What should I do with $150 grand?

Question

Should I use it for housing downpayment? add it to my Roth IRA? my kid's college fund? Need some advice, I dont want to make a wrong decision.

Answer 1

What a good problem to have!

Start by paying off any revolving debt you have (credit cards, car loans, etc.), put the rest in a safe investment (money market or 3-6 month CD), then make an appointment with a fee-only financial planner to help you decide what to do with the rest of the money. This type of planner will charge you a flat fee or a percentage of your portfolio; which is better than a broker that gets paid commission (you don't want someone helping you that gets paid for selling investments).

I would wait to purchase a house until the troubles with the housing market cool off. It's generally a better idea to get on track to saving for retirement before saving for your kid's college (remember, you can always borrow for college, but not to retire).

Again, all these issues should be discussed with a professional adviser.

Answer 2

First go on a great vacation - you deserve it! Then pay off any old bills or credit cards or debts you may have. Then invest some in stocks/bonds to ensure it will grow over the years. Last invest some in your kid's college fund and/or your retirement plan. Some would say contribute to your kid's college first but with inflation the way it is now, theres no way to ever save enough to completely pay for college. With any left use it to move or buy a new house if thats what you want or just take it and blow it.

Answer 3

why not use it for all... if your kids are young, you can invest some in their names and when they are ready for college they will at least have a good amount to use for college. Also why not add a little to your IRA, you can only add so much of that per year so double check with your tax adviser. If you are looking to buy a new house even a quarter of it would be a good down payment. Why put it in one place, you can do more good if you spread it around

Answer 4

With all due respect to the others, I think this question is unanswerable with the limited information available.

What are your other assets? Liabilities? How much are you already saving each month? How old are your kid(s)?, how many kids do you have.

How old are you? when do you want to retire? How much income do you need when you retire?....

There is a lot to consider!

Find a Certified Financial Planner that you can trust. They will disclose to you their fees up front for consulting you, and get some GOOD answers. $150,000 is way to much to rely on an anonymous tip you receive here!

Answer 5

Give it to me. JK! One hundred fifty grand is a lot of money. You could use it for the kids college fund. I don't know how many kids you have or how old they are. I would put it to work until the kids are ready to go to college. Put it in real estate is a good ideal. At least you will have something. Real estate just always about goes up.

Answer 6

Use it for a house downpayment and get mortgage free as soon as you can. Putting 150,000 down will SAVE you almost half a million in payments and interest in the long run.

Answer 7

In my humble opinion, the answer lies in your wealth goals and risk tolerance for loss. If you want a safe return...choose a mutual fund with at least a 10 year history of consistent 15%+ annual returns. A 20 year history would be even better.

But if I were you...I would do the following...
Keep in mind these prerequisites are a MUST and I'm assuming they are done already:
* 3 months salary in a high yield, liquid, money market account for emergencies earning at least 4% APR. (you can easily earn this in a brokerage account. Get a debit card on it and don't use regular, low paying, banks)
* Own your own home with a 30 year interest only, fixed mortgage, with payments going towards principle equivalent to a conventional 30 year fixed mortgage payment. You add the difference from the interest only payment (from the conventional payment) directly to the principle. In 10 years you will have more equity because your payments are being applied to principle right away. Verify it in your amortization schedule.
* Don't establish a college fund. You can always have your children get school loans at "excellent" interest rates and have your cash working for you even more, elsewhere. You pay for expenses like college in cash, with your investment gains. Always borrow wisely.
* If you have debt, pay it off UNLESS you are using the cash that's yielding a higher amount of interest than your credit/loan account interest rate. In effect, you are making money on the difference in rates and THAT is mastering "good" debt. You must be "bad" debt-free if you want to be a good investor.

Now for the Plan....
1. Allocate 90% ($135,000) for super, high-yield SAFE investments. A super, high-yield investment is one that is earning more than 20% a year, safely. (Business, Investment Real Estate, Currencies, and Stocks) Max your Roth-IRA.
2. Allocate 10% ($15,000) to learn to trade stock options and more specifically, LEAPs. A LEAP is a long term stock option. (Long-term Equity APpreciation securities) The reason why you should learn options is because of Leverage. Leverage without margin calls. You will not find leverage of 1000:1 anywhere else. Believe me, they are worth it.

Master them and you'll be able to invest safely and faster than you ever knew before. **investing in options should be ONLY with risk capital** You can lose it all and that is why you must be disciplined to risk only a tolerable 10%. If you don't understand what it means to have proper discipline in life, you will only hurt yourself and take longer to get to level2 and beyond. I know some people in level1 their whole life!
**Always invest in at least 4 securities. So $3,750 each if you are trading $15,000 in stock options. Focus and concentrate your money but preferably have 2 bullish and 2 bearish trades at any given time for proper asset allocation and diversification, for whatever happens in the market.

Once your knowledge level increases...you can be like me and allocate 50% safe and 50% stock options. Determine and Accept (DaA) your risk levels at all times. If you can't sleep like a baby at night, you are not investing properly. DaA!!!! hehe

May halcyon times be yours....
-Renz

Answer 8

$150,000 is NOT a down payment. It is an entire house. Aside from that point, any of the options you list are good.

Answer 9

would you like to buy 50% of a radio station?

Answer 10

Get yourself settled... invest the rest!