Author Topic: Wise Choices for Inheritance  (Read 5436 times)

miamiblue

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Wise Choices for Inheritance
« on: July 02, 2015, 08:19:21 AM »
My father-in-law passed away unexpectedly late last year. He owned a business and was preparing to retire in a few years, so my husband inherited a sizeable amount from his retirement investments and liquidating the business. We also inherited his paid-off house, which we sold because it was in another state, a piece of land (not sold yet), and a significant amount of gold.

My husband will have to start taking RMDs at the end of this year. Does anyone have any suggestions for what we should do with these? Put them in a Roth account?

We are now trying to figure out what to do with the the proceeds from the house and some of the other cash we ended up with that isnít already invested, about $500k (not counting the gold; not really sure what to do with it). Weíre thinking of paying off our house ($185k left on mortgage at 3.75%) and investing the rest. We both would love to be able to RE in five years or less, which I think would be a possibility if we make a wise decision now. I was thinking some mix of Vanguard mutual funds and bonds, but Iíve never dealt with this much money before!

My husband has grown fearful of investing in the market with the instability in Greece and other areas, thinking that a correction is just around the corner. He doesnít want to dump such a large sum into the market now and have things bottom out in a few months. Instead, he is talking about investing some of the money in a company that has developed a new product and just keeping the rest in savings for a while. It seems like the business has potential, but Iím terrified of this kind of investment. I donít feel that we are at a wealth level yet to take this kind of risk. What would you do in this situation?

A little background to shed some light on things. My husbandís mother also passed away a few months ago (no inheritance). His parents were only 16-17 years older than he is, so my husband is now feeling his own mortality (his father was only 62, mom 61). He doesnít want to end up not being able to enjoy his life while he can. He grew up poor with no money management role models (in fact, quite the opposite), and he did not meet his father (who ended up being successful) until he was an adult. Money has always been a source of stress in his life. His upbringing led him to seek out more ďfast moneyĒ earning opportunities than being frugal and saving, but he knows how to live off of nearly nothing (because he had to). Heís come a long way since Iíve known him, and now sees value in saving (though not at a mustachian level yet).

Does anyone have any ideas on how we should handle this windfall amount? We really want to honor my father-in-law knowing what a tragedy it was that he didnít get to enjoy the fruits of his labor.

Thanks.

MissStache

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Re: Wise Choices for Inheritance
« Reply #1 on: July 02, 2015, 08:24:05 AM »
What does the rest of your financial picture look like?  What about your other investment/retirement accounts?  How critical is this money to your future FIRE plans?

humbleMouse

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Re: Wise Choices for Inheritance
« Reply #2 on: July 02, 2015, 08:44:15 AM »
Greece should be the last of your husbands worries about the market.  That is literally an drop in the huge bucket.  I feel your husband on worrying about markets going down in the next few years, but markets always sway.  If you are invested long term, it doesn't matter. 

I would pay the mortgage, invest half of the remaining money in vanguards/lower risk investments, and leverage the rest of the money to buy multi-family rentals. 

As far as investing in product development, I think that is a terrible idea.  That is the most textbook way to loose a big chunk of money. Investing in a company that is "developing a new product" is a terrible, terrible idea.   You already have a clear path to victory, why tie up cash in a risky new product?

miamiblue

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Re: Wise Choices for Inheritance
« Reply #3 on: July 02, 2015, 09:17:02 AM »
Thanks for the feedback so far!

This $500k is a pretty good chunk compared to the rest of the financial picture, and without it we would probably not be able to FIRE as soon as we'd like.

~$300k in other inherited IRAs and estate accounts
~$200k in our 401(k)/TSP/403(b) accounts
~$35k in savings

We have no other debts except the mortgage.

I agree that the Greece/Eurozone thing is just a blip, and have really tried to impress the long-term strategy on him, but he had a very bad investing experience before I met him with a small inheritance form his grandfather (managed by his father) that I think has made him really skittish. And he does sort of have a point if you consider dollar-cost averaging (dumping $500k in when the market may be unusually high isn't ideal).

