I mean nothing, out of it....

#62 1 year ago

Real estate is the only business I am aware of where a bank will loan you 80% or more of the price of the investment. Try asking the bank to loan you 80% of the money to buy stocks. With that amount of initial money you should be able to purchase ~$1 million in rental properties. I don't know your market, but it should not be hard for you to look at other local rentals and determine what your return on investment will be for rentals of that value.

I mean this as nicely as possible, if your biggest concern about becoming a landlord is not being able to do "self-help" evictions, i.e. changing the locks or equivalent if someone does not pay, you are in for a very steep learning curve. If it reaches this point with a tenant, many things have likely gone wrong along the way that could have been addressed.

Personally, I think picking tenants is the most important part of landlording. Good tenants will tell you they are having financial problems, they will voluntarily leave or figure something out with you. I have had to wait months for a tenant to get their life together, but they almost always make good on rent that is owed. If you like your tenants and they like you, landlording can be enjoyable. I have had over 100 tenants by this point, I have screwed up picking a few. But still no disasters, I have never had to evict a tenant. I never had one intentionally damage a place or try to cause me a problem. A few were just a bad fit for me and/or the building. I let them walk. In the end I think it saves me money/time/aggravation. It is a business, it is not personal.

Most of landlord horror stories I know involve a non-responsive landlord. One that is either absent and/or poorly delegates the work to a "property manager" who does not care if the buildings go to hell and tenants problems go unacknowledged.

Best of luck if you want to take on property rental, I like it, but it is not for everyone.

#63 1 year ago

Movie investments

#64 1 year ago

Beanie Babies are due for a comeback.

Also Cryptozoology coins are the money of the future.

#65 1 year ago
ted hookers (resized).jpg
#66 1 year ago

With the uncertainty in the market at the moment and the feeling it is going to go down down from here, it seems now would be a good time to just pay off the house and stay in cash.

#67 1 year ago

A CD. At 3% you can get a stern premium in 2 years (that is if he doesn't jack up the price)

#68 1 year ago

Real talk: 250K is a nice windfall but at your age is not enough money to retire. Without knowing your financial situation (debt, assets, etc), I would recommend that you look at your monthly outflows and evaluate if you apply that 250K to those, how much you would be saving a month. Then, evaluate that monthly savings vs income that your would make from investing that either actively or passively. Whichever has the higher net positive to your situation is the way you should lean and then proceed ahead.

If you are concerned about evictions and the like being a landlord is probably not for you. If you were to buy into a business, carefully evaluate the books of any small business that you can buy into for 250K. You may consider something like a carwash, which is right around that price range and has a good revenue stream. A variety of people in my industry (software sales) take commissions and invest or buy businesses like car washes to have something on the side.

#69 1 year ago

Buy a nice house/property in a rural area w/no neighbors for miles. And get out of this growing shit hole of a town............it's getting worse everyday.

#70 1 year ago

I only invest in physical things. I'm sure many people have made a much faster better living than myself, but I am happy where I am at. Not sure if that works for you or not. Good luck!

#71 1 year ago

NAB Bank Shares about $26 AUD a share and you get dividends Fully Franked Tax Paid 99c each 6 months
so $2 a share that's 7.4% per year

#72 1 year ago
Quoted from Luckydogg420:

If you want to rent houses, the key is to not be a slum lord. Do your research on your tenants before you let them move in. Don’t rent to the first guy waving cash in your face. If they don’t have a bank account and can’t provide you a cheque then don’t even look at them as tenants. There are way more honest people out there then crooks looking to rip you off.

You are correct. The slum lord part was a joke. I’m looking for a couple houses in a decent area near where I live or considered a house to rent to studants at A&M where my son is going to school.

#73 1 year ago
Quoted from iceman44:

Simply wrong. But believe whatever you like. You are/will continue to get crushed on your bonds! You do understand that the last 30+ yrs interest rates have been on a decline? Now we go back up and the Fed is going to burst the bubble.
There is a great reason Warren Buffet hates bonds, especially now. If you are smarter than Buffet then congrats.
And that quote is probably some of the dumbest advice EVER. Google Buffet and the real world!
And its not "speculation", its fact. Pay attention. And I'm only responsible for managing $300 million+ of client $$ so it matters and I worry a whole LOT about that issue!
Then again, I don't care what you do, I will help my buddy James make the right decisions

Hold until maturity and you get exactly what was promised when you bought it. A simple fact. Sorry that you don't understand that, but James should do his own Due Diligence.

