Lump sum settlement

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Lump sum settlement Anonymous 06/20/19 (Thu) 04:03:57 2051b5 No.4212

I come here seeking some wisdom, if anyones got some to offer. I am in a position where I could potentially 'make something of myself'… I am receiving a fairly large settlement that will be around $50k net. The settlement is resulting from me getting kiked for the past 10 years. And I feel it would be a crime for me to not turn this into as much money as possible.

I am at a loss for what to do with it. Just having it sit in a bank account seems like it would be a move almost as dumb as spending it all like a nigger. I also don't want to throw it into some fund that wont pay off until Im 50+.

I think I have a pretty decent understanding of how the market works but have never dabbled…

Would you lads mind telling me what you would do with the money? Or if thats too much maybe give me some ideas of what sort of things I should look into? Someone told me I should look into REIT's but I am not sure what to make of them as far as risk/reward goes.

____________________________

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Anonymous 06/20/19 (Thu) 05:35:18 1ff6de No.4214

>>4212

depends. do you have debt? a job? are you planning any large purchases (eg. school, car)? etc.

once you're set on investing read into index investing and the Boglehead philosophy. almost everything else you'll find will be some kind of snake oil or scam.

https://www.bogleheads.org/wiki/Getting_started

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Anonymous 06/20/19 (Thu) 05:49:44 2051b5 No.4215

>>4214

I am doing well for myself as far as income goes. My income covers all of my bills with a couple hundred left over for emergency spending/play money. I have some debt but my new monthly income (which is an additional part of my settlement (~40k per year) and guaranteed for life as long as the economy doesnt take a shit) will facilitate me being able to pay it off very quickly.

Basically this $47-53k is going to be a sum of money that I absolutely do not NEED to survive. I may eventually use some of it for a downpayment on a house, but aside from that it is pure liquid cash.

Reading your link now. Thanks.

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Anonymous 06/20/19 (Thu) 06:37:24 1ff6de No.4216

>>4215

>I have some debt

rule of thumb is to just pay off the debt now in a lump sum. if the rate is low enough (lower than ~3%) you could plausibly do better by investing the money instead, but it's generally not worth the headache.

>Basically this $47-53k is going to be a sum of money that I absolutely do not NEED to survive

other than creating an emergency fund that sounds like investable income. how much risk/volatility you take with that investment is something you'll have to figure out yourself or with the help of a professional.

also I'm not familiar with the US tax system but look into tax advantaged accounts. 401k or IRA or whatever it is.

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Anonymous 06/20/19 (Thu) 06:47:52 2051b5 No.4217

>>4216

Id rather not use the lump sum to pay off the debt because with this new income I will be able to pay it off in 5 months so Im trying to compartmentalize the lump sum.

Im not sure I want to put it into a 401k/ira because those take penalties if you withdraw before being elderly. What I am trying to figure out is somewhere I guess around a 5-8% return that isnt a life long commitment.

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Anonymous 06/20/19 (Thu) 07:10:24 1ff6de No.4218

>>4217

>Id rather not use the lump sum to pay off the debt because with this new income I will be able to pay it off in 5 months so Im trying to compartmentalize the lump sum.

unless that debt is interest free, not paying that interest is the same as getting a guaranteed investment with the same rate. it's a good deal most of the time.

compartmentalizing, or mental accounting is generally not great for overall returns.

https://www.investopedia.com/terms/m/mentalaccounting.asp

>Im not sure I want to put it into a 401k/ira because those take penalties if you withdraw before being elderly.

tax advantaged accounts can have an exception for home purchases and education. at least here.

>What I am trying to figure out is somewhere I guess around a 5-8% return that isnt a life long commitment.

stocks will get you 5-8% on average, but you'll want to make a "soft" commitment to yourself so you don't take the money out in a recession. there just aren't any investments right now that will return 5% every year reliably, even if you lock it away.

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Anonymous 06/20/19 (Thu) 20:01:21 5eb675 No.4219

Get some land, or crypto

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