I also agree that the business investment is a horrible idea, and I am trying to talk him out of it. He has always had a dream of starting a business or being a part of a new business, so this is not going to be an easy task. I'm trying to think of other things that he can appease this dream without as much risk.

Capsu78

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Re: Wise Choices for Inheritance
« Reply #4 on: July 02, 2015, 09:18:16 AM »
Greece should be the last of your husbands worries about the market.  That is literally an drop in the huge bucket.  I feel your husband on worrying about markets going down in the next few years, but markets always sway.  If you are invested long term, it doesn't matter. 

I would pay the mortgage, invest half of the remaining money in vanguards/lower risk investments, and leverage the rest of the money to buy multi-family rentals. 

As far as investing in product development, I think that is a terrible idea.  That is the most textbook way to loose a big chunk of money. Investing in a company that is "developing a new product" is a terrible, terrible idea.   You already have a clear path to victory, why tie up cash in a risky new product?

This---  Inheritance is a one time event or at least rare enough that you should treat it as "generational money".  Keep your powder dry, put the gold in the safe for a while, pay off your mortgage and restructure your own financial kingdom for the long haul.

Jack

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Re: Wise Choices for Inheritance
« Reply #5 on: July 02, 2015, 09:28:27 AM »
If your husband is that worried about it, dollar-cost average it into the market over a several-year period (or maybe a 10-year period, if he's really paranoid).

lostamonkey

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Re: Wise Choices for Inheritance
« Reply #6 on: July 02, 2015, 09:32:28 AM »
I don't think you and your husband have the right mindset to invest in the stock market. It is very likely that your husband will want to sell everything when there is the next downturn. There will be a downturn eventually whether it's next month, or 10 years from now. Also do not invest in that product development company. Investing in an individual stock is far more risky than investing in a broad index fund, and it's fairly likely that you will lose money.

I would sell the gold and the land, then decide what to invest in. You could invest in mutual funds but given your risk tolerance, I would recommend a large percentage to be bonds or fixed income. You could also consider buying a few investment properties.

johnny847

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Re: Wise Choices for Inheritance
« Reply #7 on: July 02, 2015, 09:33:11 AM »
If your husband is that worried about it, dollar-cost average it into the market over a several-year period (or maybe a 10-year period, if he's really paranoid).

It has been shown that even in down markets, DCAing over more than about a year is a losing proposition.

expectopatronum

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Re: Wise Choices for Inheritance
« Reply #8 on: July 02, 2015, 09:34:39 AM »
My husband has grown fearful of investing in the market with the instability in Greece and other areas, thinking that a correction is just around the corner. He doesnít want to dump such a large sum into the market now and have things bottom out in a few months. Instead, he is talking about investing some of the money in a company that has developed a new product and just keeping the rest in savings for a while. It seems like the business has potential, but Iím terrified of this kind of investment. I donít feel that we are at a wealth level yet to take this kind of risk. What would you do in this situation?

If you can help him see the logical error here, that will do wonders for your situation. Seeing the stock market as a less-sure/safe bet than a startup...

That's a tough situation growing up, but your husband wants to make these decisions emotionally, not logically. Dumping thousands into the market (which will go up over time - even if you had invested just before the crash in 2008, you'd be up by now) vs dumping thousands into a business (which is a huge risk - you're essentially investing in ONE company and gambling on its success) is a no-brainer. Can you help him understand he's willing to bet on the successes of just ONE business vs all the businesses? The way I see it, it's like....if I had to make a bet that paid 2:1 that the house would win (casino would be profitable for the night) or a bet that paid 20:1 that this guy I know who usually wins at poker night would go out on top, I'd still pick the casino and would continue to do so over the course of the year. It's not a perfect analogy, but that's my perspective. Also, a great product does not mean a successful company. There is so much that goes into the management of the company, the marketing, and more that I wouldn't feel confident "investing" in it.