#74 1 year ago
Quoted from WackyBrakke:

Just pay that damn mortgage off. Then use your extra monthly capital to invest

So is your mortgage paid off, or are you using all the money that could go towards that to buy all these NIB pinball machines?

Disclaimer- my mortgage was paid off 15 years ago and I didn't think of buying expensive pinball machines until it was.

#75 1 year ago
Quoted from o-din:

So is your mortgage paid off, or are you using all the money that could go towards that to buy all these NIB pinball machines?
Disclaimer- my mortgage was paid off 15 years ago and I didn't think of buying expensive pinball machines until it was.

I try to balance life. Toys are good, but I do pay extra every month towards the principle and I always put bonuses and other unexpected money mostly to the mortgage. If all goes as planned I will have paid my house off approx 7 years from when I bought it, I bought it in 2017. Paying it off early will save me about 400k in interest.

#76 1 year ago
Quoted from MrBally:

College educations for kids or grandkids. Offers the best payback.

Our greatest natural resource is the minds of our children. Walt Disney

#77 1 year ago
Quoted from WackyBrakke:

I try to balance life. Toys are good, but I do pay extra every month towards the principle and I always put bonuses and other unexpected money mostly to the mortgage. If all goes as planned I will have paid my house off approx 7 years from when I bought it, I bought it in 2017. Paying it off early will save me about 400k in interest.

You were correct the first time- pay off the mortgage!

Disclaimer- before mine was paid off, I spent a lot of money and time on Jeep and other old car junk.

#78 1 year ago
Quoted from hawkmoon:

Hard question!! Some would say buy real estate! I have 1.5mil in the stock market and pull 45k per annum on that sum! Best to go to a financial expert! Not a Bank! Good luck!!!!

PM me your financial expert - sweet!

#79 1 year ago
Quoted from lancestorm:

I thought the going rate was $1M.

At The Moonlight Bunny Ranch in Carson City, you can have that for $2500.00/hr. Choice of the better looking girls who will participate too. An hour is all some of us need. Unless you want to wake up with them for "Round 2"; then you're looking at $12K. Still not too bad.

#80 1 year ago

A nice old sports car. I'd save the rest. $$$$

#81 1 year ago

Some great answers have been given here!

Assuming you have already paid off all debt.

First thing I would do is buy John Bogle’s “Little Book of Common Sense Investing”.

amazon.com link »

I would then heed Mr. Bogle’s advice and invest in Vanguard Index funds and avoid any financial intermediaries. Investing is easy. It just requires discipline.

Depending on what your objectives are you might invest a portion of the money in the Vanguard High Yield Corporate Fund, particularly if you need interest income to live off of.

In the long run stocks are the safest investment because they outpace inflation. If you are a buy and hold investor and can tolerate severe market swings with potential for greater than 50% declines without panicking, like we experienced with the dot com bubble and Great Recession, you will be rewarded.

Of course you will want to take advantage of any 401(k) matches you might get at work, and also maximize your Roth contributions since that’s the best deal you will ever get from the government.

The most important thing is to keep your investing costs low! That’s why Vanguard is the best. They aren’t publicly traded or privately owned. Due to this unique structure they don’t need to generate profits to distribute to others. Vanguard is owned by the shareholders themselves and therefore operate at cost. Every basis point in expenses you can save adds to your return. Rely on the power of low costs, simplicity, and tax efficiency. Those are fundamental principles that work to your advantage year after year.

Look up “Compound interest calculator” and run a few numbers yourself to see what a huge difference saving expenses makes over time. You won’t belive it until you see it for yourself. That’s why financial advisors are to be avoided. Bogle refers to them as “the gradual transfer of wealth from the investor to the financial intermediary”. He’s right. Read his book. Everything is there.

#82 1 year ago

That would get me really close to paying off my home, so I would put it there without hesitation.

#83 1 year ago

An advisor told me (pending your tax bracket) you can pay off your house but then you lose the tax savings benefits. I guess the key there is pending your tax bracket? Survey says......

