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If the average middle-class American
Posted on 9/14/18 at 2:18 pm
Posted on 9/14/18 at 2:18 pm
Were given $1 million. What should their next move be?
I would assume 90% of the middle class would have no clue what to do with that kind of money.
I would assume 90% of the middle class would have no clue what to do with that kind of money.
Posted on 9/14/18 at 2:30 pm to LSUengineer12
Pay off house, savings account and vacations.
Clarification: This is what the majority would do, not me.
Clarification: This is what the majority would do, not me.
This post was edited on 9/14/18 at 4:23 pm
Posted on 9/14/18 at 2:33 pm to LSUengineer12
having very little knowledge on this type of subject, my early 30s-middle class answer would be:
-pay off mortgage (only debt)
-buy a few rental properties with the idea of having some kind of passive income during retirement
-put as much as possible left into retirement/investment type vehicles
-stay at my job maybe 7-10 more years, while massively upping my work retirement contributions
-retire around 40 if feasible
-pay off mortgage (only debt)
-buy a few rental properties with the idea of having some kind of passive income during retirement
-put as much as possible left into retirement/investment type vehicles
-stay at my job maybe 7-10 more years, while massively upping my work retirement contributions
-retire around 40 if feasible
This post was edited on 9/14/18 at 2:34 pm
Posted on 9/14/18 at 2:36 pm to LSUengineer12
IB4 hookers and cocaine
Seriously - most would waste it within 18 months
Seriously - most would waste it within 18 months
Posted on 9/14/18 at 2:54 pm to LSUengineer12
I’m guessing the average American would:
1. Pay off credit card debt. Maybe do that for their brother or mom or someone too
2. Buy a new car for them/their spouse
3. Sell house and buy a bigger one
4. But some nice toys and start spending more in general
1. Pay off credit card debt. Maybe do that for their brother or mom or someone too
2. Buy a new car for them/their spouse
3. Sell house and buy a bigger one
4. But some nice toys and start spending more in general
Posted on 9/14/18 at 2:55 pm to LSUengineer12
Pay off all bills. Then what's left, I would put 50% in savings, invest 40%, 10% would be for fun. Would continue to work
Posted on 9/14/18 at 2:58 pm to LSUengineer12
If younger than 45, VTSAX and keep working.
Posted on 9/14/18 at 3:36 pm to LSUengineer12
pay off all debt...get a rough idea of the cost of things you want/need to do now....contact referred tax attorney and financial adviser, to set up kids/grandkids etc with whatever is left over, after I and Mom croak, with minimal tax exposure....and did I mention hookers and blow
This post was edited on 9/14/18 at 3:38 pm
Posted on 9/14/18 at 4:21 pm to LSUengineer12
Isn’t there a show about people who win the lottery and lose it all in a few years? Lottery Nightmares or something.
Posted on 9/14/18 at 4:51 pm to LSUengineer12
What should their move be?
Retire all debt
Sock away a year's worth of expenses in a rainy day fund.
Spent $10,000-$15,000 on a nice vacation.
Buy two new, sensible cars
Invest the rest in an index fund.
Most people would blow it though.
Retire all debt
Sock away a year's worth of expenses in a rainy day fund.
Spent $10,000-$15,000 on a nice vacation.
Buy two new, sensible cars
Invest the rest in an index fund.
Most people would blow it though.
Posted on 9/14/18 at 11:48 pm to LSUengineer12
What should their next move be is tough, but I'd say don't blow it all so you can have something to show for it decades from now.
What's interesting to me is if this hypothetical happened to a 30something, they could blow 75% of it and continue working as normal and be set for life having that 250k do its thing. The sad thing is most folks would still frick it up and be back at square one within a couple years.
What's interesting to me is if this hypothetical happened to a 30something, they could blow 75% of it and continue working as normal and be set for life having that 250k do its thing. The sad thing is most folks would still frick it up and be back at square one within a couple years.
Posted on 9/15/18 at 7:41 am to LSUengineer12
quote:
I would assume 90% of the middle class would have no clue what to do with that kind of money.
More or less. Some of them might manage to hang on to it but most would be exactly where they were to begin with in 4-5 years if not less. I've seen it happen twice.
Once with a $5 million insurance windfall and the second with a $10 million legal settlement. The first guy blew through his money in a little over three years, the second finally came to her senses when her account balance went below seven digits but it was a bit late by then. She was disabled and couldn't work so she went back on disability and used what was left as a supplement.