Since he is skittish of the market (was his bad experience by chance based on picking stocks?), paying off the mortgage is a great idea. To me, that's the ultimate in conservative approaches.

humbleMouse

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Re: Wise Choices for Inheritance
« Reply #9 on: July 02, 2015, 10:22:24 AM »
My husband has grown fearful of investing in the market with the instability in Greece and other areas, thinking that a correction is just around the corner. He doesnít want to dump such a large sum into the market now and have things bottom out in a few months. Instead, he is talking about investing some of the money in a company that has developed a new product and just keeping the rest in savings for a while. It seems like the business has potential, but Iím terrified of this kind of investment. I donít feel that we are at a wealth level yet to take this kind of risk. What would you do in this situation?

If you can help him see the logical error here, that will do wonders for your situation. Seeing the stock market as a less-sure/safe bet than a startup...

That's a tough situation growing up, but your husband wants to make these decisions emotionally, not logically. Dumping thousands into the market (which will go up over time - even if you had invested just before the crash in 2008, you'd be up by now) vs dumping thousands into a business (which is a huge risk - you're essentially investing in ONE company and gambling on its success) is a no-brainer. Can you help him understand he's willing to bet on the successes of just ONE business vs all the businesses? The way I see it, it's like....if I had to make a bet that paid 2:1 that the house would win (casino would be profitable for the night) or a bet that paid 20:1 that this guy I know who usually wins at poker night would go out on top, I'd still pick the casino and would continue to do so over the course of the year. It's not a perfect analogy, but that's my perspective. Also, a great product does not mean a successful company. There is so much that goes into the management of the company, the marketing, and more that I wouldn't feel confident "investing" in it.

Since he is skittish of the market (was his bad experience by chance based on picking stocks?), paying off the mortgage is a great idea. To me, that's the ultimate in conservative approaches.

It should also be re-iterated that product development is THE MOST RISKY of all types of start-ups.

If you actually think you have the self-control to keep your cash in a bank account and not spend it until the "market crashes again", then by all means go that route.  However, given your limited experience/knowledge of finance and economics, I would say that you have a small chance of timing this correctly and keeping a level head.  I think it would be much better for you to invest in mutual funds and never look back.   

If your husband wants to start a business, tell him to study up and get a real estate license.  Then, he can buy multi-family properties using leverage from $100k of your cash.  Using his license he can avoid fees and make a higher return.  Also, he can broker deals for other people and also make money.

Honestly your husband doesn't sound like he understands economics 101 very well.  I would recommend taking the safe bets.  Also, please go see a professional financial advisor together.

Axecleaver

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Re: Wise Choices for Inheritance
« Reply #10 on: July 02, 2015, 10:44:51 AM »
It sounds like your risk tolerance is really low, so investing in long-term stock indices is not going to be a good fit. If the next market correction causes you to pull everything out and put it under your mattress, then long-term index investing is not for you. You might want to consider TIPS or treasury bills, which are very stable (but at the moment are not keeping up with inflation).

Investing in a product development company is super risky - you could pursue this but not with more than 5% of your nw. Risky investments should be at the top of a pyramid underlaid by a strong foundation of bonds/tbills, dividend bearing stocks and real estate or REITs. The middle tier is small cap stocks with more upside potential, but higher volatility.

The problem with DCA is that if you spread it out over a long period, your uncommitted capital erodes from inflation and you miss the run-ups to the crashes. Timing the market is nearly impossible. Your husband is right that the market is somewhat overvalued at the moment, but there's always some kind of problem in the world that's making the markets volatile. Waiting for the market to correct means you miss the good parts on the sidelines. And how soon after a crash do you get back in? The 2008 crash lasted for something like 9 months before it hit bottom. Trying to figure out exactly when to get in is hard.