#84 1 year ago
Quoted from badbilly27:

An advisor told me (pending your tax bracket) you can pay off your house but then you lose the tax savings benefits. I guess the key there is pending your tax bracket? Survey says......

Anyone who has refinanced or purchased in the last 10 years probably has has a sub 4% mortgage anyway so it’s not about the tax effect. It’s about the freedom.

#85 1 year ago
Quoted from badbilly27:

An advisor told me (pending your tax bracket) you can pay off your house but then you lose the tax savings benefits. I guess the key there is pending your tax bracket? Survey says......

Well, mortgage interest is tax deductible...that is true. So yeah you’re not technically “paying” all that interest, but still 60%-70% of it is out of pocket. At the end of the day paying that mortgage off is still a good idea. Less monthly obligations is always a good plan. Could you earn more on it elsewhere, yes. Could you loose money investing it elsewhere, yes. Pay the house off, then use what you were paying to the mortgage and invest that.

-1
#86 1 year ago

General Electric

#87 1 year ago

Lottery Tickets, Now! See other thread....!!

#88 1 year ago
Quoted from badbilly27:

An advisor told me (pending your tax bracket) you can pay off your house but then you lose the tax savings benefits. I guess the key there is pending your tax bracket? Survey says......

Except nobody will itemize Schedule A anymore with the tax changes mostly everyone is takingthe standard deduction. So the mortgage tax deduction has been pretty much neutered. That advisor advice must be a couple of years old I guess, no longer applies. Paying off that mortgage is even more relevant now.

#89 1 year ago
Quoted from KozMckPinball:

Hold until maturity and you get exactly what was promised when you bought it. A simple fact. Sorry that you don't understand that, but James should do his own Due Diligence.

Sorry you don't get it brother.

If I'm holding a 4% bond 15 yr bond right now for $100k, of course you are going to get your principal back in ...........15 yrs

Meanwhile, with rates rising, you would be a FOOL to hold it for 15 yrs! I thought that would be obvious to you. It's why the short end of the curve, if any bonds, is the only place to be right now.

The same bond today yields 5.5%. The same bond yields 7% next year. The same bond yields 10% in 5 yrs. For new buyers.

It's called "lost opportunity cost" and NOT keeping up with inflation and rising rates.

It's not really that hard to understand!

#90 1 year ago
Quoted from KozMckPinball:

Except nobody will itemize Schedule A anymore with the tax changes mostly everyone is takingthe standard deduction. So the mortgage tax deduction has been pretty much neutered. That advisor advice must be a couple of years old I guess, no longer applies. Paying off that mortgage is even more relevant now.

Wrong again but then again I’m only a CPA, tax attorney and advisor responsible for managing $300 million AUM

Every case is different. That’s why you “consult your tax advisor”. A ton of variables

Then again I’m sure your Pinside expert has all the answers

How much does the equity in your home earn? How about when the recession hits?

#91 1 year ago
Quoted from iceman44:

Sorry you don't get it brother.
If I'm holding a 4% bond 15 yr bond right now for $100k, of course you are going to get your principal back in 15 yrs.
Meanwhile, with rates rising, you would be a FOOL to hold it for 15 yrs! I thought that would be obvious to you. It's why the short end of the curve, if any bonds, is the only place to be right now.
The same bond today yields 5.5%. The same bond yields 7% next year. The same bond yields 10% in 5 yrs. For new buyers.
It's called "lost opportunity cost" and NOT keeping up with inflation and rising rates.
It's not really that hard to understand!

I don't know you. You stated "lost opportunity cost" as the reason for not holding US Bonds long term. Yes, we are saying the same thing. Maybe you need to work on your communication skills who knows? It sounded as if you think the value of my bond is less with interest rates rising when I said that I'd hold until maturity. That would be untrue, I'd get exactly what was promised, regardless what happened over the course of the bond maturity. Now inflation erosion would be a reason for not going very long term, but every individual can figure out bond maturities for themselves. Maybe you have a trader's mentality, but I am sure Buffett would tell you to stay the course. Hold until maturity and sleep well at night. Leave the bond trading to the receding hairline traders. Buy an FDIC backed bank CD and cut out the guys like you entirely.