Posted on 9/15/18 at 8:32 am to LSUengineer12
pay cash for as many income properties as possible. Use passive income for more rental properties.
Posted on 9/15/18 at 8:50 am to LSUengineer12
Personally, as a single guy in my mid 20's: I'd pay off anything on my home and then invest in property around the Knoxville area and then some into some ETFs. Snowball it from there. And then obviously take out like 5-10K for a fun vacation.
This post was edited on 9/15/18 at 8:54 am
Posted on 9/15/18 at 10:51 am to LSUengineer12
1) pay off house, rent it out to three individuals and make $1,650 per month on that. Move into a decent apartment until I figure things out.
2) buy Subaru.
3) Put about 300k straight into a mega cap dividend etf or fund that pays a 3% dividend.
That's $9,000 in income per year aside from regular stock appreciation.
4) I'd do a lot of reading/refreshing on real estate investing, create an llc and buy a property or two to start off.
5) Buy a modest vacation home in the Appalachians for my family/friends enjoyment only.
6) keep about 100k in an online saving that yields north of 1 percent. This is for repairs and emergencies.
7) Continue teaching and enjoy the double salary from investment properties.
8) max out HSA and Roth
2) buy Subaru.
3) Put about 300k straight into a mega cap dividend etf or fund that pays a 3% dividend.
That's $9,000 in income per year aside from regular stock appreciation.
4) I'd do a lot of reading/refreshing on real estate investing, create an llc and buy a property or two to start off.
5) Buy a modest vacation home in the Appalachians for my family/friends enjoyment only.
6) keep about 100k in an online saving that yields north of 1 percent. This is for repairs and emergencies.
7) Continue teaching and enjoy the double salary from investment properties.
8) max out HSA and Roth
This post was edited on 9/15/18 at 10:53 am
Posted on 9/15/18 at 12:03 pm to LSUengineer12
quote:
Were given $1 million. What should their next move be?
I would assume 90% of the middle class would have no clue what to do with that kind of money.
It's a more complicated question because we don't have an age to factor in. I don't know how old the average middle class American is... 35 or 40 maybe?
But in any case, I'd say that eliminating consumer (including student loans) and primary residence debt should be at the top of anyone's list. After that, the investing and spending sides would depend on age, family situation, current financial status and life goals.
Posted on 9/15/18 at 1:03 pm to LSUengineer12
Regardless of income level, first stop is the Porsche dealership. You only live once.
Posted on 9/16/18 at 10:36 am to LSUengineer12
What the average idiot should do?
Take every cent of it and put it in an 18 month CD. This will let the shock wear off, and it will be illuminating that, with practically zero risk, they now have about $30k more than they started with.
Now, pay off the credit cards. It sucked making all of those payments over the last 18 months, didn’t it? Maybe you won’t max them out again this time, which is what most people seem to do after paying them off (usually after selling a house).
From here, it branches a fair bit. Have you been grinding out work as an employee for a small business that you could conceivably run yourself but just didn’t have the start up capital? Take a shot and see if you can change your life. However, if doing so will use up more than 50% of what you have left, it’s probably not a good idea, because most people are going to frick this part up.
If you live in a 60’s ranch style death trap, consider a new home that isn’t much (if any) bigger, but is significantly newer so you can start seeing some relief on utility bills.
Take a nice, reasonable vacation somewhere you never thought you would be able to go (should be doable for less than $15k, full stop. Most likely less).
Now put the rest in a nice, low fee vanguard index fund and get your arse back to work.
Take every cent of it and put it in an 18 month CD. This will let the shock wear off, and it will be illuminating that, with practically zero risk, they now have about $30k more than they started with.
Now, pay off the credit cards. It sucked making all of those payments over the last 18 months, didn’t it? Maybe you won’t max them out again this time, which is what most people seem to do after paying them off (usually after selling a house).
From here, it branches a fair bit. Have you been grinding out work as an employee for a small business that you could conceivably run yourself but just didn’t have the start up capital? Take a shot and see if you can change your life. However, if doing so will use up more than 50% of what you have left, it’s probably not a good idea, because most people are going to frick this part up.
If you live in a 60’s ranch style death trap, consider a new home that isn’t much (if any) bigger, but is significantly newer so you can start seeing some relief on utility bills.
Take a nice, reasonable vacation somewhere you never thought you would be able to go (should be doable for less than $15k, full stop. Most likely less).
Now put the rest in a nice, low fee vanguard index fund and get your arse back to work.
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