Wayward Son
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 25 Nov 2004
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| Where to put $23,000? |
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I would love to hear some suggestions on what to do with $23,000 in the following scenario...
At the beginning of January my wife will be receiving $23K from selling her interest in a business. She will also be receiving approx. $2K/month for 36 months starting in February.
In January, we will also have the following:
1. $37,500 balance on a HELOC at 5.0% (total HELOC of $42,500)
2. $13,000 balance on a credit card with a 0% APR through July 2005
Taking into account my income, there is a good chance of being able to payoff the $13K on the credit card before the 0% offer runs out in July.
We both have ROTH IRAs, but have not contributed the full amount this year. Also, we have no "emergency" fund to speak of.
Should we...
a. Pay down the HELOC? (Leaving a balance of approx. $14,000)
b. Invest the $23K in a "conservative", easily accessible investment that would have a reasonably good chance of outperforming the interest being paid on the HELOC (real interest rate less than 5% because of interest deduction).
c. go to Atlantic City, play roulette, and put $20K on "red" (just kiddin')
d. ...(your suggestion)
As an aside, I am also interested in getting started investing in stocks and learning more about the stock market, so thought that perhaps I could take $500-$1,000 and put it aside in order to invest via a DRIP...just something small to get started and to start learning.
Any suggestions on what to do with the $23,000 and the extra $2,000/mo?
Thanks...and Happy Thanksgiving!
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Thu Nov 25, 2004 12:38 pm |
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BlankenshipFP
Money Talk Advisor
Cash: $ 79.56
Posts: 390
Joined: 05 Oct 2004
Location: Illinois
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These are the kinds of problems that we love to have!
Do you have a plan for the money - that is, what you'd like to accomplish with it? Is it intended for some specific goal, such as college education for the kids, or retirement, or home improvement? Knowing this will help with suggestions.
If you don't have anything specific in mind, it probably wouldn't hurt to pay down the HELOC somewhat, but I imagine that you can probably make a better return than 5% if you were to put this money into stock mutual funds.
I would definitely learn all that you can about investing in mutual funds - and begin a program of dollar-cost-averaging into funds with the 2k per month. I think you'll be quite pleased with the results of such a program.
Hope this helps -
Jim Blankenship, CFP�, EA
Blankenship Financial Planning, Ltd.
www.BlankenshipFinancial.com
Standard IRS Circular 230 Notice Applies
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Fri Nov 26, 2004 8:54 pm |
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nkd
New Member
Cash: $ 0.47
Posts: 3
Joined: 07 Dec 2004
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wow, I would love to have that amount of money. if you invest that amount where I am investing now in a year you would have $299,000 aprox.
you should look for a high yield non risk investing for your money.
well thats my opinion. good luck!
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Tue Dec 07, 2004 6:23 am |
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xboxundone
Senior Member
Cash: $ 67.83
Posts: 795
Joined: 19 Sep 2004
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quote:
Originally posted by nkd
wow, I would love to have that amount of money. if you invest that amount where I am investing now in a year you would have $299,000 aprox.
you should look for a high yield non risk investing for your money.
well thats my opinion. good luck!
NO such thing as HIGH Yield NO RISK !!!!
Congrats on your oooportunity. I would definitely say if you dont ahve an emergency fund you need to start one you should always have atleast a couple of thousand on hand for emergencies, the rule of thumb is 6 months to cover all your bills/ mortgage etc... sompeople have a years worth of emergency but i feel 6 months is enough. If you answer the questiosn asked in the post by BFP we can give you better advice.
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Tue Dec 07, 2004 12:18 pm |
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salem62
Member
Cash: $ 2.80
Posts: 14
Joined: 23 Dec 2004
Location: Detroit, MI
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All of the prior suggestions make sound sense...
But I was wondering why the business was sold. If it was succesful and this money is the result of a successful business person's hard work, why not go into another business venture? You have a tidy sum for a downpayment and a three year stream of income to help build a new business.
If the business sale is the result of getting a few bucks out of a sinking ship, then I think reducing your debt, etc. is the best route.
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Tue Dec 28, 2004 6:07 pm |
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