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2 million trust fund

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ofsound
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2 million trust fund  Reply with quote  

Hi I have been left a $2milloin trust fund and basically what i want to know is how much income could this generate monthly/yearly. I dont think i will be allocated this full amout by the trustee, however i woudl like to know what the maxium monthly or yeraly income could be . thanks in advance
Post Thu Dec 08, 2005 2:49 pm
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auggyf
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This depends how risky of investments you want to make: will you be relying on this income to live? Would you rather have capital appreciation of the assets rather than taking out income periodically?

For a practically riskless investment, if you put this in a money market fund you could earn 4% currently [this number has slowly been increasing over the past 2 years]. This turns into 80K of taxable income. Don't forget that this is pre-tax and pre-inflation -- 30 years from now, that $2 million will still be at $2 million in today's dollars, which won't be that much. Most experts predict an average of 1-3% expected inflation over time ... as long as things go well. So you usually can do better than this by taking on some risk, but understand that this is the base level right now. Interest rates (and therefore this 4% yield) can fluctuate over time ... historically 4% is considered somewhat low, though it may stay like this for a long time.

For this kind of money, you are probably well-off going to see a professional. You may want to get a higher earning than a riskless investment, which means accessing your risk level and you'll need to diversify across various kinds of instruments. There also may be tax implications you may need to consider.

Don't forget to get independent financial advice, and understand any conflicts of interest. If you are a do-it-yourself-er, I encourage you to check out Vanguard's pre-baked income funds: Wellesley Income Fund Inv, LifeStrategy Income Fund, Target Retirement Income along with other funds they have if you decide generating income is not your first priority.
Post Thu Dec 08, 2005 3:31 pm
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ofsound
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Hi thanks so much for your reply. I guess I would defo look at a higher risk option. I would like to use some of the money ,say 80%, to live off and leave the other % to be added to the principal. The trust has been created using Morgan stanley so I am sure, when i meet with them, they will be able to advise me. The trust was formed in the US but i am from the uk so i am not sure how tax issues will be worked out.. thanks again
Post Thu Dec 08, 2005 3:59 pm
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CustomMade
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The first thing you should really take into consideration is how much you want to end up with. You should take into consideration your spending habbits and try to think how they are going to change after your receive the money. Using a portion of the money and going into business probly would not be a bad idea either.
Post Thu Dec 08, 2005 9:14 pm
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ofsound
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Hi thnaks for the reply. I agree about the biz thing, i was thinking of buying a buy to let which i would not use just rent out.
Post Thu Dec 08, 2005 11:04 pm
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Kaabi
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Two million dollars is a lot of money, I don't see why you would want more. If you had a small job working as an assistant in a hardware store, you could still live on that. I don't suggest investing it, you could lose a lot of money. Just work 3 times a week, and use all the money you get from that job to buy entertainment stuff, and keep the two million strictly to live off of. If you do that, you won't have to risk any of the money and you can still live a luxurious lifestyle.
Post Fri Dec 09, 2005 5:55 pm
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ofsound
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I agree it is alot of money, however, i am sure there are ways in which to get a much larger income even if there is alot of risk involved. any other suggestions i want to be armed with ideas when i meet with the the trustess next year
Post Sat Dec 10, 2005 1:15 am
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utrnewsletter
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2million is alot ..... only invest about 1/4 of it to be safe
Post Tue Dec 13, 2005 9:59 pm
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