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About to receive a million dollar settlement...

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Money Talk > Investing, Stocks and Bonds

If you were broke and then had a million dollars, would you:
Invest it in stocks and bonds
16%
 16%  [ 1 ]
Put it in a standard savings account and draw interest
0%
 0%  [ 0 ]
Invest in mutual funds
33%
 33%  [ 2 ]
Go crazy and spend it on a good time
16%
 16%  [ 1 ]
Stick it under the mattress and pay cash for everything
0%
 0%  [ 0 ]
Not sure
33%
 33%  [ 2 ]
Total Votes : 6

Author Thread
skitt123
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About to receive a million dollar settlement...  Reply with quote  

Within the next few months, I'm going to be receiving a settlement for about a million dollars. Right now, I'm unemployed and broke, so the money will be most welcome. The problem is that I've never had any money like that. My family has always lived paycheck to paycheck. I have no idea of what to do with the money when I get it. I mean sure, I know to pay off all the bills, but I don't want to be one of those people who get a large sum of money and then end up broke in a few years. I understand that a million dollars today isn't a lot of money these days. I want this money to last me a very long time. How is this best achieved?

Facts about me:

I'm unmarried and single. I have no children and I'm 40 years old. I have a fiancee but we haven't set a date yet. I have a sick mother with many hospital bills, and the total debt I have is about $18,000. The debt of my fiancee is about $30,000. My sister is in foreclosure procedings and will need help. I want to help as much as I can but I also want to know how best to use the money when it comes in so that I don't just go crazy and then wind up broke in a couple of years.

Is it possible to simply live off of the interest? What do banks pay? Should I split it up into several accounts with different banks? No more than $100,000 in each, right? Because of FDIC insurance?

Any advice would be most welcome.

Thank you!
Post Sun Aug 22, 2010 11:24 pm
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stockomni
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I would say to invest in real estate since the prices are down or invest in a few private companies through M&A people as well as the private investment marketplaces on the web.

Real estate will not go bad, it will only dip and dive at times. Everyone needs land, so the real estate market cannot die. If you invest in companies, I suggest in investing in companies you know well and use the stock market trading sites for ideas in stocks and mutual funds
Post Mon Aug 23, 2010 2:04 pm
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rburns
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 Reply with quote  

Look into annuities.
Post Mon Aug 23, 2010 4:05 pm
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Sime
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All I need is $40k a year to be happy - so I'd probably go crazy and give a shit load to charity.

Not all countries can afford... a lavish monarchy.
Post Tue Aug 24, 2010 2:06 pm
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jusjohns
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First of all I know that you love you fiancÚ however one of the first things that you should not do is pay off all her debt. When you are married then you can help. Second of all pay as little as possible on your moms Med bills as long as you pay at least $1 for each bill they can not turn you into collections. For your Debt you should pay as little as possible to keep out of trouble. DO NOT pay it all off. Now what to do with the money Annuities are OK for large lump sums you will get the most bang for your buck. There are a few out there that will have guaranties for interest, be cautious but there are good ones that work great. What my most important suggestion is to put the money in a money market that way you can get at it and then invest some in mutual funds for safety or in the stock market if you are more daring and invest in rental properties you can find some great deals right now. I hope that this will help.
J Very Happy
Post Tue Aug 24, 2010 11:18 pm
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oldguy
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quote:
Look into annuities.


I have to disagree with rburns (maybe he is being sarcastic) - most advisors warn you to avoid annuities.

There was a state study of lottery winners who have never handled money - they go broke, on average, in about 7 years. They do it by scattering the money into several places, helping all of their friends and relatives, paying off debts, bills, Typically the $1M goes something like this - $300k to taxes, $100k to pay off house, $100k to pay off mother's house, $100k to pay off credit cards and car loans - and $100k to buy 3 new cars. Then they invest the remaining $300,000 in a few fly-by-night stocks and lose most of it.

The successful ones keep the money in a single lump, invest it in Index Funds or Target Funds, and turn it into $10,000,000 - it takes discipline and patience, normally it takes about 20 yrs for $1M to grow to $10M. We use 2 no-load fund companies - Vanguard and Fidelity, a good choice for you would be the Target2030 Fund, it is diversified and allocated for someone who will retire in 20 yrs.
Post Wed Aug 25, 2010 4:06 pm
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Sanjay
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 Reply with quote  

Another one I like is recently I purchased some French fries in the frozen food section at the grocery store. Well the kids really liked them. Prior to finding these, usually five out of seven days I was spending $2.79 for their French fries. Well at the end of the week that was costing me $14.00 which does not include gas. Over a months time that is $56.00. The bag of fries at the grocery store is two for five dollars. A bag last me two to three days. So I would have only spent $5.00 for the week versus $14.00 This puts me $9.00 ahead for the week and $36.00 ahead for the month.
Post Tue Nov 23, 2010 5:13 am
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sirmikey1
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 Reply with quote  

@Oldguy,

re: annuity, he's unemployed
He needs monthly income...
Suggestions?


