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How to make $200k last awhile?


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I was talking to my cousin whos brother in law received $200k from an auto injury and was able to blow every last bit of it in 1 year. He bought/has nothing to show for it. No house, no land, no car, nothing.

 

My question is since $200k really isnt alot of money(nothing to smirk at mind you), and you would certainly would want to spend some of it from time to time, what are good options to do with it? Savings bonds? Its to easy to say "dont spend it". How could you make this money work for you?

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I would pay off my car, and my house that is being built right now. Those 2 things would add up to 185k. Then mod my car a bit, and buy new furniture for the house.

 

 

I know it would be better to invest, but I would do the above. It would free up 2k/month.

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I would pay off my car, and my house that is being built right now. Those 2 things would add up to 185k. Then mod my car a bit, and buy new furniture for the house.

 

 

I know it would be better to invest, but I would do the above. It would free up 2k/month.

That goes completely in the opposite direction of the posed question. You just spent all the money. The point is to make the money work for you, Oh and no gambling/investing where you run the risk of losing it.

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1. I would get out of any debt of anykind, being in debt is retarted. Then just save the rest and keep adding with monthly saving.

 

That goes completely in the opposite direction of the posed question. You just spent all the money. The point is to make the money work for you, Oh and no gambling/investing where you run the risk of losing it.

 

aparently he isn't interested in anything but investment options.

 

I agree 100% with you btw (boosted98)

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Lets say there is no debt. I can see him buying a house and he should have at least done that if nothing else. Lets say you have no debt and your house is payed off but you want to pay cash for a car. Whats the fastest way to recoupe the money spent by using the rest of the money?
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Without recommending specific assets, which won't mean much to you, getting a financial planner is the answer. Get a diversified portfolio, and wait 30 years. Make sure to get one who is very active with his investmenst, who monitors, and re-proportions the portfolio often. How much control you give the planner is up to you, but unless you are emersed in the financial world, it might be best to give him the basic rules of your investing, and let him do everything else.
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By paying for a house with cash, I would be SAVING $300,000. Total of my 30 year loan is over $460,000.

 

The money would be "working" for me, just not in the way YOU are thinking of it. Interest is a bitch.

 

Actually it is better to only pay half for the house in cash, invest rest of the cash and take the tax deduction. If you do the math it almost always comes out better that way. We're talking 10-15% more money.

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Actually it is better to only pay half for the house in cash, invest rest of the cash and take the tax deduction. If you do the math it almost always comes out better that way. We're talking 10-15% more money.

 

Depending on the situation, you are absolutely right. There are times when paying off your house is a good thing, other times not.

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Depending on the situation, you are absolutely right. There are times when paying off your house is a good thing, other times not.

 

Like I said it works out in your favor to do that most of the time, esp at our current interest rates.

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Like I said it works out in your favor to do that most of the time, esp at our current interest rates.

 

yep, I locked in at 4.875. They were 4.75 the day before we locked in, then went up to 4.875. I locked it because I am NOT a risk taker. lol Probably could have floated to get 4.75 again, but I felt better knowing i got 4.875 than risking it for a 1/8%

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I'd write "I have 200K to invest" on the back of all my business cards, win every "free" lunch from those fishbowl things sponsored by american express in columbus, then pick the guy who bothered me the least to give all the money to make it work for me.
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I agree with most everything said here. Advantages to paying off a house vs. keeping that debt and investing. With some risk you can make more with that money investing than you pay in interest on a mortgage.

 

The biggest thing I am thinking of based on the above scenario is to go find a job, paid, volunteer, whatever. When I get bored it gets expensive. As long as I stay busy I won't be out spending money. If I was off work, nothing to do all day, yeah, saving money would be a bitch.

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For sure annuity. Over the long term, since that's what you're going for you will minimize your risks while maximizing your returns. Savings bonds are crap, you won't make jack.

 

Tell me how long you want it to last and I will tell you how much you can spend each year, or tell me how much you want to be able to spend per year and I'll tell you how long it'll last. All estimates of course, but real hard numbers.

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