#92 1 year ago

250k is hard to explain to uncle Sam. I might just keep the cash and buy pinballs, furniture, and possibly renovate my home with the cash. Hopefully not laying taxes in the process

#93 1 year ago
Quoted from Mikedenton49:

liquidity in fiat currency is the saddest of all endeavours.

I would get a little sadder.Everybody has plenty of stuff, 401k, pension, SS, real estate, but nobody has any money, cash.
(These generalizations are for illustrative purposes only)

#94 1 year ago

Invest in my buddies and my phone app game we are developing

#95 1 year ago
Quoted from KozMckPinball:

Now inflation erosion would be a reason for not going very long term, but every individual can figure out bond maturities for themselves. Maybe you have a trader's mentality, but I am sure Buffett would tell you to stay the course. Hold until maturity and sleep well at night. Leave the bond trading to the receding hairline traders. Buy an FDIC backed bank CD and cut out the guys like you entirely.

Keep telling yourself that if it makes you feel better. But you just pointed how you lost money by locking into a long term bond yesterday, today and tomorrow. It's not just inflation, its RISING INTEREST RATES that crush bond yields, unless you own "floating rate" or "Tips"

Buy a 2 yr. treasury bond at 2.80%? Ok, that carries well in a rising interest rate environment. That's what i would do today in most cases if i needed liquidity and wanted to "sleep well at night".

Long term bonds have been a horrendous purchase this year and will be well into the forseeable future.

Buy the 2 yr. for safety, let the Fed get done raising rates and normalizing THEN your long term bond risk, depending on the yield curve at the time, if its not inverted because of looming recession, might provide a better option.

I'm not a trader, I'm a fee based fiduciary. And i promise you, my clients don't want to see a 5% unrealized loss on BONDS for 2018 and explain to them, oh don't worry, just give it another 15 years and those bonds will go back to Par, meanwhile as rates rise your yield keeps getting hammered.

As far as taxes go, there is zero tax effect for that $250k gift for James, IRS could care less, unless the Grantor has an estate in excess of $11.18 million, which you can use during your lifetime or at death (and i know he doesn't )

So the other comment about keeping it in cash is ridiculous.

#96 1 year ago
Quoted from iceman44:

Wrong again but then again I’m only a CPA, tax attorney and advisor responsible for managing $300 million AUM
Every case is different. That’s why you “consult your tax advisor”. A ton of variables
Then again I’m sure your Pinside expert has all the answers
How much does the equity in your home earn? How about when the recession hits?

You both are right, the number of individuals itemizing is estimated to go from 1 of 3 to about 1 of 7. That’s a pretty substancial drop. Originally it was estimated it would drop to 1 of 15-20. The average person will not be itemizing. Ice, give it a rest........In typical fashion you are picking a fight for no reason. For such a smart guy, you sure do have a massive chip on your shoulder.

#97 1 year ago

Down payment one or more multi family properties. Leverage the debt to make $.

#98 1 year ago
Quoted from thedarkknight77:

You both are right, the number of individuals itemizing is estimated to go from 1 of 3 to about 1 of 7. That’s a pretty substancial drop. Originally it was estimated it would drop to 1 of 15-20. The average person will not be itemizing. Ice, give it a rest........In typical fashion you are picking a fight for no reason. For such a smart guy, you sure do have a massive chip on your shoulder.

I just like to argue when I know I’m right. No chip! I care about what happens to people

It’s the bond thing that drives me crazy when people don’t get it. It’s not intuitive and people get blindsided and will continue to say “wtf” as rates go up. It’s a HUGE problem

The whole tax cut for the 1% is such BS. Everybody across the board is getting to keep more of their money. I’ve run the numbers up and down the ladder for my clients in 2018

So many $$ in the 22 and 24% brackets this year to take advantage of. Especially Roth conversion where appropriate.

Taxes will never be lower in our lifetimes so better buy while on sale

Anyhow, the Op James gets it

#99 1 year ago
Quoted from GPS:

General Electric

GE is a horrible performer right now and has systemic issues. Would avoid like the plague.

#100 1 year ago
Quoted from thedarkknight77:

The average person will not be itemizing.

Don’t know Iceman at all but based upon his bona fides, he is not dealing with the average person. From what he has relayed in this thread he is right on the money.

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