Inheriting $850k

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Inheriting $850k

What should I do?
	Stockmarket/investment account
	Franchise
	Other
	Hookers and/or blow
	I hate you

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

If you don't need the money anytime soon, just dump it into index funds; unlike a franchise or real estate, index funds are still relatively liquid, so you can always pull the money out and doing something else with it if/when you change your mind. If you're paranoid about an impending crash you can invest it gradually.

Sounds like you're American, so you can use VTSAX (Vanguard Total Stock Market), VTIAX (Vanguard International Stock Market), and VBTLX (Vanguard Total Bond Market).

What % in bonds depends on your risk profile, so think about how long it'll be before you need this money and how you would react to $200,000 being wiped out one year in a recession.

And yeah, read a lot: https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investing_start-up_kit, http://forums.somethingawful.com/showthread.php?threadid=2892928, http://jlcollinsnh.com/stock-series/

edit: and be very careful about 'professional help'. The finance industry is full of charismatic and seemingly-knowledgeable dudes who will sound reassuring and make investing sound very complicated so they can get you into loaded, high expense ratio funds that give them a big bonus.

Cicero fucked around with this message at 01:36 on Sep 5, 2015

# ¿ Sep 5, 2015 01:29

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# ¿ May 17, 2024 23:59

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

Lprsti99 posted:

E: Also, what's the deal with the Vanguard links? I've never payed much attention to the stock market before now.

Those are index funds. Index funds are passively-managed mutual funds. A mutual fund is essentially a collection of investments (e.g. stock shares of 100 different companies) being traded as a single object. Index funds are passively managed because they passively track an index like the S&P 500, rather than actively trying to beat the market by making 'smart picks'. So an S&P 500-based index fund will just buy up shares of companies in the S&P 500 in proportion to their market capitalization (how much they're worth).

The first index fund I link tracks pretty much the entire US stock market. The second one tracks stock markets outside the US. The third one tracks a huge number of bonds in the US (which are basically loans to governments/corporations). By buying shares of an index fund, you're buying a tiny little slice of a ton of companies or bonds, which means you're highly diversified: you go up and down with the whole market, rather than being subject to the successes and failures of any one company. This is both easier and less risky than trying to beat the market (and studies also show that it performs better on average).

Cicero fucked around with this message at 01:50 on Sep 5, 2015

# ¿ Sep 5, 2015 01:47

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

nurse1151 posted:

Take about half of it.. buy MONTHLY dividend paying stocks, put a stop loss on the shares. Take another quarter and put it into QUARTERLY dividend paying stocks, take the rest and keep it for an emergency fund.

I am curious as to why it's important that some stocks pay dividends monthly vs quarterly.

# ¿ Sep 6, 2015 07:54

Cicero: Dec 17, 2003; Jumpjet, melta, jumpjet. Repeat for ten minutes or until victory is assured.

GoGoGadgetChris posted:

Why is everybody acting like $850,000 should be treated differently than $85,000 or $8,500? What is this franchise/business investment horseshit? God drat!

Pretty much everyone has told him not to do a franchise, the people who have talked about investing in a business positively have still told him not to do it until years later at least. I don't know what thread you've been reading but it ain't this one.

# ¿ Sep 8, 2015 19:00

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Inheriting $850k