So he’s going to inherit approx $200k. He was asking me what he should invest in. I gave him some basic/standard advice but was curious what you guys think. He’s 50 and would probably need some each year to make ends meet but would want to invest as much as possible. What do you recommend other than hookers and blow?

Land, they aren't making any more of it.

I'd refer him to a trusted specialist in income producing investments.

This message has been edited. Last edited by: roberth,

Not near enough info.

Current retirement funds?
Own a home?
Debts?

How was he going to "make ends meet" if he hadn't got this money?

In scenarios like these, in my experience, the hard reality is if the person, by age 50 doesn't already have in excess of $200K then they won't have this $200K by time they're 62 (time they're first eligible for social security which they'll probably start taking).

Based on this, and the statement you made your friend will probably need some of this money to live in, my recommendation for this investment is to buy several $25K CD's at your local bank with varying maturity date: one, three, five and 10 year maturities.

Yeah, you're not gonna have a lot of earnings, but it's spaced out to get him to social security.

quote:

Originally posted by craigcpa:
In scenarios like these, in my experience, the hard reality is if the person, by age 50 doesn't already have in excess of $200K then they won't have this $200K by time they're 62 (time they're first eligible for social security which they'll probably start taking).

Excellent point. If he doesn’t already have some financial skills at this point or has no one to trust with those skills IMO he’s in a difficult situation. Bank interest will not amount to anything significant. Perhaps some low risk mutual funds from Vanguard.

Pay off any existing debt. Go from there.

Something similar happened to us. We first paid off the house and the cars. Other then monthly bills we had no other debts.
THEN we went to an investment counselor. My spouse is much better with money and we were already going to have a comfortable retirement. With the money, bought more stock, diversified, had money markets, and started working our IRAs. We chose to settle in for the long haul. There was nothing flamboyant. Neither did we play buying and selling whenever the market hiccuped.
It’s been good.
I’d tell the guy to asked people for advice on investment counselors, then to interview them.

quote:

Originally posted by cparktd:
Not near enough info.

......


How was he going to "make ends meet" if he hadn't got this money?

Yep, no way to offer any advice, not
even couldd a CFP without doing risk assessment and crunching numbers.

The last part is troubling. A windfall sould not be a part of retirement strategy, and certainly should not be accessed in 50's (working years). It should only be used in retirement or if lucky to leave on to the next generation.

Peter Lynch, a famous mutual fund manager, had this to say regarding the things to invest in that produce the best returns;

A college education.

A house.

A stock portfolio.

I say the guy should pay off his debts, then make sure he has a place to live.

V.

My son, a finance major at Virginia Tech, just yesterday said I should invest in land and/or property in Blacksburg, VA. It is ready to go BOOM in terms of enrollment and student housing is already mega-crunched.

I probably won't, but on the face of it, looks to be an excellent opportunity.

quote:

Originally posted by Batty67:
My son, a finance major at Virginia Tech, just yesterday said I should invest in land and/or property in Blacksburg, VA. It is ready to go BOOM in terms of enrollment and student housing is already mega-crunched.

I probably won't, but on the face of it, looks to be an excellent opportunity.

There are a lot of real estate investors that focus on investing in college towns.

here are 4 stocks I like and own.
Ford (F) pays 6.3 % div
Walgreens (WBA) 3.5%
Wesbanco (WSBC) 3.5%
Kroger (KR) 2.75%

I like stocks that have to face the shareholders 4 times a year.

If you are young go with real estate. I've been there and done that. It worked fine and I still own some commercial re and a couple of contract sales. I prefer mailbox money at this stage of the game.

Marijuana emporiums.

JL Collins makes a lot of sense:




Link to original video: https://www.youtube.com/watch?v=T71ibcZAX3I

quote:

Originally posted by arfmel:
Marijuana emporiums.

WEED KANG!!

quote:

Originally posted by arfmel:
Marijuana emporiums.

My father in law did; he is making a good amount of money from it.

quote:

Originally posted by cparktd:
Not near enough info.

Current retirement funds?
Own a home?
Debts?

totally agree

but if $200k would zero out the mortgage that's a nice option assuming all else is under control...

$200k is a nice chunk of change - don't get me wrong - but it's not exactly a truly life altering amount either

in other words - it's not 'forget you' money

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quote:

Originally posted by Sig209:

quote:

Originally posted by cparktd:
Not near enough info.

Current retirement funds?
Own a home?
Debts?

totally agree

but if $200k would zero out the mortgage that's a nice option assuming all else is under control...

$200k is a nice chunk of change - don't get me wrong - but it's not exactly a truly life altering amount either

in other words - it's not 'forget you' money

---------------------------------------

Paying off the mortgage is an excellent idea (or paying cash for a place to live if you're renting) and any other debt, as it reduces most peoples monthly expenses greatly and then they can live a lot easier. However, most financially irresponsible people will find a way to just rack up the same amount of debt also. It sounds like this friend is not very financially responsible and just inherited the money. I agree that without more information it is impossible to give advice.

6% annuity with a very small payout starting now.