Should I use the Stock inheritance to pay off my education loans nursing school $ 36,000.00 @ 8.25%.And use $50,000.00 i.e. 20% down payment on a $250,000 condo...and invest the rest on mutual funds and bonds
2006-12-28 09:58:30 · 7 answers · asked by cmhohioman 1 in Business & Finance ➔ Investing
I would advise you to get rid of that $36,000 in debt. It is a gauranteed 8.25% investment by paying it off. One less monthly bill to worry about too!
I would also suggest paying off your house in full so you don't have any mortgage at all! This will also lower your monthly living costs. Also in the next ten years there is a chance interest rates could skyrocket.
You will still have $114k left to invest and you can also continue to add to your investments by $1,000 or $1,500 a month (instead of paying mortgage).
That way if the stock market or economy ever goes bad, at least your home and your debts are paid off (you only have to worry about food and utilities...). Plus $114k, with an additional $1,000 each month is quite a good start to an investment portfolio anyways. If you can get a compound rate of return of about 10% in the long run, that 114k, plus $1,000 each month will turn into $10.5 million in 40 years, 4 mill in 30 years, 1.5mill in 20 years. If you get lucky and get higher than 10%, say 12 percent, then instead of that 10.5 mill in 40 years, it would be almost 20 million! The rate of return you get is very important as is the number of years.
Some would say the best is to invest the most of it and pay a mortgage... however there are other factors at play... wars, economy is changing and outsourcing is increasing the competitive nature of business. The dollar is falling, etc. Peace of mind combined with a good investment portfolio is best in my opinion. Plus, c'mon, not having to worry about a mortgage for the next thirty years is pretty nice! Buy that house, pay off the debt, relax, earn, invest, retire, travel. Read the article in the link below for a better explanation on why I would actually buy that house rather than just put a downpayment.
2006-12-28 11:38:24 · answer #1 · answered by ulchka 3 · 1⤊ 0⤋
You definitely should pay the loan. I agree with the condo. Are you going to rent it out? Or will you live in it? Ask your accountant if the interest you will be paying is tax deductible. If it won't, I recommend putting more as down payment as it will reduce your interest bill. That will give you extra room if you increase your spending. About the mutual funds, you should consider investing yourself (unless investing is not your cup of tea) since you have room to manoeuvre. Most people don't. So they can't lose a peny. You, on the other hand, can invest some fortune in educating yourself about investing.
2006-12-29 05:16:40 · answer #2 · answered by Sang Suci 2 · 0⤊ 0⤋
I think that is a good idea. Because I don't know how old you are, but if you are like 25, who can say they have a house and debt by that age? I think that is the way to go and lucky you! I am getting married, I wish I had the money to do all of that too! I would invest the rest though, don't spend foolishly! Good luck and congrats. Sorry about your father too :(
2006-12-28 10:08:14 · answer #3 · answered by Peek A Boo 2 · 0⤊ 0⤋
i'm no longer too specific, yet i do no longer think of the credit card business enterprise can take something it wasn't used to pay with. EX: your mortage is in all risk from a financial company, meaning in case you defaluted on money the financial company would take your place. comparable theory as your credit enjoying cards. in case you probably did no longer use it to purchase your place, or vehicles, then i do no longer hink you have something to tension approximately. additionally, inyour state do you ahev something like charity shelter your scientific expenses? it could pay a undeniable quantity if no longer all of the invoice. Ask somebody in the wellbeing midsection billing place of work. My sis replaced into approved and the wellbeing midsection paid her invoice.
2016-12-15 10:03:28 · answer #4 · answered by ? 4 · 0⤊ 0⤋
whenever you have the opportunity to pay off a debt, it is the right thing to do
also, 20% is a good down payment. I'm not sure where you live but in Toronto I think if you put down 25% or more you don't have to pay mortgage insurance
2006-12-28 10:06:04 · answer #5 · answered by UpNorth 4 · 1⤊ 1⤋
If you can make more than 8.25% by investing the money, you should invest it. However, that is unlikely, so pay off your debts.
2006-12-28 10:02:27 · answer #6 · answered by Phoenix, Wise Guru 7 · 1⤊ 0⤋
allocate 10,000 for a professional financial advisor and he'll do up the split in the most sensible way
2006-12-28 10:04:54 · answer #7 · answered by Anonymous · 0⤊ 2⤋