What would you do with $10,000

[PooohBear]

My friend called me up and said she was left a bit of money and doesn't know what she should do with it, she has no credit cards or car payments, so how would this money be best invested ?? I have receieved the best information from people on these boards, so I told her I would see what everyone says !
TIA !!!!

 

[LIFERBABE]

gift and that's what we used to purchase our DVC.

Not an investment per say, but an investment in our family and Im glad we made that decision!

 

[pearlieq]

Take a $300 or so to spend on a nice night out, then max out her IRA contribution for the year. After that, put the rest in an emergency fund if she doesn't already have an adequate one.

If she is already holding an emergency fund of 6 months expenses, she could contribute it to her spouse's IRA or college funds for her kids. If neither of those apply, she could open a taxable investment account with a broker (i.e. Vanguard, Schwab, etc.) and buy some mutual funds.

I know, not too exciting, but fiscally responsible!

 

[Ardenne]

Setting aside a small amount for a treat sounds like a good idea -- though I personally probably couldn't stand splurging more than $50 or so of it!

Does she have an IRA? If so, I'd suggest maxing out her contribution for the year first of all -- and if not, open one, and max it out. If she has a husband, max it out for both of them. Each person can contribute $4000 this year, or $4500 if they're 50 or more.

Then I'd stash the rest in a short term CD or interest bearing account, so it's ready to max out next year's contribution Next year's limits are $4000 if under 50, but $5000 for those age 50 or more. Or, if she doesn't have an emergency fund set aside already, stash it in an interest-bearing account to stay available as an emergency fund.

Once all that's taken care of, if there's still money left I'd invest it in a good no-load, low-fee index fund. Not exciting, but a highly practical way to invest for the long term!

 

[dvcgirl]

In that situation, I'd max out the IRA for the year (4,000) another 4,000 in a 1 year CD where you can earn 4-5% for the year and then fund the IRA for next year. The other 2K I'd stick in a money market account as a small cash emergency fund.

 

[ducklite]

In that situation, I'd max out the IRA for the year (4,000) another 4,000 in a 1 year CD where you can earn 4-5% for the year and then fund the IRA for next year. The other 2K I'd stick in a money market account as a small cash emergency fund.

That's pretty much what I would do. I'd max out our IRA's, and use the rest for some landscaping I want to do.

Anne

 

[patsal]

Max an IRA, Money market or CD for the rest for one year--Max out an IRA for the next year. Keep $2000 and add to it to hopefully max an IRA for the third year.

 

[lmhall2000]

Oooh..fun! Here is what I would do...

I'd divy it up like I look at how I like to live life.....


20% goes into savings (IRA maxing is best bet) a penny saved is a penny earned.

20% goes into FUN Life is like a box of chocolates..you gotta eat 'em not stare at 'em!!! That 20% fun can not go towards a new air conditioner or something for the house...if landscaping is her hobby (boy it's one of mine!) then let that do the trick...or if she's always wanted to see a certain place in the world then go!

20% goes to fixing up something around the house."cleanliness is next to Godliness" yeah, I know that's that's a stretch but..protecting that investment is good too...maybe a fresh coat of paint...or an upgraded dishwasher...

20% goes into her checking account to have savings for a rainy day.."a fool and his money are soon parted." they say you should always have 6 months bills funds in your checking account, this might help her get there...it'll help cover all those unplanned happenings that come up.

And now the fun...20% for GIVING!!! "It is better to give than to receive" Set up a special checking account for this fund...whenever you see a need (family's house burned down, little boy needs new coat, lady's husband died young and left her with three children, etc.) Then use that checking account to anonymously give to those who present the need. That kind of generosity is hard to find and will give so much more joy in the long run..plus it breeds generosity...a commodity that's harder to measure than an IRA's growth.

That's how I'd spend it!

ENJOY!
Tara

 

[RichNKatHolly]

Just a note about putting the money in her DH's IRA. Inheritances are not considered marital property. I know we all love our spouses, but in the event something should happen.... you know. Putting her inheritance in an account that doesn't have her name on it would make me nervous. Joint accounts would be fine, but maxing his IRA would be giving him the $$.

She could max our her IRA and then put some more into other investments. Sorry, I'm not good with savings so can't give advice on what type, but just wanted to maybe give your friend something to think about with the maxing out DH's IRA as well.

 

[kilee]

I would save 1/2 and enjoy 1/2. Either take a trip, remodel a room, buy new furniture. I don't know my mom's a bank manager and she tells me all the time about people who have 100's of thousands in the bank and don't leave a will and no family. The state gets the money.

I agree w/ saving for the future and a rainy day-- but you can die tomorrow. That being said I would at least have some fun w/ it. We did just that when DH had gotten an accident settlement a few years ago. We broke it into 3rds. 1/3 was for bills, 1/3 was for the future, the other 3rd paid for an extravagant trip we couldn't have otherwise and completely redid 2 rooms in our house.

 

[PatriciaH]

I would put a down payment on another property and then rent it out

 

[holden]

I would save it/invest it for DD's college education (someday...).

 

[PooohBear]

Thanks everyone !!! some really great advice to pass on !!!

 

[LoriMistress]

I would put that into savings for a down payment on a house.

 

[LilMamiBella]

If I had 10,000 to spend I would probably pay off my dvc! Or at least 5,000 on it..lol
Put the rest of the money towards a disney trip.

 

[imsayin]

Just a note about putting the money in her DH's IRA. Inheritances are not considered marital property. I know we all love our spouses, but in the event something should happen.... you know. Putting her inheritance in an account that doesn't have her name on it would make me nervous. Joint accounts would be fine, but maxing his IRA would be giving him the $$.

DH just got an inheritance, and we never even thought about this. In our house, it is considered marital property. If it were my $10,000, I would gladly give DH some of it. If you can't give your own spouse a few thousand, you have some issues, JMO.

 

[adamandallie]

I would buy more DVC points.

 

[luvmarypoppins]

We would invest it in a tax free municipal fund. You dont lose the principal and get a tax free income. Example, at 4% you would get a $400 tax free check for the year. Use that money any way you wish.

 

[PatsGirl]

I'd make one awesome memory -- the trip of a lifetime! Can you tell I like to travel? Maybe Hawaii for two or three weeks or Europe or a lengthy cruise to see lots of places. Things are lost, stolen, ruined, or not appreciated -- memories you can have forever.

Of course, maybe a thousand or two to pay off the existing "minor" bills so there's no guilt when you get home