A friend of mine just inherited $25,000 from a family member. Let me sum up the friend for you: 38 yrs old and generally can't get his act together. Employed, but not at a very well paying job, lives with a roommate, no vehicle. Horrible credit.
I think he should spend just a few thousand on a reliable vehicle, get his credit cleaned up, put a couple thousand in an emergency fund, and put the rest in an account for retirement. Is this good advice?
2007-08-06 09:53:35 · 14 answers · asked by HEATHER 6 in Business & Finance ➔ Investing
He should buy a tank so that he can crush his enemies like the worms they are
2007-08-07 04:03:18 · answer #1 · answered by riffwell 2 · 0⤊ 0⤋
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2007-08-06 11:14:20 · answer #2 · answered by Anonymous · 0⤊ 1⤋
that is great advice, especially in that you divide up the "big" amount into smaller amounts to attack multiple problems and really make a difference
If he needs a vehicle that might be a priority, then again a lot of people who live in urban areas only generate more expenses for parking and insurance when they own a vehicle that only gets used occasionally
The retirement account can be set up as "replacement income" where you set up a payroll deduction into a 401k account (pretax), but use the inheritance $$$ to replace that lost income. He might get more into the account that way.
Just having a plan is a good idea, because it's not that hard to just fritter it away on a few splurges and all of a sudden it's all gone.
He might like to make a donation to a favorite good cause also.
2007-08-06 10:03:41 · answer #3 · answered by yyyyyy 6 · 0⤊ 1⤋
Seems like you care quite a bit for this friend.
Since you care about him, you should help him put his life in order.
Perhaps the first thing he should do is pay off all his debt.
Then he should get a better paying job (maybe you could help him out here).
As for a vehicle, it might not be necessary if his workplace is within bus or subway reach (A vehicle is additional regular expenses like gas, insurance, maintenance, etc).
And finally, he doesn't seems to a wife yet since he's living with a roommate, so perhaps you could help him out to find a wife.
2007-08-07 05:25:10 · answer #4 · answered by Jiniya 2 · 0⤊ 0⤋
lose his virginity. Lower credit card interest rates and pay off the bills. And then give some $$$$ to me. put the rest of the money into a cd
2007-08-06 10:56:35 · answer #5 · answered by Anonymous · 0⤊ 0⤋
This was "surprise" income, so he should really invest all of it for his retirement (so that you & I don't have to support him!).
He can reasonably assume that if he invests it all in a respectable Growth Mutual fund, he'll have about $540,000 at retirement age. Not enough to live on, but he can add to it over the next 30 years.
Though your suggestion is great if you can trust he won't spend $10,000 on a car, dwindle away his "emergency fund", and lose the rest playing cards!
2007-08-06 10:02:13 · answer #6 · answered by Anonymous · 1⤊ 2⤋
It's great advice. From your description I predict a spending spree, a trip to Vegas and nothing left for a bus pass.
2007-08-06 10:06:10 · answer #7 · answered by Stand-up philosopher. It's good to be the King 7 · 1⤊ 1⤋
Yes...and take 5 thousand over to a broker , Merill Lynch or someone and invest it.
2007-08-06 11:48:44 · answer #8 · answered by bugsy 2 · 0⤊ 1⤋
Generally, good advice, Heather.
Of course, it sounds like this guy is not liable to stick with the advice...
2007-08-06 10:19:32 · answer #9 · answered by Bryan A 3 · 0⤊ 1⤋
Buy a house. It is a great investment.
2007-08-06 09:57:23 · answer #10 · answered by ME 2 · 0⤊ 2⤋