What would you do with an influx of money you didnt expect?

[Garion_55]

This week saw the conclusion of a family matter that ended up with me getting a large sum of money that came unexpectedly.


its basically about 7 times what i normally earn in a year.


Ive never known a life other than one where i could quit or lose my job at anytime and have always lived paycheck to paycheck. and not a very large one at that.


Now I have a big chunk of security in the bank with some breathing room to decide what to do with the rest of my life.

I decided to go back to school and work on an IT degree. Something I should have done 20 years ago but never made it happen.


I can almost see the shitshow that is coming to this country in the next few years. Stock market crash. recession.huge deficits back. massive debt. unemployment rising.


When I graduate next year I am going to be in a good place with a new degree in a field that has 0% unemployment and this chunk of money in the bank and I hope to ride out the rest of the trump years, assuming he lasts 4 years, in relative safety until we get a real president again.


Pretend you just got 7 times what you normally earn in a year. What would you do?

[neeksgeek]

1. Pay off some student loans and keep living paycheck to paycheck.

[Garion_55]

3. how much were your loans? i am going to take out fed ones for school

what field?

my courses are going to end up being about 40k. but if i get a job paying 60-80 to start im good with that.

[Croney]

13. Why borrow money?

The interest you pay might seem low, but if you just pay upfront with part of your windfall, you'll avoid the interest burden plus maybe get a tax benefit for the educational expenses. (But I'm not a financial planner and might be off base with my advice.)

[neeksgeek]

55. I made some mistakes. I tell my students to avoid loans.

I refinanced after undergrad, and this had a negative effect on my grad school financial aid. Perversely this landed me in more debt because I stupidly took out a private student loan to make up the difference.

By loans I mean borrowed money, of any sort. I tell my students not to do it. It's a trap.

[jberryhill]

2. I'd tell you, but you have to pay me first.

[CurtEastPoint]

4. Buy a house in France and GTFO of the US.

[July]

5. Congratulations on your unexpected good fortune!

It sounds as if you've got a good plan.

I think I might make one ridiculous purchase (car? trip? art?) and then give my kids a chunk of what's left, with the remainder going into the bank to finance sensible shoes in my waning years 😉.

[Hortensis]

34. Yes, and especially on a great, wise plan that will build on it.

At my age, I'm more with you, July. Indulge in some enrichment of our lives and invest the rest for our kids and grandkids. Might not give it to them. One pair just spent most of a little little inheritance on remodeling and new furniture, making me think maybe I'd tie it up and let it hopefully compound for a few decades into really big gifts.

[BigmanPigman]

6. Don't tell anyone!

Invest it wisely and diversify. Make hay while the sun shines. Don't invest everything into one fund, gold, real estate, etc. Vanguard is pretty safe. Don't buy a ton of worthless shit either. Buy yourself and your family or friend a nice gift, take yourself on a vacation, donate to a charity, get a new sofa then save the rest. It won't go as far as you think and hope it will.

[Luciferous]

18. Good point! I wouldn't tell anyone either.

[WinkyDink]

7. First thing: Pay income taxes on it, most likely.

[byronius]

20. Sounds like an inheritance of some form.

Unless it's pretax retirement, no income tax.

[WinkyDink]

32. I paid a five-figure state inheritance tax last year. And a very hefty Federal income tax hit on

inherited US Savings Bonds.

[byronius]

38. There's a welcome problem. But point taken.

[handmade34]

8. I just did...

(came into a moderate sum of money) ...gave my new business to my son and staying home building a chicken coop this week... planning another hike on the AT next spring (my only extravagant purchase was new ultralight hiking gear)

hopefully will have many opportunities to work and fight for Democrats... be part of protests/civil disobedience (I can afford to get arrested now)

good luck at school Garion

[Hortensis]

35. Someone whose idea of the good life is building a chicken coop

and hiking is going to have a "rich" life no matter what.

[Bettie]

9. College

for my three kids. I'd love them to be able to graduate without crippling debt.

[jalan48]

10. Travel and get a break from Rump World.

[KatyMan]

11. Not to pry

But your age (even an age range) would help.

[Garion_55]

25. just turned 50

[LisaM]

12. Buy a house or condo (or even a cabin somewhere).

Home ownership has always eluded me, and I've love to be somewhere where I could paint the walls or change out the stove if I wanted to.

It couldn't be fancy, but that would be just about enough to buy a cabin on a lake or a decent condo or townhouse.

