What's the best way to invest?

Gothic Girl · 08-25-2005, 02:25 PM

I'm getting ready to settle a lawsuit and should be getting anywhere from $15,000 to $25000. I want to take a couple thousand out and put into savings, then invest the rest. Ultimately I'd like to use this money towards a down payment on a house.

The biggest thing I need is to not be able to touch the money, or else I'd go buck wild at Hot Topic and Woot. So I was thinking a CD. But I don't know very much info about it. My husband has 2 IRAs, Traditional and Roth. Not sure which one it is, but I know that we can use the money to buy a house without any penalties. So I was thinking about just throwing all the money into there. It'd be harder for me to touch, but which option would give me a better interest rate?

brainsmile · 08-25-2005, 02:50 PM

ialsohaveadream · 08-25-2005, 02:58 PM

CDs aren't giving excellent interest rates right now, so I'd avoid them. A lot of it depends on how long you want to leave the money alone to let it grow. If you plan to use it in 6 months, you shouldn't be expecting a 20% return.

smeakim · 08-25-2005, 03:19 PM

Well right now it depends. If you are not putting more than 20% down on house there is no reason to put the whole amount towards that. The 20% will get rid of mortgage insurance. I would figure out how much the house might cost and if the 20% is not possible leave out the 3% which is usually a min. Also don't go for the interest only or arm you will regret it in 5 years when the rates go up and you have to sell or refinance. You can get 3.3% at ING which is pretty good just incase you need the money for some reason. If you are buying a new home don't for get landscaping, window coverings, transh cans, any upgrades you might want to add like a new deck. After taking out that from the settlement plus the 3% you should pay down your debt. If you don't have any or don't want to do that, put the money into a college savings account for the little one. You can designate him as the recipent. If he doesn't go to college in the future the amount you take out is taxed at normal income plus 10%. Also if you don't want access to the money look into life insurance. You can get a policy and then deposit the difference into it. You pay a 5% fee but you earn a guaranteed amount. When I thought about it three years ago you 7.5%. You can take it out in 10 or so years earning a guaranteed amount. Also look opening an IRA foryourself and depositng the max for the year. Not only do you get the tax break but you put money away for retirement. It all just depends maybe give us some more thoughts on what you want..... JMHO

MikeD · 08-25-2005, 04:22 PM

Get a financial advisor. Have him/her review ALL of your finances, not just your lawsuit $$$. They should not only help you invest it wisely, but also plan for future expenses (college, retirement, etc.).

InfiniteNothing · 08-25-2005, 06:30 PM

Don't get a finacial advisor. They get paid either way. Do internet research (fool.com?) and self invest (stocks? bonds?). If you have money to blow I've always wanted (I guess not wanted very bad) to try that informercial system that has green lights and red lights that tell you to buy or sell.

Cubsfan · 08-25-2005, 06:38 PM

If you belong to a credit union, see if they have financial advisors. Mine has them for free.

Kevster · 08-25-2005, 08:27 PM

ygpm.

MikeD · 08-25-2005, 09:01 PM

Quote:

Originally Posted by InfiniteNothing

Don't get a finacial advisor.

Sorry bro, but I think this is bad advice. Nothing against GG, but she's struggling with the difference between IRA's. She needs a professional; nothing wrong it, and he would serve her interest best.

You can find enough info online, but when you're talking about a sizable sum of money and your entire financial portfolio, one should look for more than a few websites.

JMO...

chadlnc · 08-25-2005, 09:36 PM

Quote:

Originally Posted by smeakim

After taking out that from the settlement plus the 3% you should pay down your debt. If you don't have any or don't want to do that, put the money into a college savings account for the little one.

If you have debt and don't want to pay it off, smack your head against a wall until you do. If you have debt, pay it off. If you want new clothes from Hot Topic and don't want to pay off debt, pay off your debt. Others may disagree with me, but I don't care. PAY OFF DEBT if you have it. Get the point?

zippyjuan · 08-26-2005, 12:05 AM

If you are paying 18% on a credit card, you need to net about 25% before taxes for it to be worht it to invest over paying the debt. So yeah, that is a good place to start.

Airencracken · 08-26-2005, 12:09 AM

Mayo jar buried in the back yard.