Catbert

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Re: Wise Choices for Inheritance
« Reply #11 on: July 02, 2015, 11:56:18 AM »
If you aren't already max out your TSP/IRA/401k.  It's a good use of the RMDs on his inherited 401k/IRAs supplemented as necessary by withdrawals from cash/brokerage accounts.

Make sure you understand tax consequences of the inheritance on top of your regular income.  Everything but the retirement accounts got a stepped up basis up on his father's death.  Selling any of them now would have little, if any tax consequences.  RMDs will be taxed as ordinary income as you take them.  I think gold is taxed at an elevated cap gains rate 28%.  I may be wrong about this since I'm not a gold investor.  If I'm right then sell the gold sooner rather than later.

miamiblue

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Re: Wise Choices for Inheritance
« Reply #12 on: July 02, 2015, 01:12:52 PM »
Wow, lots of great stuff, thanks.

I don't think you and your husband have the right mindset to invest in the stock market. It is very likely that your husband will want to sell everything when there is the next downturn.

You're right about my husband, but I understand investing enough to know that it's for the long-haul (at least the investing that I do is). I didn't pull anything out during the 2008 downturn, but instead maintained my investment strategy, which has since paid off. The trick is finding a way for him to not panic, which could mean that I have to take the reigns and keep things "out of sight, out of mind" for him.

If you can help him see the logical error here, that will do wonders for your situation. Seeing the stock market as a less-sure/safe bet than a startup...

That's a tough situation growing up, but your husband wants to make these decisions emotionally, not logically. Dumping thousands into the market (which will go up over time - even if you had invested just before the crash in 2008, you'd be up by now) vs dumping thousands into a business (which is a huge risk - you're essentially investing in ONE company and gambling on its success) is a no-brainer. Can you help him understand he's willing to bet on the successes of just ONE business vs all the businesses? The way I see it, it's like....if I had to make a bet that paid 2:1 that the house would win (casino would be profitable for the night) or a bet that paid 20:1 that this guy I know who usually wins at poker night would go out on top, I'd still pick the casino and would continue to do so over the course of the year. It's not a perfect analogy, but that's my perspective. Also, a great product does not mean a successful company. There is so much that goes into the management of the company, the marketing, and more that I wouldn't feel confident "investing" in it.

Since he is skittish of the market (was his bad experience by chance based on picking stocks?), paying off the mortgage is a great idea. To me, that's the ultimate in conservative approaches.

You pegged him as an emotional investor. I have a business degree, so I understand the risks involved with starting and running a business. He is more of a free spirit and a dreamer, so he thinks I'm just being negative when I point out obvious potential risks.

The casino analogy is one he might be able to relate to (what with all the gamblers in his family). Thanks.

His bad experience was with Janus mutual funds (I think, I wasn't involved at the time). He didn't choose or manage them himself, but the money ended up in the crapper pretty fast.

It should also be re-iterated that product development is THE MOST RISKY of all types of start-ups.

If you actually think you have the self-control to keep your cash in a bank account and not spend it until the "market crashes again", then by all means go that route.  However, given your limited experience/knowledge of finance and economics, I would say that you have a small chance of timing this correctly and keeping a level head.  I think it would be much better for you to invest in mutual funds and never look back.   

If your husband wants to start a business, tell him to study up and get a real estate license.  Then, he can buy multi-family properties using leverage from $100k of your cash.  Using his license he can avoid fees and make a higher return.  Also, he can broker deals for other people and also make money.

Honestly your husband doesn't sound like he understands economics 101 very well.  I would recommend taking the safe bets.  Also, please go see a professional financial advisor together.

I definitely do NOT want to the product development route, and I'm building my case against it.

I personally don't want to keep everything in the bank because I want that money working for us instead of losing value (it's already been idle for too long) or being a temptation; if it was just up to me, I would like to invest it in index funds and bonds (I have a Vanguard account).

