SavingsTalk.com

briansol

If you suddenly came into 100,000, be it from a lawsuit, the lotto, found on the street, or what have you, what would you do with it?

titan22

Have you ever heard of the saying, "do as I say, not as I do."

If this is a one time windfall, I would have to be more conservative than I would like to be. My heart says to go out and pay off bills, go on a huge vacation around the world and see whats left when I get back. But then my brain kicks in.

In reality, I would break it down pretty basically.

20%-Down payment on my first House. I have wanted to be a homeowner for the longest. It is the last thing I want to accomplish BEFORE I settle down with a wife.

20%-Rental property. I want to buy a house and Rent it out. Whether it be here or in a vacation spot such as florida or arizona. Then i would have two properties gaining value and i would have my own place to vacation to also if i wasn't renting it out. Also, the rental would provide income to pay for the mortgage and insurance and i would gain the value of the equity. I would obviously have some sort of property manager also.

20%-Conservative bond fund or money management. I would use this to pay for the mortgages of my property i live in and the rental if it is unoccupied. It would be at a modest 5% return, but if the mortgage is at 6% and real estate and property grow at 7% annually, I come out way ahead in the deal.

30%- College fund for my family. My sister is 13 and will need to start thinking about college soon. Also, if i were to have a kid i would want that funding out of the way also. $30k now invested at 10% over the next 7 years would give me $60k to spend. College is the key.

10%-I would put a down payment on a car and have a little fun money. I have enough income to pay for everything i have. I would just like to have a nice car and maybe take a little vacation to japan or something. $5k on a car and $5k on a vacation, what the hell, i deserve it.

I don't have a lot of personal debt though. A lot of people and readers do. If you have any outstanding loans or debt that is over 10% APR, I would pay that off first. Don't pay off school loans, low interest car loans, or minor credit cards. Obviously you would want to pay any outstanding debt that is in collections or past due.

And for god's sake, if you have a million kids running around, help yourself out and use that money on birth control. haha, that's just my .02. my thoughts do not directly represent savingstalk.com or its owner.

briansol

Well, to answer my own question:

A) pay off my car (40%)
B) pay off my credit cards (5%)
C) Build a new computer and get a flat screen in my room (5%)
D) Put 10 grand towards my mortgage (10%)

With the remaining 40,000, I'd set up some rolling CD's.
Meaning, create 24 2-year CD's over the course of the 2 years, open up one new account a month, for 24 months, each with $1667 in them.
for the 23 months up to the last month, I will just have the money in a regular savings account earning some interest.

Why do this?

Should I ever loose my job, I'm straight with my mortgage and enough left over for food and some other bills for 2 years, without loosing any interest i may have
accumlated over the years.

Should I never use it, every 2 years, it will re-new, and earn me some interest.... say $5 a month each account.

20 years from now, it might actually be worth something.

With my regular job, I would then be able to focus more money towards my other investment goals (as my car would be paid off, thus freeing up almost 900/ month) and doing better things than playing it 'safe' with the CD's.

titan22

i'm not too sure of what your interest rates are on your mortgage and car, but it might be better to invest and 7-10% and use that profit to pay your bills. if you have low interest, you could pay with your growth and keep your pay check in your pocket, or invest that also.

briansol

Unfortunately, I do not. My goal this year is to pay off the car ASAP. used car laons suck, and I got hit with 7.5% on it.
my mortgage is 6.5%

James

100,000 to myself.

a. Pay this house off, 50,000 left.
b. Pay the car off & all other debts off, 39,000 left.
c. Appliances, redoing the kitchen, garage, painting, etc. (lets say) 21,500 left
d. Have a little fun, 'binge' spend on a few small items. 16,500 left
e. Invest 10,000 in several bonds, stocks, IRAs, etc.
f. 6,500 put away in a small bank account accrueing small amounts of interest.

titan22

i wish i lived somewhere that 50k could pay off a house. 50k is 20% here.

James