Gothic Girl · 08-26-2005, 01:02 AM

My debt is only a few thousand and we are already paying that, and will be done paying it next week.

zippyjuan · 08-26-2005, 01:19 AM

Dividend paying utilities look pretty good and relatively safe.

smeakim · 08-26-2005, 07:51 AM

The deal with a financial advisor is that most will give you a free evaluation and then to get more into the details they will charge you. You must be aware any advisor can and will only sell you the products they have to offer. They also either get paid by taking a percent from the total portfolio value erach year kind of like mutual fund fees or they get paid a upfron cost and they make a portion on what you invest. Again anyplace you look at is only going to sell you what they are offering. All big mutual fund companies such as Fidelity or T. Rowe Price have funds that are based on the year in which you retire and they reallocate as you get older. You don't have to worry about any of them. The one thing to know is that an IRA can only de deducted up to 3000 this year I think for a married couple filing jointly maybe a little more. Also there are limits on how much you or you and your husband can make to get the deduction. You also have to consider ROTH or Traditional. ROTH money is taxed now and in most instances you take it out tax free in the future. Traditional you put the money in now and get a break on taxes each year and then you are taxed when you take it out. You have to figure if you will be in a lower tax bracket now or in the future. In most instances it is in the future becuase when you retire you have more or less no income. You can open most IRAs online, by phone, or mail. Its really easy. Take some money to put a downpayment on the house. Payoff the debt. But some away for the little one into one of those college savings plans. Take the rest and invest in a Traditional IRA in one of those "lifestyle funds." That should cover all your basis. JMHO

08-25-2005, 02:25 PM	#1
Gothic Girl Rear Admiral Lower Half Join Date: Sep 2004 Location: Somewhere else that's similar to hell... kind of... maybe Posts: 2,362	What's the best way to invest? I'm getting ready to settle a lawsuit and should be getting anywhere from $15,000 to $25000. I want to take a couple thousand out and put into savings, then invest the rest. Ultimately I'd like to use this money towards a down payment on a house. The biggest thing I need is to not be able to touch the money, or else I'd go buck wild at Hot Topic and Woot. So I was thinking a CD. But I don't know very much info about it. My husband has 2 IRAs, Traditional and Roth. Not sure which one it is, but I know that we can use the money to buy a house without any penalties. So I was thinking about just throwing all the money into there. It'd be harder for me to touch, but which option would give me a better interest rate?

08-25-2005, 02:50 PM	#2
brainsmile Chief of Naval Operations Join Date: Jun 2000 Location: woah... why is welfareloser here with me so early in the morning and more importantly why am I wearing her clothes?!? Posts: 13,754	ygpm __________________ ********************************** DCM #1 (Founder) "Nobody beats Vitus Gerulaitis 18 times in a row." - Vitus Gerulaitis on beating Jimmy Connors after 17 failed attempts.

08-25-2005, 02:58 PM	#3
ialsohaveadream Fleet Admiral Join Date: Feb 2004 Location: FL Posts: 8,077	CDs aren't giving excellent interest rates right now, so I'd avoid them. A lot of it depends on how long you want to leave the money alone to let it grow. If you plan to use it in 6 months, you shouldn't be expecting a 20% return. __________________ Web log

08-25-2005, 04:22 PM	#5
MikeD President, Cowboys Nation Join Date: Dec 2004 Location: In the 'burbs, west of D.C. Posts: 5,139	Get a financial advisor. Have him/her review ALL of your finances, not just your lawsuit $$$. They should not only help you invest it wisely, but also plan for future expenses (college, retirement, etc.). __________________

08-25-2005, 06:30 PM	#6
InfiniteNothing Chief of Naval Operations Join Date: Aug 2002 Location: San Diego Posts: 10,086	Don't get a finacial advisor. They get paid either way. Do internet research (fool.com?) and self invest (stocks? bonds?). If you have money to blow I've always wanted (I guess not wanted very bad) to try that informercial system that has green lights and red lights that tell you to buy or sell. __________________ As for our common defense, we reject as false the choice between our safety and our ideals.

