re: What to do w/ $500,000

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I’d have to check, because I have a couple and my wife has a few, each, but around 5.5% - 6.25% I believe. I’m positive none are are more than 6.5. They just combine to $88,000.00. We previously paid off the highest interest student loans.

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Generally, it’s not a horrible idea to get rid of high interest student loan debt. In your case, you may be eligible for tax deduction on the interest and any interest on a money market is taxed in the current year…there’s not a huge spread between them.

The Dave Ramsey logic in this thread of “pay off the loan to free up additional cash flow” is an overly simplistic way to view the situation.

Unless you need the funds in the next year or two, I would invest in the market. You’ll still get some dividend yield if you are interested in that cash flow for immediate usage. Money market funds are fine for short term but you won’t be able to lock in these rates past a year.

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Seems like way too much money to risk when yields are frothy.

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What do you mean?

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Is a FA recommended for pretty much any time you receive a lump sum like this?

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No. No. No.

Good for you that you had someone like this in your life.

We don't know your age or risk tolerance, but you sound thoughtful and responsible with your spending habits.

Do you live in an area with reasonable economic growth? I do and am doing well in real estate. I built most of my wealth in the stock market. Once I had some money, I began investing in real estate. First with some rentals, but now thru new construction and occasional commercial. Having a decent amount of liquid assets made this a good option. Where you live affects margins, though.

Rental properties can have 2 approaches. Keep investment at a minimum and go for good cash flow with longer mortgage. Or invest more into them, and focus on total cost over long term with short mortgages and weak cash flow until they are paid off.

New construction can be very profitable. Residential is generally less risky than commercial. Buy a lot, hire a builder, agree on house design with your builder, get a construction loan, build a spec house, and sell it. With a decent amount of liquid assets, banks will love you and loan enough money to build the house. Your out of pocket is pretty low when the house sells in a reasonable amount of time. Talking with a couple of builders and realtors in your area could let you know what margins to expect. This really works in a strong economic area because companies are hiring and people with good jobs buy houses.

I just wrote a novel knowing you might not read it. And real estate is not for everyone. So here are more comments...that you might not read.

I tried to think of my money in 3 buckets over the years. Keep some in each bucket.

Short term money. Emergency fund and money I might need in the next year. Money market, CD, Bonds.

Medium term. 1-5 years. Stock market with a mix of individual stocks that I buy/sell depending on results and new opportunities. Keeps me paying attention to the market. Also, some indexes like VOO. Real estate spec houses.

Long term. 5+ years. Stock market indexes and mutual funds. Seldom change these. They increase nicely over time. Also, my consistent individual stock winners (AAPL, HD, BRK types). Rental properties if that works for you.

I have no valuable input except Congrats!!!

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The Rock says...... take all the money, turn it sideways..... AND

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shove it up your candy arse?

Pay off the student loans today.

Invest the rest in the stock market

Take the $890 student loan payment every month and put it in a savings acct and in 3 years use that money to buy a vehicle

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For the other stuff, definitely don't pay down house.

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Can you explain why?

Great explanation, thank you!