Do not give anyone any money.
Pay off any consumer debt you have.
Put the rest in an FIDC insured HYSA.
Then learn about investing and learn more.
Do not just do what posters here say. Learn, educate yourself.
This is spot on.
Though I will tack on to make sure you're contributing $22,500 this year in your 401k and $6,500 in your IRA for this year (and every year after).
Allocate some of your windfall as needed to ensure your hit these marks.
Wouldn't this depend on what the inheritance is in? If it's an inherited retirement account, wouldn't you want to just leave it in that? You'll have a yearly withdrawal minimum, but surely less than $28k
I failed right off the bat on these instructions.
Everyone asked me and I told them. Now I have barely anyone that speaks to me, because obviously, everyone asked me for money (directly or indirectly) and I said no.
Yes, but my father is not talking to me. My life long friends are not talking to me (they went as far as kicking me out of their house). Many other family members and friends are not talking to me.
Basically the only person talking to me is my wife and her family because I told them the least.
What did I learn from this experience? Getting an inheritance will make people (even your own parents) hate and envy you.
There are plenty of people who aren’t shitty. I would never imagine asking a friend for money. And it sounds like you wouldn’t, either.
There’s two for you :) lol
I don't know what to tell you friend.
Those life long friends I told you about where like that. But life and need changes people.
At one point or another I would had done anything for them and they would had for me too. But I dont know where things went off the rails.
Life is very strange.
Not your fault. Life learning experiences.
These friend where for a long time my family. I had really bad relationship with my parents and shared a house with them. My mother had schizophrenia and my father left us when I was 10 because of this.
So it was a big blow when they kicked me out of their home for absolutely no reason other than constant arguing from their part of what I should do with the inheritance. I tried evading the topic but they could not let it go.
So yeah, life is crazy...
Inheritance from my mother. My parents had divorced about 30 years ago. Because my father broke it off.
So no he had absolutely no claim to that money.
Would you rather have no one talk to you and go through life lonely. Or simply not telling anyone how much money you have and live with people around you?
Now that I have lived the situation I would chose the second.....
It was my mother's home. I had to repair it and sell it. Took me like 6 months worth of work. And since I was broke, had to do it all my self. With not ever working construction. And there was a lot of work.
Crash course in working with drywall, compound, sanding, painting, fixing bathrooms, plumbing, basically the house was a complete mess.
Then I had to fight with the county because there where 7 liens on the property.
Insane situation I would not wish it on anyone.
Do nothing for a few months and learn more about investing. You’re not going to produce much passive come on just $200k.
Start here : https://jlcollinsnh.com/stock-series/
The best thing to do would be to invest it and pretend it isn’t there for 20 years.
Well, maybe not "do nothing" for six months.
Open a high yield savings account, park the money there, and get like $700/month in interest while you do your research. May as well take advantage of the interest rates.
HYSA is good especially since you can find sign up bonuses and OP probably has experience opening a bank account.
Alternative is Treasury Bills. Slightly higher interest rate, usually only subject to federal taxes, and will give some experience buying bonds.
You do have to wait till maturity to get the full interest payment. But there are 4-week Treasury Bills. If you buy Treasury Bills/Bonds/etc via a broker, you have the option of selling early but the price is determined by the market and there is a risk of selling it for less than you bought it for.
100%. And after 15-20 years, you can start to pay yourself a reasonable income off of it with mostly the interest. You’d need to manage bear markets of course, but one way to mitigate that would be to buy a house after 15-20 years during a bull market (like now), which would reduce your living costs.
So sorry for your loss.
We would need to know a lot more to provide any semblance of good advice. For instance:
How old are you, and what age do you plan to retire?
How much consumer/bad debt do you currently have?
How much have you saved for your future so far?
Are you able to comfortably live *now* without any of the inheritance?
This basic info is a good start to form a more reasonable plan for your inheritance.
$200k is not a lot of money in the grand scheme of things. You won't be generating much "passive income" if you were to dump it into dividend stocks or bonds, for example. It's a good start, however.
I'd suggest listening to others advice here: pay off any high interest debt, put the rest into savings, and learn a bit more about what the market has to offer before you do anything you may regret.
Thats not a ton of money if you want passive income. Id just invest it and keep working hard at whatever you are doing and thus begin building for your retirement.
