The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: turtlefire on July 31, 2019, 02:31:10 AM
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I am curious as to what you would do with $100k cash? I ask this because I am recently selling a duplex and will have about that in proceeds ($112k). I have an idea of what I am going to do with it, but am curious as to what some of you Mustachians would do with it?
My current idea of allocation:
- pay off my wife's student loans $15k
- pay off remaining consumer debt $3k
- buy RV to live in full time and travel part-time $40k. This also lowers my rent considerably, so I use it as an investment option as it produces real savings each month.
- start a business on the side $10k
- drip the rest into an IRA and Roth IRA $32k
Are there any other ways to do this more efficiently in your opinion?
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I would invest it according to my Investment Policy Statement (https://www.bogleheads.org/wiki/Investment_policy_statement).
What are the interest rates on your debt? You should take a look at the Investment Order post (https://forum.mrmoneymustache.com/investor-alley/investment-order/msg1333153/#msg1333153).
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I am a little confused as I think you're question is meant to be what should you do with the $100k, as what anyone else would do may not apply to your situation. But in reading your post, you have a clear path to use the $100k. Now I'm not sure if you're asking should you invest the full $100k or do your plan.
Can you provide some clarity as to your question? Are you asking if you should follow through with your plan? What other options are you considering doing with the funds?
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- pay off my wife's student loans $15k
- pay off remaining consumer debt $3k
I'd pay off any debt with an interest rate higher than 3%. I'd put the rest into VT (https://investor.vanguard.com/etf/profile/VT) (moving as much into my IRA as possible, obviously).
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What *I* would do? That's somewhat easy as I have a settlement check for about half that amount coming in another week or so. I have no debt, so I'd get ahead of some things.
Overpay for next quarter's estimated taxes: $1400
Pay the last quarter property tax: $2k
Buy a car that we already plan to buy: $25k
Buy a winch for my Jeep: $450
Pre-pay all of our upcoming credit card bills: $5k
Buy snow tires for that new car we're buying: $1k
Put a new roof on the house, which is due: $15k
Load up Redneck Bank Megamoney account to the max: Whatever is left to spend (already have $25k in there)
Overpay to son's school for upcoming fall tuition: $10k
If this were $100k, not the $50k-ish I plan to receive, throw the rest into Schwab and buy SCHB.
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Well, probably a lot more information is needed to give you helpful advice.
- Paying off loans vs investing largely depends on the interest rate - see investment order posted above.
- What’s your current rent? RVs can be money pits both when used for the odd weekend “camping”, but also sometimes when lived in full time. I have a coworker that lives full time in a nice RV, I’ll bet between the cost of the pad he rents and the money spent on upkeep and repairs (he DIYs at least half of these) it costs about the same as renting an apartment in our somewhat HCOL area. Your situation may be different, maybe you are an RV mechanic or will get lucky with one that is extremely reliable.
- What is the side-business? How’s the 10k going to be spent? If you have a solid plan and 10k is enough, then go for it. If you don’t have a solid plan, I’d recommend putting in no money, or as little money into the business as possible until it’s looking like it’ll pan out. If you have a solid plan, but 10k is the minimum needed, I’d keep a lot more than 10k aside in case the business takes off and you need to throw money to keep up with growth
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*I* would dump ~$96-97k into the market, per my set AA. I'd probably use the rest to plan a vacation this fall.
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*I* would dump ~$96-97k into the market, per my set AA. I'd probably use the rest to plan a vacation this fall.
What sort of investments would you do?
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- buy RV to live in full time and travel part-time $40k. This also lowers my rent considerably, so I use it as an investment option as it produces real savings each month.
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Seems cheap. Buy and live in and travel for 40K? Most live-in used RVs start at about 50k, even for a very modest one.
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*I* would dump ~$96-97k into the market, per my set AA. I'd probably use the rest to plan a vacation this fall.
What sort of investments would you do?
Vanguard index funds. Or if you are asking what kind of account, assuming I'd maxed out any company match, I'd put it in a Roth, if that wasn't already maxed. Since, in my specific situation, I have no space left in any of those categories, mind would go in a regular taxable, non-retirement account.
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VTSAX
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I'd pay off all my debt.
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Will you owe tax on the proceeds?
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What "I" would do?
Debt>Pad EF>Max tax-deferred accounts>Party like its 1999 with the remainder
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For starters, don't buy the RV. That's stupid, unless it's a $500 parked somewhere almost free one with no leaks or holes in the floor.
I'm a debt hawk. I'd kill any non mortgage debt first. Then buy VTSAX. Then more and more and more. Someday that portfolio becomes a freakin rock star.
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What *I* would do? That's somewhat easy as I have a settlement check for about half that amount coming in another week or so. I have no debt, so I'd get ahead of some things.
Overpay for next quarter's estimated taxes: $1400
Pay the last quarter property tax: $2k
Buy a car that we already plan to buy: $25k
Buy a winch for my Jeep: $450
Pre-pay all of our upcoming credit card bills: $5k
Buy snow tires for that new car we're buying: $1k
Put a new roof on the house, which is due: $15k
Load up Redneck Bank Megamoney account to the max: Whatever is left to spend (already have $25k in there)
Overpay to son's school for upcoming fall tuition: $10k
If this were $100k, not the $50k-ish I plan to receive, throw the rest into Schwab and buy SCHB.
You know the poor SOB comes here for some free internet ingesting advice. You're incredible.
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That would give me the exact amount I would need to sell the paid for house I have and buy a small lake house I would want and have a very small ten year mortgage so wouldnt change my Fire'd plan.