OT: Pack Advice on Finance

[jack daniels dog]

If one was to be about to come into a pretty decent amount of money for a young guy, financially what would be some recommendations you financial guys would have that would be moderately aggressive yet not so dangerous as to lose it? That may be an impossibility but just curious of any advice y’all could give as this may happen in a few months and don’t want to stick it in a CD and waste it’s potential for growth

 

[Captain Ron]

What sort of time frame are you looking at before you might need the funds?

 

[UpTheMiddlex3Punt]

I'm not a financial guy, but I'd try to figure out how to get most if not all into tax deferred or Roth accounts, even if it took several years to do so.

 

[jack daniels dog]

I would hope I would not need it for in the neighborhood of twenty to thirty years possibly, but honestly don’t know.

 

[FQDawg]

Certainly don’t put it all in one place. And if you really don’t need it for 20-30 years, I’d put some of it in something boring like treasuries so that if things really go south, you still have some money in a safe investment.

 

[greenbean.sixpack]

I'd invest a decent amount in cocaine and hookers.

 

[RutherfordBHayes]

Emu farms

 

[jack daniels dog]

Emu farms

Damn you sir. Watched my father lose it all in those rotten buzzards. Never again...

 

[johnson86-1]

If one was to be about to come into a pretty decent amount of money for a young guy, financially what would be some recommendations you financial guys would have that would be moderately aggressive yet not so dangerous as to lose it? That may be an impossibility but just curious of any advice y’all could give as this may happen in a few months and don’t want to stick it in a CD and waste it’s potential for growth

Depends on what a decent amount of money is, but the generic answer is just put it in VTSAX or VFINX or whatever.

If it's enough to make you an accredited investor, that might open up some more interesting options.

 

[karlchilders.sixpack]

Got to watch out for those Coming Two's.

 

[TaleofTwoDogs]

Assuming this is a cash deal (no IRAs, ROTHs, etc) and you will satisfy any inheritance tax, then I would park the funds in a combination of ROTH (mutual funds, EFTs etc), money instruments (bonds) and cash CDs. Because you have 20 - 30 years to park the funds, I think a 70/20/10 mix would probably work. Contact a budget trade house (ie.,TD AmeriTrade) for best ways to invest but if you let them manage your fees will be higher. I prefer a self-directed account. Good luck.

 

[patdog]

I'm not a financial guy, but I'd try to figure out how to get most if not all into tax deferred or Roth accounts, even if it took several years to do so.

This is the right answer. Put it in a vanguard target retirement fund & move the max into a vanguard Roth IRA each year. If you want to do some more active investing, set aside maybe 1/3 for that, but you’re going to have to do damn good with it to beat the vanguard target date fund over the long term.

 

[Leghumper.sixpack]

Last place on Earth to get or give financial advice is on a sports message board. Now that we’ve cleared that up, here goes. Set up a brokerage account with tax defered instruments Roth etc. with discount broker max out, as mentioned above, this may take several years. Learn all you can about Writting (selling) Covered Calls and Puts on US Equity Indexes. Avoid naked Calls and Puts, Do Not Ever trade on margin. Set back and make 15% to 45% on your money annually tax deferred. This is what banks and insurance companies do. Sell options to options buyers, gamblers, like a Casino you are the House not the speculator. These suckers buying, hold their positions because of the human impulse of greed for profit and fear of loss. This is why 90% of their positions expire worthless. You win 90% of the time as the Seller of Options. Hoestly, I’d say more like 80%. Don’t get greedy and do your 17 homework. Start out small. Make your mistakes with a small number of contracts. You will make mistakes learning! Like placing market orders rather than limit orders. Selling a call when you were wanting to sell a put. Using Stop orders, kiss of death. Keep your stop orders in your head, post them and your own discount broker will buy them at your expensive. Never, never sell at bid price. Find a mentor without a dog in the hunt.

 

[tatedog]

Put 90% into a Vanguard Index Fund and forget about it for the next 20-30 years. Play with the other 10%. After that 30 years you'll be better off than 99% of investors or non-investors.

eta: damn pat beat me to it...target date funds are a little conservative for my taste even over this time frame, but they do have plenty of proponents.

2nd eta: for the low low price of $499 a month I'll meet you at the Goldstrike with one college football lock each Saturday.

 

[Lawdawg.sixpack]

Let me tell you about the timber market...

 

[tatedog]

A lot of timber just came back into inventory. Should be a great buyer's market.

 

[SixtInning]

I would add considering a Health Savings Account through a bank to tbe mix. They are a bit hard to find, but Renasant in MS and surrounding states offers this type of account. You can put a set amount in each year - maybe 3500 for single and 7000 for family - not sure of exact amount. Deposits are tax advantaged for the year in which they are made, and withdrawals are too as long as its health related. They aren't like and FSA, where the money goes away at the end of the year. Interest grows tax free as well, but that's likely pennies compared to the tax shield coming and going. We've used it to dump a bunch of money into when kids are born and its been a big swing at tax time. Or it's there for health related emegencies.

Not the end-all be-all in your situation, but a good piece of the overall puzzle.

 

[Dawg1976]

These kind of questions are asked all the time on the bogleheads forum. See link....

https://www.bogleheads.org/forum/index.php

 

[fishwater99]

Buy all the real estate you can in Jackson. Just ask Catvet.

 

[thatsbaseball]

Plastics......