@skitt,

Use Vanguard or Fidelity Investments.
They can put some of the money into
annuity to give you a monthly salary.

Suze Oman says to let fiance's 30K be
totally her responsibility. Keep pre-marriage
debt/property totally seperate.

Buy your house and receive your settlement
BEFORE you marry, but she'd still be entitled
to half of the growth income after marriage.

Try to settle family and fiance' debt for pennies
(30 cents) on the dollar. Just tell them she's
disabled and the church community offers to pay
the 30cents if they'll settle. Get this in writing before
you send money.

Keep in mind that there's a statute of
limitations on debt of a few years, where
they can't sue or garnish them after that
timeframe.
Post Tue Mar 22, 2011 11:10 am
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oldguy
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quote:
Try to settle family and fiance' debt for pennies
(30 cents) on the dollar. Just tell them she's
disabled and the church community offers to pay
the 30cents if they'll settle.


Geez. So you want him to stiff his lenders out of 70% of the money that he borrowed from them? And lie about a 'disability'? And buy an annuity? Hopefully he quit listening a few months ago.
Post Tue Mar 22, 2011 10:22 pm
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sirmikey1
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oldguy,
It's NOT his debt (it's mom and sis).
Post Tue Mar 22, 2011 10:54 pm
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riffdex
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It is good that you are thinking about the consequences of this beforehand. Trust me, it is all too easy to get a large sum of money and e broke in a few years - this happened to a close friend of mine. The important thing to do is immediately pay off your bills, take a (preferably large) portion of the remainder and invest in a conservative portfolio of stocks (this would encompass mutual funds), and then spend money as if you did NOT just receive a large check. Just continue to be frugal, and let the financial markets multiply your invested money. Just make sure you are being thrifty, and do not use this as an excuse to not continue looking for work. The important thing is to take this opportunity to make sure you dont get in debt again. My mother, for example, has bad credit history and has credit cards with rates up to 29%. She has been in thousands of dollars of debt and we just recently decided it makes sense for her to take out a small loan from her 401k to pay off these credit cards, and then cut them up and she will not ever use them again. Obviously, 29% interest rates are far greater than any gains she might make from a conservative 401k portfolio. If you have CCs with high interest rates I suggest you pay them off and cut them up so you are not tempted to use them again. My mother struggled with the idea of cutting them up afterward. She asked me "What if there is an emergency?". The fact is, her interest rates are so high, she would be better off just not having the credit available in the case of an emergency, than to be able to rack up more debt at such high interest rates. I reminded her of the last time she paid off her credit cards a year ago (via a loan from a family member) and she vowed to never use the cards again unless an emergency came up. A year later, she has the cards maxed out with $10,000 owed and a significant portion of that is simply from interest. What you should take away from this is, IF you have trouble being responsible with credit card, you should take this opportunity to pay them off and CUT THEM UP so you do not get in a bad debt situation in the future, when you may not have the money to dig yourself out again. Please note that I am not trying to imply that you are bad with money, or that you would take advantage of this money situation and not work as hard to find a job! I do not know you so I cannot say that (: But if any of this applies to you, just take action and deal with it when you are financially able to! Unfortunately, too many people realize how bad their financial habits are only AFTER they are completely in debt with no hope of getting out.
Post Wed May 11, 2011 5:43 am
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allaccessloans
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Commercial Real Estate Investments Are Profitable  Reply with quote  

If you are thinking about investing your money, you should try commercial real estate over buying homes and selling or renting them. Commercial real estate investing is less competitive but has a potential for higher return on your investment.
Post Sat Oct 08, 2011 10:09 pm
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globaldoc2001
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I totally agree with it. Commercial real estate would be so much better. If you would be investing in houses for rent, eventually, you would have to settle for the maintenance and the repair. And during the months that there are no offers yet, you would have to be the victim of depreciation and maintenance, both translating to headaches.

Business Tax Filing
Debt Consolidation Companies
Post Sun Oct 09, 2011 4:48 pm
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Angelinavers
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Edu  Reply with quote  

Awesome

Last edited by Angelinavers on Tue May 08, 2018 6:55 am; edited 1 time in total
Post Tue May 08, 2018 6:53 am
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Angelinavers
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Post Tue May 08, 2018 6:53 am
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