You're right, he doesn't understand economics, and it's been a struggle to try to teach him. I understand economics pretty well (I have an Econ minor), and I wouldn't try to time the market. However, I am not the sole decision maker here, considering that it is his inheritance, so I'm trying to get advice from others who may have been in a similar position with someone like him. He is not a numbers person and is disinterested in investing and money in general (again, historically a major source of stress for himóhe shuts down when we talk about it), so I'm having a tough time explaining things to him so that he can understand.

The real estate license idea is a good one, and I'm the one thinking of doing that myself. I'm not sure how much interest he has in being a landlord, though. I'm trying to cultivate his other interests that could be more like business endeavors with less risk. Again, the fast money mentality makes him think he's going to find the next Google or something (can you hear my eyes rolling in my head?).

Does anyone have any tips on finding a decent financial advisor? We had one that I'm really not that impressed with, plus my husband is not seeing the value past the expense. Hence why I'm trying to school up on some ideas.

It sounds like your risk tolerance is really low, so investing in long-term stock indices is not going to be a good fit. If the next market correction causes you to pull everything out and put it under your mattress, then long-term index investing is not for you. You might want to consider TIPS or treasury bills, which are very stable (but at the moment are not keeping up with inflation).

My risk tolerance is somewhat low, but I've learned to deal with it in a smart way and my portfolio is heavy on long-term indices, which I'm comfortable with. My husband's risk tolerance has become low since receiving the inheritance and watching the effects of market fluctuations on the inherited IRAs, which are more money than he's ever seen in his life. He used to have a high risk tolerance (too high) when he had less money to lose.

If you aren't already max out your TSP/IRA/401k.  It's a good use of the RMDs on his inherited 401k/IRAs supplemented as necessary by withdrawals from cash/brokerage accounts.

Make sure you understand tax consequences of the inheritance on top of your regular income.  Everything but the retirement accounts got a stepped up basis up on his father's death.  Selling any of them now would have little, if any tax consequences.  RMDs will be taxed as ordinary income as you take them.  I think gold is taxed at an elevated cap gains rate 28%.  I may be wrong about this since I'm not a gold investor.  If I'm right then sell the gold sooner rather than later.

Maxing out our tax advantaged contributions is on the list. I've already got mine set up, now I have to work on him.

We're planning to talk to someone about the tax implications to make sure we have everything straight. Good thoughts on the gold, we really don't know much about it.



What would you guys do with an inheritance like this one, not considering our personal risk tolerances?

Also, if anyone has experience trying to explain the benefits of investing to a non-numbers person, I'd love to hear some different approaches. The concepts make sense to me, so it's hard to translate it to someone who is a dreamer with little interest in numbers!

lostamonkey

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Re: Wise Choices for Inheritance
« Reply #13 on: July 02, 2015, 01:23:47 PM »
Re: What would we recommend ignoring your risk tolerance and personalities.

Personally, if I received that large an inheritance I would immediately put it into my investment account and buy index funds. If I had any tax advantaged space left I would put it in those accounts first, and the rest would go in my taxable account. It would have zero impact on my day to day life other than the grief over losing a loved one.
« Last Edit: July 02, 2015, 01:26:20 PM by lostamonkey »

johnny847

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Re: Wise Choices for Inheritance
« Reply #14 on: July 02, 2015, 01:26:20 PM »
I would invest according to my IPS.
I'm always confused by these questions. So you came upon a large sum of money. Just invest it as you would your paycheck. I fail to see how the magnitude of the sum has anything to do with it

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Jack

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Re: Wise Choices for Inheritance
« Reply #15 on: July 02, 2015, 01:55:23 PM »
If your husband is that worried about it, dollar-cost average it into the market over a several-year period (or maybe a 10-year period, if he's really paranoid).

It has been shown that even in down markets, DCAing over more than about a year is a losing proposition.