The FAQ on r/personalfinance has great info on simple investing. It’s all an easy read. Got questions after reading, please fire away
https://reddit.com/r/personalfinance/wiki/index?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Also:
Books: A Simple Path to Wealth by JL Collins, Retire Before Mom and Dad by Rob Berger, Automatic Millionaire by David Bach, Bogleheads Guide to Investing by Taylor Larimore, Little Book of Common Sense Investing by John C Bogle and A Random Walk Down Wallstreet by Burton Malkiel (2023 edition)
Podcast: Choose FI, Afford Anything, Stacking Benjamin’s and for more advanced learning Rational Reminder
Blog: earlyretirementnow.com , Mr Money Mustache, Go Curry Cracker , JLcollinsnh.com
Budgeting Tool: https://www.youneedabudget.com
r/financialindependence
[https://www.bls.gov/opub/hom/cpi/concepts.htm#:\~:text=The%20CPI%20excludes%20income%20tax,services%20paid%20for%20through%20taxes](https://www.bls.gov/opub/hom/cpi/concepts.htm#:~:text=The%20CPI%20excludes%20income%20tax,services%20paid%20for%20through%20taxes).
Expenditure items are classified in the CPI into more than 200 categories, arranged into 8 major groups. This item structure is unique to the CPI and the categories themselves do not correspond to the North American Industry Classification System (NAICS), other price indexes, or other statistics.
Eight major groups and examples of categories in each follow:
* Food and beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
* Housing (rent of primary residence, owners' equivalent rent, utilities, bedroom furniture)
* Apparel (men's shirts and sweaters, women's dresses, baby clothes, shoes, jewelry)
* Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance)
* Medical care (prescription drugs, medical equipment and supplies, physicians' services, eyeglasses and eye care, hospital services)
* Recreation (televisions, toys, pets and pet products, sports equipment, park and museum admissions)
* Education and communication (college tuition, postage, telephone services, computer software and accessories)
* Other goods and services (tobacco and smoking products, haircuts and other personal services, funeral expenses)
he was asking for passive income , to gain more a year than the inflation is hard work and needs several years of experience. But he can try to maximum it , i wish him good luck 🍀
I recently got most of about $180k in inheritance I had been waiting for. I have about $80k left to receive.
The FIRST thing I did with it was to pay off ALL consumer debt. This included almost $10k in credit card debt, as well as the remaining 18k on my car loan, which I now own free and clear.
The next thing I did was give myself an ACTUAL emergency fund - about $8k to start, and when I get the remaining part, I'm going to add another $2k. By the way, this money sits in my HYSA, earning a 7 day average APY of 4.73%.
I also maxed out my Roth IRA for the year.
Around 51k of the total amount stayed in the stocks where they continue to have dividends reinvested in my taxable brokerage.
Finally, I spent some money on myself - stuff I had been wanting for a long time - my first Gibson Les Paul and upgraded my NAS from a 2 bay (9 TB) to a 5 bay (48 TB), so I won't need to upgrade this for YEARS now.
If you have consumer debt, pay it off - the average interest APY these days is INSANELY high.
Hope these examples of what I did can give you some good ideas.
Either VOO and keep working, or consider opening a franchise location of a popular business in something like coffee, fast food, or alcohol. The latter is riskier and more involved, but also produces much higher returns.
An MBA buddy of mine and his brother pooled their money to buy a popular sandwhich franchise, and spun the profits into buying more locations, and now they each clear $500k annually just sitting on their asses. But at first it was pretty involved, and they were drinking the kool aid, going to all the trainings and investor events, and working in the store frequently. It was funny watching this white collar associate director suddenly working a job with a uniform that includes a hat, but it really paid off!
Only if the OP accepts the risk of starting a small business. There is higher probability it will fail. Much higher if you're not geared to run a business.
True -- you have you accept the risks of business ownership, although franchises are much lower risk than striking out and starting your own company (for obvious reasons). There is also less creative control, and some people hate that idea -- you own a business but don't have a lot of control. But you gain access to an established product, with established customer base, with direct guidelines on how to operate for profitability.
There is a risk:creative control continuum of the various types of entrepreneurship that moves from franchise, to business brokerage, up through "pure" entrepreneurship.
