Author Topic: What to do with $100K and beyond  (Read 2139 times)

afoonah

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What to do with $100K and beyond
« on: June 16, 2018, 09:22:11 AM »
What to do with $100K and beyond. Thanks for any help or suggestions or considerations.

Facts:
I have 2 kids 10 & 11 yrs
I am old (ish) at 51 years
I rent
I have average credit (no late payments, derogatory marks, short history) and weak work history (14 year gap, full time 1 year).
I have no assets or debts except:
$100,000 to invest
I currently live at my means

Possible goals:
(a) Grow money 14 years, pay children's accrued college debt in full, become poor.
(b) Become financially independent, help kids with college debt payments and/or live with me 3 yrs post grad (with specific plan).
(c) Become rich.

Methods I'm looking at
(a) modest rental property, putting any profit into stock/bond indexes at 80/20 split.
(b) put all into stock/bond index, rolling over profit
(c) explore risker, higher gain investments
(d) partner up with a venture capitalist acquaintance locally
(e) anything else within reason

My personal cons: living at means, run into subsequent money emergencies, tend not to save (all related, obviously), no history of financial abilities or family guidance, occasionally fearful/overwhelmed.
My personal pros: excited, optimistic, able, bursts of energy and enthusiasm, creative, can self limit, average intelligence, cynical but not overly so. 

afoonah

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Re: What to do with $100K and beyond
« Reply #1 on: June 16, 2018, 09:49:33 AM »
Goodness, that sounds a bit robotic. I'm a mom in the Northeast, from a family that doesn't "get" money. I'm maybe too late, somewhat, but post divorce assets are giving me a possible chance that I don't want to blow! It's likely my kids can't expect anything else from ex spouse, who resents paying support and sharing assets. So, their done, in his estimation. Thanks again!

AMandM

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Re: What to do with $100K and beyond
« Reply #2 on: June 16, 2018, 01:08:40 PM »
Hello afoonah who is clearly not a robot ;-)

Here's a thread with detailed recommendations on what order to invest your money in:
https://forum.mrmoneymustache.com/investor-alley/investment-order/

Of your possible goals, I think (a) is not a good plan. Plan instead for your kids to go to college with no or minimal debt, which they will pay off themselves. You are in a "put on your own oxygen mask first" situation.

More fundamentally, the biggest obstacle to any of your possible goals is that you live at your means, so this $100k is your only resource for achieving those goals. And $100k is simply not enough to accomplish any of them.  Since you have on your side your energy, enthusiasm, and capacity to self limit, I would heartily recommend posting a complete case study. People here can be extremely helpful at finding ways to trim your expenses so that you can (1) have money to increase your savings and (2) reduce the total amount you will need to save to achieve financial independence.
https://forum.mrmoneymustache.com/case-studies/
Read the "How To" post and follow its format for best results.

Good luck!

afoonah

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Re: What to do with $100K and beyond
« Reply #3 on: June 16, 2018, 03:55:30 PM »
Thank you AMandM,

You've given me something to think about, and homework to do.

I do not know what those investments (which you linked) are. I do not have work benefits that include retirement accounts of any kind, so I've never explored these.

Thank you for sharing the case study link. My posed question is based on where I expect to be in a year rather than where I am. That's because I feel I have nothing to work with now, and so am planning ahead.

I new light, I think I'll regroup my thoughts and consider posting my actual current situation. Perhaps there is more I could be doing now.

Thanks for kindly offering a lamp to the lost.



GrayGhost

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Re: What to do with $100K and beyond
« Reply #4 on: June 16, 2018, 04:40:10 PM »
A year is way too short of a timeline to see an investment perform... it's too susceptible to market fluctuations and other things. The first year of a business is very probably not going to be profitable, and an average stock market return in a year is 7%... which gives you $107k, which is nice, but not a "huge" increase by any means.