Sure, but it's better than leaving it in cash because you're too scared to DCA over less than a year.

johnny847

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Re: Wise Choices for Inheritance
« Reply #16 on: July 02, 2015, 01:59:55 PM »
If your husband is that worried about it, dollar-cost average it into the market over a several-year period (or maybe a 10-year period, if he's really paranoid).

It has been shown that even in down markets, DCAing over more than about a year is a losing proposition.

Sure, but it's better than leaving it in cash because you're too scared to DCA over less than a year.
I'm all for taking into consideration psychological factors, but this is ridiculous. If someone can't even DCA over one year, then they should just not invest in stocks at all. At least with a one year DCA there is a chance of coming out ahead in a down market. But a DCA over several years? Come on.

All this tells me is someone of this nature simply cannot stand to see their principal fall, ever.

FrugalZony

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Re: Wise Choices for Inheritance
« Reply #17 on: July 02, 2015, 02:09:08 PM »
First of all, I am very sorry for your and your husbands losses. Loosing both parents within such a short time frame, certainly is a tough situation to deal with.

Regarding your inheritance and what to do with it, I strongly recommend Jim Collins stock series
http://jlcollinsnh.com/stock-series/

It really has helped me see the light and be more comfortable with investing and such.

Best of luck with your decisions! You are in a very good position financially and those
investment problems, are really good problems to have!

All the best to you and your hubby!

GardenFun

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Re: Wise Choices for Inheritance
« Reply #18 on: July 02, 2015, 02:48:19 PM »
On the Vanguard website, there have a financial advisor service.  A minimum of $50,000 total investments is required to use it. 

I have never used it but with your overall financial level, you will easily qualify. 

Frankies Girl

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Re: Wise Choices for Inheritance
« Reply #19 on: July 02, 2015, 03:22:30 PM »
First of all, I am very sorry for your and your husbands losses. Loosing both parents within such a short time frame, certainly is a tough situation to deal with.

Regarding your inheritance and what to do with it, I strongly recommend Jim Collins stock series
http://jlcollinsnh.com/stock-series/

It really has helped me see the light and be more comfortable with investing and such.

Best of luck with your decisions! You are in a very good position financially and those
investment problems, are really good problems to have!

All the best to you and your hubby!

+1000 on the stock series.

I'm also very sorry for your family's losses.

I was your husband about three years ago. My dad died, left me about the same amount in inheritance, and I knew next to nothing other than I was quite worried about investing, but knew I needed to do something with the money (other than go on a spending spree).

First thing, I'm not sure how long it's been since he lost his dad, but there is NOTHING wrong with just letting it all sit in whatever accounts the money/investments are currently in until you both have worked things out completely. As long as the inherited IRA/RMD stuff has been taken care of, then leaving it alone and adjusting to the idea of so much money and OMG what do I do now... waiting isn't going to hurt anyone, and making emotional decisions right now is going to be more harmful than just letting things be and coming to terms with everything.

I took around 6-8 months to read and think and ask questions here, discuss with the husband, and read some more until I had figured out what sounded right for my situation. Jim Collins' stock series was instrumental in explaining to me how investing and the market works, and gave me the confidence to go forward with my own self-managed accounts. My early posts all indicate I was too fearful of ever understanding the stock market/investing and I was going to go with a fee only adviser... but I am SO GLAD now that I learned how it works and take care of everything myself. I am the poster child for the "if I can do it, anyone can" as far as self managing investments go. ;)

I invested at the top of the bull run in 2013. Everyone was forecasting a crash or at least correction "any day now." I put in the whole amount into my chosen asset allocation (all index funds) in a two day period, and each time more money broke loose from the estate, it went in immediately as well. Guess what? A crash/correction still hasn't happened yet, and if I'd not trusted that investing was the right thing to do, I'd be down over $100K right now by being "safe" with my money and staying out of the market. And if a correction happens? I'll lose most of my gains, but still have the initial investment. And even if it goes lower, I had several years of growth to offset that and my share counts are never going down so that means any losses are all just numbers on a page as long as I leave it alone and let it ride. It has been a great learning experience, and I am so happy to have figured all this myself... your husband needs to stop being fearful/angry/worried about investing and LEARN how it really works - knowledge removes the fear and uncertainty.

