You receive a substantial inheritance

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Sep 7, 2006 10:29 am

For those of you that love this job and your clients...


Say that you just inherited $3.5 million (after tax). What would you do?



Sep 7, 2006 11:00 am

Ahhhhh.... I think about this often.....


First off , pay down about 20K in student loan debt. Then, I would help out my rents with their second home (they have about 150K left on the mortgage- not sure if I would completely pay it off or what), then move them out to SoCal (helping them with renting a nice condo for about 6 months until the housing decline really starts to hit home around here, then swoop in and finance a nice home near the beach).


With the remaining say 3M... I would invest about $1.5M at NAV in Davis NY Venture, Columbia Acorn, Columbia Marsico 21st Century, Thornburg International Value and Loomis Sayles Strategic Income. $1M would go into some laddered muni bonds, and about 300K into say Franklin CA Tax Free Income.


The remaining 200K would be placed into our tax free MM at 3.4%...


Of course, at some point I would probably take a nice VACA for 2 weeks and celebrate....

Sep 7, 2006 11:56 am

Blarmston would not pay off his student loans, just pay them down.  Great financial planning there.


Blarmston would not buy himself a home, or pay off his own mortgage, instead he'd rent his parents an apartment--one supposes so he could move back home to let Mom pick up his room.


It's amazing to this adult that children such as him are allowed to offer financial planning advice for others.

Sep 7, 2006 12:05 pm

20K in student loans, so if I pay down 20K, that leaves a zero balance....


You did read that I would suggest they rent for a couple months in order to assess the housing climate and find an ideal place, didnt you???


And no... I would not buy a home right now, because it reamins to be seen whether I stay in SD or move up north more to Orange County in a couple years... So I would not be impulsive and run out and purchase a home...


It's amazing how jaded you are... Life's that bad??? You see the negative in everything and examine posts to try to undermine others and sling crap at their thoughts...


By the way- you would be amazed how many people are allowing me to offer financial advice to them and manage their investments... Guess the kid knows what he's doing...


Later old man...




Sep 7, 2006 12:21 pm
blarmston:

By the way- you would be amazed how many people are allowing me to offer financial advice to them and manage their investments... Guess the kid knows what he's doing...



Get back with us when the guarantee runs out.  Meanwhile go work on your tan.

Sep 7, 2006 12:41 pm

Thats great advice.... I will be sure to do that on Sat and Sun afternoon....


In the meantime, I will be doing something productive and meaningful with my life....


I am also looking forward to logging on to this website on Sunday evening and perusing the 387 posts you have made since this morning...


Talk to you soon old man... Love you guy...

Sep 7, 2006 12:56 pm
san fran broker:

For those of you that love this job and your clients...


Say that you just inherited $3.5 million (after tax). What would you do?





Probably nothing.

Sep 7, 2006 1:13 pm

This question is one that my husband and I think about whenever we buy a lottery ticket.  Hey.... you can't win if you don't play.  We mostly agree on what we would do with some exceptions.


We would first pay off all debt including the mortgage, auto loan and a few credit cards.  Total 210K. 


Next we would purchase the property across the road from us to move my husband's workshop for his business from our residential property and for his large equipment storage. In addition we would build an additional workshop for a classic automotive restoration business on that property. (A dream my husband has had for some time.)  Renovate the existing shop to a crafting workshop for me on the first story and a studio apartment/office on the second story.  Cost about 400K.


We would establish and seed fund a charitable foundation to create a benefit to our community.  Undecided exactly what projects would be in the charter, but would include scholarships for young people who want to train in vocational careers and create a recreation/senior citizen center opportunity.  Seed funding about 300k .  Of course as founders and board members, we would also be able to draw a salary from the foundation and direct the investments of the foundation.


Setting aside some money to buy a classic auto/hot rod or two, take a vacation, buy a few trinkets and have the yard professionally landscaped (I want new decks and hardscape)  200K to 300K  We pretty much have everything we need or want at this time and don't especially like to travel


The remaining 2.2 approx million would be invested in a combination of AMT eligible tax free investments, with some liquidity in short term tax free MMKT and about 200k in some growth investments.


We would continue to work at our respective businesses, since we both enjoy what we do.  We may not have to work as hard, however. The income from the tax free investments, current income and taking tax breaks from the new commercial property and new business investment, plus the charitable foundation would be more than adequate for our needs.


Our families don't need any help financially. No need for college funding.  We might take them on our vacation......... Maybe.


It's fun to dream about this and as you can see we have thought abuot it a lot.   In the meantime.   Sigh....back to work in the real world.

Sep 7, 2006 1:40 pm

I have no significant debt so I would use the money to buy drinks and table dances for an evening at Scores in New York--but I'd waste the rest.

Sep 7, 2006 2:13 pm

Didn't Tug McGraw say basically the same thing when they asked him what he's going to do with his playoff money? Either way I like the thinking.


I would buy a nicer house. $500k would buy all the house I would ever need where I live. Then a small ranch for another $500k. Live off the income of the remaining $ and travel much more. Probably put house, ranch and $ into a trust to protect from any lawsuits, future ex wives, etc.

Sep 7, 2006 3:34 pm
knucklehead:
san fran broker:

For those of you that love this job and your clients...


Say that you just inherited $3.5 million (after tax). What would you do?




Probably nothing.




Same here…at least not for a few months so that I give myself the appropriate time to assess the situation.<?:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />


 


What were the intentions of the person who bequeathed the money to me?


 


$3.5mm after taxes is a lot of money but it still can be easily pissed away in one lifetime.  I would want to ensure that I set things up in a way where I could help ensure that my future generations will receive benefit from the inheritance.  If you are not careful one can go from rages to riches to rags in just three generations.


 


--WM


Sep 7, 2006 3:59 pm

I'd donate it to NASD Newbies' psycotherapy fund, he needs all the help he can get....poor guy.

Sep 8, 2006 10:15 am
dude:

I'd donate it to NASD Newbies' psycotherapy fund, he needs all the help he can get....poor guy.


$3.5mm would be a good start.

Sep 8, 2006 10:51 am

I would take most of it and go to Vegas and blow it all on booze, loose women, and gambling.