[FLPanhandle]

14. I have everything I want so more money just means a quicker retirement

Sort of boring answer but I've gotten to the point where I'm happy with my situation.

[CaliforniaPeggy]

15. That happened to me a few years back.

I promptly opened a couple of CD accounts.

Bought some really nice jewelry, which I do wear.

Made some great presents for my children.

Helped a friend.

The rest in the bank, where I'm not touching it any more than I can help.

The feeling of security is unbeatable!

[k8conant]

16. IT doesn't have 0% unemployment unfortunately...

I keep trying to get back to where I was 15 years ago, but no one will hire me because I'm too old??

[HipChick]

22. Exactly...and unless you are working IT for the govt...Outsourcing has put a huge dent in it

[Garion_55]

30. ahhh

just read that online somewhere.

what i do know is every time i go job hunting what i notice most are all the ads for it and cyber and network. that and health care always seem to need people.

considering the jobs im used to working even an entry level job now will be a huge improvement.

[Luciferous]

17. Congrats! I would pay off my debt, maybe take a nice trip, save the rest.

I find as I get older I don't really need much to be happy

Oh, and I would buy all the books I have on my Amazon wish list!

[byronius]

19. Land or property.

[nolabear]

21. Finish securing my old age and give it to my kids.

Both are working toward being independent business owners and I'd love to help make those dreams come true.

[krispos42]

23. Buy a 3 bedroom condo

Pump the rest of it into my kids 529 plan. Then increase my 401k contribution, try to max it out with the money I'm saving in rent.

Or maybe see if I could put a large down payment on a house and get a teeny mortgage. Then try to max out contributions to my 401k and the 529.

I currently rent an apartment. :-/

[renate]

24. woo hoo! congratulations!

I know somebody who's been very successful in IT without a degree, by the way. I wonder whether you need the whole shebang of a degree or if you could take enough classes to get the job you want, without having to spend two or four years doing it.

I'd say an investment in your future makes a lot of sense, but I'd sock away the rest if you can, especially if you're young, because compound interest is your friend. If you're used to living modestly and were reasonably comfortable that way, there's not much to gain from changing your lifestyle too dramatically. (Google "hedonic adaptation"!) On the other hand, it's worth investing in lifestyle improvements that you will genuinely enjoy. Treat yo'self!

Depending on whether you want to spring for the cost of a financial adviser or not (which is probably smart, because they could help you figure out the tax implications of suddenly getting this huge influx of money), you might want to subscribe to the Motley Fool or something like that. I've also had good luck talking over the phone to representatives at Charles Schwab... it's been a while since I called but whenever I did, I never felt rushed or like I was taking up their valuable time.

Congratulations!

[sarcasmo]

26. Pay off debt and buy acreage with a stream/river flowing through the property.

[shanti]

46. That would be my plan too

Would love to find an off-grid piece of property with a natural spring.

[sarcasmo]

49. I'm looking in upper Wisconsin.

[ImpeachTheGOP]

27. Pay off debt, invest and take a nice vacation.

I could use a nice infusion like that.

[d_r]

28. if I had enough

after paying off debts I would donate to a small school here that follows an ecology teaching model

[fierywoman]

29. Buy arable land.

[Major Nikon]

31. Investing in yourself isn't a bad idea

However, you may wish to also access your retirement prospects. You said you were 50. If you don't have much in the way of savings, 7 times your yearly salary could go a long way towards securing a decent retirement income.

[Generic Brad]

33. I wouldn't change a thing in my lifestyle

But I may sleep better. Just having that security provides enough breathing room to not have to worry about the financial impact of ever losing employment. It would allow me to take more professional risks. It would allow me to retire at 67 instead of 70.

Outside of that, it would not change my current spending habits. My needs are simple and would remain so.

[Hassin Bin Sober]

36. I don't know that I would be looking to spend a bunch of money to re enter the job market at 50

Depending on where you are in the country I would look at real estate. Preferably something to live in AND something for income.

[Nay]

53. I'm with Hassin. Don't spend much money on education for a job at your age. It prob

won't pay off.

My advice? Try to immigrate to Canada. It's iffy because of your age, but worth a try.

[kacekwl]

37. Breath

[MissB]

39. I'd probably just bank it.

My mortgage has only 8.5 years left; I will likely work another 11 years. I'd probably just add to the nest egg that I need to bridge the medical insurance and income gap between when I want to retire and when I can start drawing SS and my pension.