Who handles the money in your household? I ask, because technically if it is you, then you should be the calmer head that prevails in this situation. Your husband admits he knows very little, knows he has made (or allowed someone else to lead him into making) poor money decisions in the past, but somehow blames the market for his lack of understanding on how things work. The answer to that is either he learns himself, or he trusts someone else to do it for him... and since you are his spouse I would hope he trusts you. I would ask him to do one or the other - or even a combination (learn stuff together but still defer to you since you do have a background in econ).

If he wants to invest in this company that is going to launch the next big thing (OMG, no it isn't)... ask that he only invest a small portion (like 10K) so he can say he took the chance, pay off your mortgage, and then allow you to use the rest of it to invest in safer avenues -  in index funds - as soon as you can figure out an asset allocation that will work, pick index funds that match up (no more than two or three - simple is really best) and then leave them be.

Other really good reads:

http://www.bogleheads.org/wiki/Investment_policy_statement
^the why of how you personally want invest

http://www.bogleheads.org/wiki/Asset_allocation
^once you get the IPS figured out, you can go on to the AA

http://www.bogleheads.org/wiki/Lazy_portfolios
^best ideas of how to set up a lazy/easy index portfolio


Both of you should read through the stock series and then discuss the IPS/AAs - should be easy to get a decent portfolio set up once you're both on the same page. Good luck!!

« Last Edit: July 02, 2015, 03:39:26 PM by Frankies Girl »

miamiblue

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Re: Wise Choices for Inheritance
« Reply #20 on: July 20, 2015, 08:12:49 AM »
Thanks everyone for all the great insight.

I've been dying to dump this money into index funds now for a while, but my husband (understandingly) hasn't been in the right emotional frame of mind to make sound decisions yet. Admittedly, I've been pretty shaken as well, but I also have a completely different financial background and literacy. So it's nice to get ideas of what other people would do to confirm my own thoughts in this pivotal time in our lives.

First of all, I am very sorry for your and your husbands losses. Loosing both parents within such a short time frame, certainly is a tough situation to deal with.

Regarding your inheritance and what to do with it, I strongly recommend Jim Collins stock series
http://jlcollinsnh.com/stock-series/

It really has helped me see the light and be more comfortable with investing and such.

Best of luck with your decisions! You are in a very good position financially and those
investment problems, are really good problems to have!

All the best to you and your hubby!

Thank you so much for recommending the stock series! I'm going to devour it and see if it is something my husband might be able to "get".

+1000 on the stock series.

I'm also very sorry for your family's losses.

I was your husband about three years ago. My dad died, left me about the same amount in inheritance, and I knew next to nothing other than I was quite worried about investing, but knew I needed to do something with the money (other than go on a spending spree).

...

Wow, very relatable and it's nice to hear from someone who has gone through the same situation. We were completely blindsided by his father's death, and my husband was the sole surviving relative (parents divorced) and executor of the estate. It has been really hard on him, but he is a "tough guy" and tries not to let anyone see how much it has really affected him. Then his mother's passing, which wasn't quite as shocking but still devastating, just compounded the stress and emotional disruption. Add to that more money than either of us has ever seen in our lives, and while we are in a great financial position, it's also overwhelming.

I've managed most of the shared financial obligations in our relationship, although we've always maintained separate accounts, and I have only made gentle suggestions about what he should be doing with his 401k. His financial situation was a mess when we met, and he's come a long way since, but it has been a slow process because of his financial scars and fears. Like I said, he doesn't want to talk about it. That said, he is now more interested than ever before, and he just recently started showing an interest in learning more by reading some articles he's found in Money magazine about investing. I consider this a small victory, because he really has to show a personal interest and learn a little before he'll necessarily take my word for it (or maybe I just have a hard time explaining things at his level - he is not a numbers guy). I've been successful with my retirement investments so far, so it's more his ingrained distrust and poor understanding of investing than distrust of me.