08-25-2005, 03:19 PM	#4
smeakim Lieutenant Commander Join Date: Jun 2000 Location: CO Posts: 690	Well right now it depends. If you are not putting more than 20% down on house there is no reason to put the whole amount towards that. The 20% will get rid of mortgage insurance. I would figure out how much the house might cost and if the 20% is not possible leave out the 3% which is usually a min. Also don't go for the interest only or arm you will regret it in 5 years when the rates go up and you have to sell or refinance. You can get 3.3% at ING which is pretty good just incase you need the money for some reason. If you are buying a new home don't for get landscaping, window coverings, transh cans, any upgrades you might want to add like a new deck. After taking out that from the settlement plus the 3% you should pay down your debt. If you don't have any or don't want to do that, put the money into a college savings account for the little one. You can designate him as the recipent. If he doesn't go to college in the future the amount you take out is taxed at normal income plus 10%. Also if you don't want access to the money look into life insurance. You can get a policy and then deposit the difference into it. You pay a 5% fee but you earn a guaranteed amount. When I thought about it three years ago you 7.5%. You can take it out in 10 or so years earning a guaranteed amount. Also look opening an IRA foryourself and depositng the max for the year. Not only do you get the tax break but you put money away for retirement. It all just depends maybe give us some more thoughts on what you want..... JMHO

08-25-2005, 06:38 PM	#7
Cubsfan Rear Admiral Lower Half Join Date: Jul 2001 Location: Colorado Posts: 2,743	If you belong to a credit union, see if they have financial advisors. Mine has them for free.

08-25-2005, 08:27 PM	#8
Kevster Admiral Join Date: Jan 2002 Location: NorCal Posts: 6,124	ygpm. __________________ I think over again My small adventures, my fears. The small ones that seemed so big, For all the vital things I had to get and to reach. And yet there is only one great thing, the only thing: To live to see the great day that dawns, And the light that fills the world. -old Inuit song

08-26-2005, 12:05 AM	#11
zippyjuan Picture of the Day Guru Join Date: Oct 2002 Location: Sunny San Diego Posts: 8,756	If you are paying 18% on a credit card, you need to net about 25% before taxes for it to be worht it to invest over paying the debt. So yeah, that is a good place to start. __________________ I add new pictures to my photo gallery pretty regularly. You can see them here if you are interested: http://www.pbase.com/jeffryz

08-26-2005, 12:09 AM	#12
Airencracken Admiral Join Date: Jul 2003 Location: California Posts: 6,681	Mayo jar buried in the back yard. __________________ "I remember my first orgasm, I just wish someone was there to share it with me..."11-05-2003 05:33 AM - Topane They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety. - Benjamin Franklin Religion is the sigh of the oppressed creature, the heart of a heartless world, & the soul of soulless conditions. It is the opiate of the masses. - Karl Marx Hell is other people - Jean-Paul Sartre

08-26-2005, 01:02 AM	#13
Gothic Girl Rear Admiral Lower Half Join Date: Sep 2004 Location: Somewhere else that's similar to hell... kind of... maybe Posts: 2,362	My debt is only a few thousand and we are already paying that, and will be done paying it next week.

08-26-2005, 01:19 AM	#14
zippyjuan Picture of the Day Guru Join Date: Oct 2002 Location: Sunny San Diego Posts: 8,756	Dividend paying utilities look pretty good and relatively safe.

08-26-2005, 07:51 AM	#15
smeakim Lieutenant Commander Join Date: Jun 2000 Location: CO Posts: 690	The deal with a financial advisor is that most will give you a free evaluation and then to get more into the details they will charge you. You must be aware any advisor can and will only sell you the products they have to offer. They also either get paid by taking a percent from the total portfolio value erach year kind of like mutual fund fees or they get paid a upfron cost and they make a portion on what you invest. Again anyplace you look at is only going to sell you what they are offering. All big mutual fund companies such as Fidelity or T. Rowe Price have funds that are based on the year in which you retire and they reallocate as you get older. You don't have to worry about any of them. The one thing to know is that an IRA can only de deducted up to 3000 this year I think for a married couple filing jointly maybe a little more. Also there are limits on how much you or you and your husband can make to get the deduction. You also have to consider ROTH or Traditional. ROTH money is taxed now and in most instances you take it out tax free in the future. Traditional you put the money in now and get a break on taxes each year and then you are taxed when you take it out. You have to figure if you will be in a lower tax bracket now or in the future. In most instances it is in the future becuase when you retire you have more or less no income. You can open most IRAs online, by phone, or mail. Its really easy. Take some money to put a downpayment on the house. Payoff the debt. But some away for the little one into one of those college savings plans. Take the rest and invest in a Traditional IRA in one of those "lifestyle funds." That should cover all your basis. JMHO

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