If I were younger I'd maybe consider buying a rental property or two (depending on the amount of $ we are talking about.)

[cbdo2007]

40. Good move getting into IT...

Something I, myself should have done about 10 years ago. Don't worry about the naysayers here, you've got a great chance at getting an IT job and I hire people all the time who are older. Find a good recruiter when you get done with school and they should be able to help you get your foot in the door somewhere.

Myself...I would pay off my house and all other debt, take a really nice Hawaiian vacation and then put the rest in some stock market investments.

[BainsBane]

41. Invest it for retirement or any future hardship

Pay off any debts. Just do not quit your job and think that money will last long.

[Iwasthere]

42. Find an obscure place in the world, Tasmania perhaps, but even in the US

Buy a spot of land on a hill, should be cheap. Build a home into the hillside and enclose the front in a massive glass or glass-like shelter, with slide openings for summer. Grow even tropical fruits year around. Clean pure air filtration too. Security. That's what I dream of.

[Nevernose]

43. Good for you! Seriously

I'd pay off debt, go out for a super nice dinner, put extra towards my retirement. If there was still any money left after paying mortgage and student loans, I'd put the rest in a Vanguard Mutual with my wife and daughter as co-owners (or whatever the term is).

[Blue_true]

44. I will tell you what I did in 2007.

I went into highly secure bonds and money funds. When everyone were tearing their hair out in 2008-2009, I was safe. One Obama got elected, I went all in on stocks and made a lot of money.

My suggestion, pay for your education, park the rest is low risk bond funds and low risk money funds. Do it through a mutual fund company that has low fees, if you want the name of one that I really like, pm me.

[customerserviceguy]

45. Being as I'm now retired

it would go to fund my remaining years. I saved up some money during my working years, I'll get a small pension when I hit 65, and it looks like Social Security will probably be solvent enough for the rest of my life, but it would be good to have a bit more cushion in the later years, just in case I'm wrong about that last point.

[bluepen]

47. Right now? I'd be able to evacuate!

But long-term, bigger picture... I'd go back to school.

[pnwest]

48. Put one year's salary in savings, and

don't touch it unless you're unemployed, and you never have to worry about the paycheck to paycheck sitch again. Buy a good, solid, reliable, modest gently used car with cash. Put all of the rest down on a house or condo, pay it off as quickly as possible, and start socking away cash until you retire, to cover your retirement. Think about how safe you'll feel the next time you're between jobs, and you have money in the bank to cover you, a car that's running, and a paid-off house that can't be taken from you.

[Iggo]

50. Add it to the retirement pot. (I'm not that far off.)

[JustAnotherGen]

51. I'd put

some in a retirement account of mine and give the rest to the UNCF.

[PJMcK]

52. It happened to me last year

As a co-executor of an estate, I received my commission. A few months later, I got paid for a re-use of music I had produced years earlier. The combined amount was about one year's income.

First thing I did was pay the income taxes, (you probably don't have that issue if your windfall was an inheritance). Next, I met with my investment advisor to develop a diversified plan for 75% of the money. Some of the remaining money was used to pay off debts left over from my divorce a few years earlier.

Then I went to Paris for a week!

Be prudent. Get professional advice. Then give yourself a treat!

[Orrex]

54. When it happened to me about six years ago we panicked

Last edited Tue Sep 12, 2017, 08:19 AM - Edit history (2)

My wife and I actually got into spirited arguments about it because we'd never--even in childhood--been in a position of financial security, and we were absolutely terrified that we'd fuck it up.

We were facing several weighty obligations, and we had no idea of where best to apply the money. No one in our extended families was in a position to offer good advice, either.

Ultimately, and after much wailing and gnashing of teeth, we made what appeared (and still appears) to be the right decision, and we continue to benefit from it daily.

It wasn't even a huge sum, but it was more than we'd ever had to deal with in our personal finances.


Neither of us is stupid, but our experience tells me that the notion about "informed investment choices" is bullshit for anyone who wasn't fortunate enough either to have come from a financial secure family or else have the benefit of financial education or professional advice.


My immediate suggestion is to put the money in a stable, low-tax investment vehicle, like a mutual fund invested in municipal instruments. You won't make a big return, but it'll be safe. Satisfy any immediate and urgent financial obligations, and maybe allot a certain amount for "fun" purchases, but otherwise don't touch it until you have a plan.

Unless you really need it, if you use it as a supplemental income source, you'll piss it away and wind up with nothing to show for it.