We had a financial advisor we used to straighten some of the inherited IRA accounts out, but my husband became disenfranchised with the commission fee structure, so we're not using his services anymore. He actually suggested that we embark in educating ourselves so we can manage our own money, something I was thinking of as well (or I wouldn't be here!), so I think we're on a good path. I just need to work on my negotiating ability with him, which is probably better for a different post!

Thanks again, everyone. I love this forum and the wealth of information and insight everyone is so willing to share!

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Re: Wise Choices for Inheritance
« Reply #21 on: July 20, 2015, 09:06:28 AM »
Thanks everyone for all the great insight.

I've been dying to dump this money into index funds now for a while, but my husband (understandingly) hasn't been in the right emotional frame of mind to make sound decisions yet. Admittedly, I've been pretty shaken as well, but I also have a completely different financial background and literacy. So it's nice to get ideas of what other people would do to confirm my own thoughts in this pivotal time in our lives.

First of all, I am very sorry for your and your husbands losses. Loosing both parents within such a short time frame, certainly is a tough situation to deal with.

Regarding your inheritance and what to do with it, I strongly recommend Jim Collins stock series
http://jlcollinsnh.com/stock-series/

It really has helped me see the light and be more comfortable with investing and such.

Best of luck with your decisions! You are in a very good position financially and those
investment problems, are really good problems to have!

All the best to you and your hubby!

Thank you so much for recommending the stock series! I'm going to devour it and see if it is something my husband might be able to "get".

+1000 on the stock series.

I'm also very sorry for your family's losses.

I was your husband about three years ago. My dad died, left me about the same amount in inheritance, and I knew next to nothing other than I was quite worried about investing, but knew I needed to do something with the money (other than go on a spending spree).

...

Wow, very relatable and it's nice to hear from someone who has gone through the same situation. We were completely blindsided by his father's death, and my husband was the sole surviving relative (parents divorced) and executor of the estate. It has been really hard on him, but he is a "tough guy" and tries not to let anyone see how much it has really affected him. Then his mother's passing, which wasn't quite as shocking but still devastating, just compounded the stress and emotional disruption. Add to that more money than either of us has ever seen in our lives, and while we are in a great financial position, it's also overwhelming.

I've managed most of the shared financial obligations in our relationship, although we've always maintained separate accounts, and I have only made gentle suggestions about what he should be doing with his 401k. His financial situation was a mess when we met, and he's come a long way since, but it has been a slow process because of his financial scars and fears. Like I said, he doesn't want to talk about it. That said, he is now more interested than ever before, and he just recently started showing an interest in learning more by reading some articles he's found in Money magazine about investing. I consider this a small victory, because he really has to show a personal interest and learn a little before he'll necessarily take my word for it (or maybe I just have a hard time explaining things at his level - he is not a numbers guy). I've been successful with my retirement investments so far, so it's more his ingrained distrust and poor understanding of investing than distrust of me.

We had a financial advisor we used to straighten some of the inherited IRA accounts out, but my husband became disenfranchised with the commission fee structure, so we're not using his services anymore. He actually suggested that we embark in educating ourselves so we can manage our own money, something I was thinking of as well (or I wouldn't be here!), so I think we're on a good path. I just need to work on my negotiating ability with him, which is probably better for a different post!

Thanks again, everyone. I love this forum and the wealth of information and insight everyone is so willing to share!

That's about 90% of the difficulty already overcome. Unless the advisor has signed a fudiciary pledge, they're usually out to earn money at your (great) expense!

Now you're just figuring out the details. I'm sure you'll be able to work it out with him!