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Started By
Message
Inheritance forthcoming for a person with nothing
Posted on 12/15/17 at 8:56 am
Posted on 12/15/17 at 8:56 am
Guy I know has an inheritance coming from his great grandfather. Guy is working poor, has zero money skills, and has almost literally nothing. Bright side is he also has no debt. Will need to purchase a vehicle with some of the money.
Lets assume he nets $300,000. How do you advise him so that in 2 years he isn't totally broke again?
Lets assume he nets $300,000. How do you advise him so that in 2 years he isn't totally broke again?
This post was edited on 12/15/17 at 9:28 am
17
Posted on 12/15/17 at 9:04 am to AUjim
Don't go buy a $75,000 truck right off the bat for one thing
Posted on 12/15/17 at 9:13 am to AUjim
quote:
Guy is working poor, and has zero money skills, but has almost literally nothing.
Why the but? I was not surprised by the ending.
Posted on 12/15/17 at 9:17 am to AUjim
buy a a reliable used car. something that holds value, gets good gas mileage, etc.
secondly go buy some personal finance and investment books. read the he'll out of them.
secondly go buy some personal finance and investment books. read the he'll out of them.
Posted on 12/15/17 at 9:26 am to Twenty 49
quote:
Why the but
Because I changed the wording a bit while writing it and missed that. Thanks for noticing, and thanks for the good advice.
Posted on 12/15/17 at 9:34 am to AUjim
If he has nothing convince him to buy a home. That's one investment that you can't just sell and get cash whenever you are running short. Depending on financing he may be able to lower his housing bills.
Posted on 12/15/17 at 9:44 am to AUjim
It is going to be extremely hard to convince a person that has had nothing to manage this windfall of money properly. Impulses will take over instantly. He has to just let someone he trusts to managed for him. What he should do invest some money into himself to get a skill. He should enroll in a juco to take some welding classes or something. Long term, that investment will payoff more.
Posted on 12/15/17 at 10:22 am to MontyFranklyn
Hell yes. This is along the lines of what I'm thinking....love to hear somebody else say it.
300,000 obviously isn't enough to just coast....but it is potentially life changing if used correctly.
Thank you!
300,000 obviously isn't enough to just coast....but it is potentially life changing if used correctly.
Thank you!
This post was edited on 12/15/17 at 10:23 am
Posted on 12/15/17 at 10:39 am to AUjim
I know absolutely nothing about annuities and even less about trust funds or any other type of investment that could protect principle and maybe pay out a supplemental income monthly/quarterly/yearly/???
Posted on 12/15/17 at 10:52 am to AUjim
So working poor...I'm assuming it's close to minimum wage. If he already has a car then I'd consider putting some down on a mobile home or a really simple house. It's really hard to get $300000 to produce much of an income. Let's say you put $50,000 down on a simple 100k home. Leaves $250k. Find an investment vehicle that pays 4% or more a year. He brings home 10k a year added to what he already makes. For working poor that might change his living situation dramatically. At least would buy him a house and pay his note. I would try and do something like this. Maybe even pay cash for a used mobile home in a park (<20k) and pay lot rent only.
Posted on 12/15/17 at 10:55 am to AUjim
Buy bitcoin obviously preferably on 100% margin. 600K in BTC is the right way to start the life of a billionaire.
This post was edited on 12/15/17 at 10:56 am
Posted on 12/15/17 at 11:07 am to AUjim
The $300,000 is not going to carry the guy his entire life, does the guy have any education or marketable skills? If not, and he is mentally capable of pursuing a education? If he is, get a reliable car, use the rest to get a education in something that can provide a income for the rest of his life.
Posted on 12/15/17 at 11:10 am to AUjim
quote:
Lets assume he nets $300,000. How do you advise him so that in 2 years he isn't totally broke again?
Set it up for permanent income. Tell him he can have $1k a month - forever, if done correctly, and pass it to his heirs.
quote:
Will need to purchase a vehicle with some of the money.
Find the best $1k vehicle available and pay cash with the first month's money. Then tell him to save half the $1k a month in a year he can buy a $6k to $7k (with the trade) vehicle, and still be $500 a month to the good.
Spending the money will only fill up his life with shite - "income" is far more important than stuff.
Posted on 12/15/17 at 11:29 am to AUjim
He could literally buy a vehicle and a trailer cash for $50k total. Invest the remaining $250k, and have $2k a month to spend for life. He could live off of that fairly easily.
Honestly, I'd tell him that if he invests X amount he can then get Y amount a month to spend for life and it will never run out.
Guy likely buys a $200k house, $50k truck, and burns the rest within a year. I'd do everything possible to help him buy very small assets with cash that he can actually afford to keep.
Honestly, I'd tell him that if he invests X amount he can then get Y amount a month to spend for life and it will never run out.
Guy likely buys a $200k house, $50k truck, and burns the rest within a year. I'd do everything possible to help him buy very small assets with cash that he can actually afford to keep.
Posted on 12/15/17 at 12:23 pm to AUjim
This is cash, property, stocks?
Posted on 12/15/17 at 12:34 pm to leoj
Cash
Posted on 12/15/17 at 1:00 pm to AUjim
quote:
annuities
Don't do this.
Posted on 12/15/17 at 1:34 pm to Janky
Never buy a brand new car unless you are loaded!
Posted on 12/15/17 at 2:03 pm to baldona
quote:I would say buy the vehicle cash and payoff his rent for a year instead. I'm against buying an additional depreciating asset like a trailer because he can just buy a small home/condo instead for more money of course, but it will appreciate in value.
He could literally buy a vehicle and a trailer cash for $50k total. Invest the remaining $250k, and have $2k a month to spend for life. He could live off of that fairly easily.
Posted on 12/15/17 at 2:37 pm to baldona
quote:
Invest the remaining $250k, and have $2k a month to spend for life. He could live off of that fairly easily.
Where would he park the 250K to generate $2,000 a month? That's $24,000 a year, so almost a 10% annual return.
It might average that sort of return over the long term in a stock mutual fund, with ups and downs along the way, but most savings vehicles that generate a steady income stream like he would need to cover living expenses don't pay that well.
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