Got some extra money from settlement....what to do....

[Dave Hess]

Luckily your wife was OK and got better.

I would pay off any debt. If your daughter starts working a part time job at 18 I’d definitely open up a Roth IRA in her name and fund it to get the snowball rolling. 50% technology and the other 50% in S&P 500 ETF / mutual fund.

I opened Vanguard Roth IRAs for all my kids when they turned 18 and it got them on track to take retirement seriously. All 3 were working part time jobs and I gifted them the max contribution for the first year.

 

[ATex7239]

I will be the one in the parking lot doing donuts.

I don’t know donuts... Is she new?

 

[hemitom]

Find a few companies with a good track record of paying dividends and invest in a few of them.

 

[Dave Hess]

Find a few companies with a good track record of paying dividends and invest in a few of them.

Yep, you can find some between 5 and 11% yield.

 

[Schmoe]

That be sweet. Doubled check on the interest....it's 3%, so that's getting paid off first.

 

[Wolf359]

I would just stick it in an S&P 500 index fund (FXAIX). You can dollar cost average. You can do 7k each so 14k this year and in January you can slowly do the rest. It could be something like 1k every 2 weeks til you hit your limit. Only reason I wouldn't do it in your daughter's name is because it would probably affect the amount of financial aid she gets.

If you use this calculator, if you had invested 20k in the S&P 500 5 years ago, it'd be worth about 43k, about 40k after taxes.

S&P 500 Periodic Reinvestment Calculator, With Dividends– DQYDJ

What if you invested in the S&P 500 periodically over the years... how would your ETF or mutual fund have performed? We guess at fees and taxes too.

dqydj.com

 

[Schmoe]

Thanks for that!!!!

 

[PandaBear]

Typically for any large settlement money or lottery winning you go in the following order:

1) pay off any debt with high interest
2) set aside for rainy day fund
3) invest in low risk stuff to avoid money being inflated away
4) come up with some moderate risk way to invest incase low risk stuff is still too conservative (depends on your age)
5) treat yourself a small amount so you are able to enjoy a bit (maybe a new car, a small vacation, etc)
6) Do not gamble or let others know

For 20k I don't think you will exceed the 6 above, if you have more than 2M then you need to come up with 7) and beyond.

 

[bdcardinal]

I am not a financial advisor.

 

[Duffyjr]

Hookers and Blow

I'm guessing the price of these has gone up like everything else so I would wait until things settle down.

 

[gathermewool]

How big of a rainy day fund do you actually have? I would add to that, if you don’t have six months+ of expected expenditures saved up.

I would NOT use this to pay off a 1% car note.

 

[blupupher]

Not a bad plan.

Dave is ok. His “if you don’t listen to me your stupid and wrong” mentality gets old after awhile... His plan is really great for people who are in a bad spot or have no impulse control. You can have car note or pay a credit card off every month a still be just as well of.

Yeah, I am not a Ramsey nut, but have used some of his advice to get myself on track (I was doing pretty good on my own, but his plan laid it out better for me to get where I want to be).

He is arrogant and a jerk at times, but like I said, I have a sister and cousin that followed his plan to a "T" and it got them out of some deep debt and financial issues, a big part of it being their behavior more than money itself.

How big of a rainy day fund do you actually have? I would add to that, if you don’t have six months+ of expected expenditures saved up.

I would NOT use this to pay off a 1% car note.

Why not. Even at 1% you are still in debt and paying more money on a depreciating item.
Minimal, yes, but psychologically you know you still have debt. Getting rid of it removes that burden.
Pay it off and then take that monthly note amount and use that to build the savings.

I don’t know donuts... Is she new?

She used to go by Sparkles.
If you don't know Sparkles, then you never went...

 

[Fattylocks]

I would buy farm land in central illinois. Twenty grand should net you about two acres.

 

[Wolf359]

How big of a rainy day fund do you actually have? I would add to that, if you don’t have six months+ of expected expenditures saved up.

I would NOT use this to pay off a 1% car note.

Yeah, the S&P 500 is up 13.23% year to date. Who knows when/if it crash and if it does how far and how long. It already crashed once last year and then fully recovered and ended up for the year at 18.4% I think people were planning on sitting it out and waiting for the crash and then jumping last year after the big run up and yet here we are up 13.23%. But if OP is borrowing at 1%, no point paying that off when you can average 10%. Long term investing is less risky than short term investing.

 

[Lubener]

Let your wife do with it whatever she wants. She is the one who suffered.

 

[aquariuscsm]

First, don't tell anyone you have it. Second, put it in a savings account until your sure what to do. Don't make any big purchases in the meantime.

^^This.

 

[aquariuscsm]

I don’t know donuts... Is she new?

Hopefully she doesn't look like a doughnut haha!

 

[danez_yoda]

buy a BITOG stash to rule them ALL!!!! Every jug of supertech in your entire region.

 

[Rob_Roy]

Put some $$ in savings for rainy day and put the rest into your house. Your wife is the one that got injured - see if she has an idea for a home improvement project.

 

[Nyati]

I'd buy another Porsche.

For 20K?