 

[Apoplectic_Objurgator]

Put 90% into a Vanguard Index Fund and forget about it for the next 20-30 years. Play with the other 10%. After that 30 years you'll be better off than 99% of investors or non-investors.

eta: damn pat beat me to it...target date funds are a little conservative for my taste even over this time frame, but they do have plenty of proponents.

2nd eta: for the low low price of $499 a month I'll meet you at the Goldstrike with one college football lock each Saturday.

this is the answer

 

[mcdawg22]

Um sports books just became legal in Mississippi, duh!

 

[patdog]

One more suggestion, pay off your credit card debt, and start using credit cards for convenience and cash back or rewards, not to borrow money.

 

[Jeffreauxdawg]

If one was to be about to come into a pretty decent amount of money for a young guy, financially what would be some recommendations you financial guys would have that would be moderately aggressive yet not so dangerous as to lose it? That may be an impossibility but just curious of any advice y’all could give as this may happen in a few months and don’t want to stick it in a CD and waste it’s potential for growth

I recently went through this exercise. I will tell you what I just did... Make your own decisions.

Background..We sold our house recently and ended up with a nice chunk of extra cash after buying a new place. I am 20-25 years from retirement. Great start on 401k and currently contributing maximum annual limit through work. I have a couple of young kids and a money market with 6-8 months of cash for emergencies. No longer have a high deductible health plan so I cannot contribute to an HSA. I have a mortgage (4% interest), 2 car notes ( sub 2% interest), and no other debt. My wife hit the jackpot with stock options at a tech company that went public a couple of years ago and we are trying to sneak the options out as best we can without getting taxed to Hell and back. This money will need a home just the same as the cash from selling the house.

So here's my rationale. Your entire life is your portfolio. My emergency fund is my cash position. My (and my wife's) ability to work and earn money is my bond. What I mean by this is that I will always have money coming in so long as I am able and willing to work... Not quite 40, so I feel good about the next 15 or so years. Things that can affect that are usually insurable unlike most actual bonds. I also have a lot of exposure to small cap and tech with my wife's options. Retirement is good. I have no college savings for the kids and want to build wealth for whatever else... Go to Australia, buy a Burger King franchise down the road, real estate.. whatever comes up.

I thought about the 529's, but the plans are limited and expensive in fees compared to index funds or ETFs. I also don't know that my kids will want, need, or deserve money for college. If they turn out like me the only way to get them serious about it is to make them pay their own way. In this case I would have to pay a 10% penalty plus ordinary tax on 529 money used for other purposes.... All the while I have access to very limited funds at high fees through the plan and thus have a smaller nut when my kids do get college age. Capital gains tax is only 15% and I challenge anyone to do a little math on what the extra fees of a 529 fund due to your compounding total after 10-15 years. Also, a 529 is pretty much something that has to be drawn out in a short window (6-7 years in my case) to avoid penalties and this creates a liquidity risk that would force me to leave most if not all of the equities in the 529 a few years before needing the money. That risk would not be the same in a brokerage account so my earnings will be greater.

Finally the Roth IRA. I am not opposed to it, but I am not going to worry about it either. As messed up as our country gets, I just can't imagine ever taxing retired people at a higher rate than working/younger folks. Now my tax bracket could theoretically go up in retirement if I actually earn more from retirement funds than work, but I don't plan on it.
I prefer to put all the money I can into a deffered tax plan to maximize earnings and growth. Yes, when I take it out I will have to pay taxes, but I should have so much more than in a Roth it will still be a win. At a 20% tax rate, I can contribute $6250 into a 401k every year that would equal the $5000 I can put in a Roth. In 25 years at an 8% annual return the 1st year 401k is worth $42,803. The Roth $5k is worth $34,242. I would owe tax on the interest of the 401k and will have a net of $35,492 assuming the same 20% rate in the 401k. Not a big difference either way, but the effort to create a back door Roth isn't worth it in my mind when I have a perfectly good 401k.

So after weighing all of the options I just dumped it into a Vanguard Brokerage account. I split it 1/3rd Total Market Index, Large Caps, and Mid Caps.... As I mentioned earlier, I am heavy on small caps due to the options so this little mix is my way if balancing that risk a bit. I can get the money anytime I want without penalty and only pay tax on the earnings if I do. I can earn as much in this account as a Roth or 401k but it counts as a liquid cash asset if I want to get a loan to buy a Burger King franchise.I can use it for health emergencies, vacations, or the kids college any time I wish. I am not concerned about a 60-30-10 equities, bonds, cash ratio since my money market has plenty of cash and my job produces plenty of income. I am not at liquidity risk anytime soon. I am in growth mode. Building wealth slowly, but surely as best I can.

 

[pDigital32Dawg]

Set aside 3 to 6 months emergency fund
Pay off any credit card debts
contribute enough to 401k to receive company match (if an option)
max at Roth ira
max out HSA
max out 401k

Go the route of an online savings account for best interest rates. And as another poster mentioned, invest heavily into hookers and blow

 

[UpTheMiddlex3Punt]

View attachment 10686

 

[katfsh]

Buy something they are not making more of........ LAND.

 

[CoastDawg18]

Buy and hold real estate. Period.

 

[gdogg]

Listen to me know and Hear me Later. Get a professional money manager. Period.
I am with Mark Green @ Morgan Stanley, Jackson, MS. Huge Bulldog, Excellent Advisor.

 

[greenbean.sixpack]

Listen to me know and Hear me Later. Get a professional money manager. Period.
I am with Mark Green @ Morgan Stanley, Jackson, MS. Huge Bulldog, Excellent Advisor.

Don't pay big fees. Just put in a low-cost index fund(s) and let it ride!