If I were you, I'd put away that hundred grand immediately so that it can't be touched, probably a nice mix of stocks and bonds, and work on working. You have plenty of time to FIRE, but the foundation of that is not to gallivant off on get rich quick schemes and to not think that a hundred grand is more money than it is... it's a life-changing amount of money, but nowhere near what you need to retire on, at least, not in the West.

afoonah

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Re: What to do with $100K and beyond
« Reply #5 on: June 16, 2018, 09:10:11 PM »
Thank you GrayGhost. Sorry for the confusion. What I meant was that I am approximately a year before having that money. I was looking forward when I posed my original question. Currently my resources are frozen during process of divorce. Post divorce I estimate having those funds at the very least, after paying debt and legal costs. I'm trying to figure out how it can work for me at that point. However, given above thoughts, I think perhaps I can start reducing some debt now and curb spending while still in limbo. Once I have the funds I am looking at a 14 year run (or longer depending on plan). That's not very long - but better than a year!

use2betrix

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Re: What to do with $100K and beyond
« Reply #6 on: June 16, 2018, 09:29:50 PM »
I would suggest reading all MMM blog articles, and googling the terms you don’t understand and read further on them.

You have some serious WORK and research to do. Many decisions to make for yourself. Coming to a forum and asking questions is great, but it seems to me as an indicator as you not having much interest in doing much learning. You need to dig in and learn.

You stated you didn’t understand what the investments were in the link provided. A 30 second google search will explain them. You shouldn’t even be telling us “you don’t know what it means..” you have access to the internet, look it up!

jlcnuke

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Re: What to do with $100K and beyond
« Reply #7 on: June 17, 2018, 09:17:28 AM »
Well, since you don't have the money yet, here are my suggestions:

#1. Stop living "at your means". When people say they're living at their means, what they don't realize is that they're living above their means. Yes, if you aren't saving, don't have an emergency fund, etc, then you're lifestyle exceeds your means because you WILL need that emergency fund and you WILL need savings etc. As such, if your spending doesn't include those things then you're living beyond your means. Cut your spending. TONS of information here and on the blog on ways to do that.

#2. You have time, so you need to learn investing terms and the basics of investing at a minimum. By this time next year you should have a good grasp on the various types of investments, their risk levels, diversification ,tax implications of different investment types etc..... and while that may seem daunting, you can gather all that information by just reading up on those things for a couple of hours a month. Then you'll be in a great position this time next year when you expect to get that money.

#3. Cut your spending, you can't afford it... yes, I'm saying it twice because it's that important.

For learning, I personally recommend starting here: https://www.bogleheads.org/wiki/Getting_started
It's a great free resource imo.

afoonah

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Re: What to do with $100K and beyond
« Reply #8 on: June 17, 2018, 07:20:44 PM »
Thank you for the good suggestions - especially about spending being beyond my means already. I never considered it that way.

Sorry if I've tried anyone's patience, lol! I'm here asking questions for a reason, and isn't how financially literate I am. There's nothing here that I'm not interested in learning. The link was a lot to slog through prior to a timely reply. I've half finished the JL Collins book, which is how I ended up here. I am making the investment in learning. I'm already making a lot of headway, although it doesn't show.

The various types of retirement accounts and tax implications and regulations and situations are going to be the toughest bit to hack away at. It literally sounds like a foreign language to me. Except when I look up the translations they're equally unintelligible. Perhaps I'm a bit less than my claim of average intelligence, however I am good with google, and will find the dummies versions in time. I'm trying to get the broad strokes now, and have only just figured out that I actually need to start applying advice now, not a year from now... Starting with that for the present. Thanks again to anyone caring enough to respond. Very cool and amazing of you all!!!!
« Last Edit: June 17, 2018, 07:24:27 PM by afoonah »

afoonah

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Re: What to do with $100K and beyond
« Reply #9 on: June 17, 2018, 08:07:29 PM »
Thanks to the challenges, above, I beat back the overwhelmed-feeling and braved google - not as tough as I thought so far. So at least I learned I for sure don't have a 401k, or a 457 or a 403b, at least for now. I'm learning about IRA's now. It's a bit eye opening IF I'm understanding it so far. I thought these things were savings accounts, not tax-sheltered investment gateways, so that's interesting. Not really understanding anything more as yet. Back to slogging...

AMandM

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Re: What to do with $100K and beyond
« Reply #10 on: June 18, 2018, 08:02:03 PM »
Way to go! Good for you for taking the first hurdle!