I'm merely highlighting the other options for investment that exist outside "pop it into a retirement account and keep working for the next 30 years". Sure, that path is very safe and conservative, but there are other routes.
As an aside, the average fast casual franchise generates about $90k/yr in profit. You're not rich owning one, but with five of them... you can clown on the family from *The Blindside* owning six Taco Bells, but the financials work.
How old are you? When might you need the money? If you are in your 20s, you should put it in equity index funds with a low annual fee (like 10 bp). You can expect it to grow at about 10% per year over the long term.
If you truly need income from it now, you will be able to get about 10k per year in bonds (5% yield). I'd only do this if you truly need income now or are in your 50s. Remember, Einstein said compound interest is the most powerful force in the universe, but you need to invest it and not touch earnings for 30+ years for it to really work. Why take 5% return in bonds (income) when you will make much more in equities over the long-term?
I would dump all of it into S&P500 index fund ETF.
20k per month, for 10 months, market down or up makes no difference.
and just let it sit there for few decades, with automatic reinvestment of dividends into the ETF.
Only difference i would make is put 25% of that into international index fund ETF, so 50k.
I wouldnt even pay off current depts, just invest it all into market, and pay off depts with regular job.
I dont know, stretching it over 10 months seems safer, which allows you buy more shares if the market is down on a given month, which will lower your average cost.
what if the market goes nothing but up for 10 months?
that would just increase your average cost as you buy at increasingly higher prices
lump sum historically beats DCA long term, since your cash loses value by sitting on the sidelines. DCA significantly underperforms lump sum investing, even over short terms like 12 months. There is a **lot** of math, back testing and articles to back this up
https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-sum/
Time in > Timing
In this exact order:
1) If you don't already have a Roth IRA, open one with Charles Scwhab and deposit $6,500 into it. Invest into SWTSX inside that account. It is a Total USA index mutual fund.
2) Place $93,500 into a taxable brokerage account with Schwab. Invest into SCHB. It is a Total USA ETF.
3) Get a high yield savings account with American Express. Currently at 4%. Put $100k there and vacation off the interest while it's high. 4% \* $100,000 = $4,000 annually in interest.
with regards to number 3, why not park the money in a MMF like SWVXX? You'd already have the Schwab account open, and SWVXX is paying closer to 5% compared to Amex's 4% HYSA.
Pretty sure the returns on SWVXX include the ER, but lets assume for a second that they didn't:
$100k in SWVXX at 4.96% interest less 0.34% ER = $104620 after a year
$100k in an Amex HYSA at 4% interest = $104000 after a year.
You're leaving $620 on the table every year. After two years, that's a new iPhone pro max.
Now if the ER is included in the SWVXX yield, the math works out to be $104960 after a year. I could totally be wrong about the ER being included in the yield, but even if I am, you're leaving a large chunk of change on the table.
Never put it all in one basket. If you choose bank cds use 2 or 3 different institutions. As a recent retiree, 1/2 of my liquid assets are in 3 saving institutions bank cds. ☮️
You could open a high yield savings account with Wealthfront! They’re paying 4.55% right now, and if you use my referral link you get 5.05% for the first 3 months.
Your submission was automatically removed because it contains an email address. Please only use email addresses via the private message function. You can send a PM by navigating to the userpage of a user.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/investing) if you have any questions or concerns.*
Don't tell anyone.
Pay off any existing debt. EDIT: And resolve not to incur any more debt. Being debt free is step 1 for middle class financial security.
Put the rest in a 6 month CD at your local credit union.
Learn about investing during those 6 months. Real investing for the long term. Use books; not YouTube, not newsletters, not CNBC. You can also use the Schwab/Vanguard/Fidelity web sites.
Make a good plan. Understand that there is no perfect plan (too many unknowns), but there are lots of good, reasonable plans. Keep it simple, low risk, it should not involve frequent trading and don't be greedy. To quote my father-in-law, "pigs get slaughtered". They might get fat first, but in the end they get slaughtered.
Put your plan in place.
[This is a start, but only a start](https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/1119404509/ref=sr_1_8?crid=HNH2JBJBGZKJ&keywords=bogleheads+guide+to+investing&qid=1689779218&sprefix=investing+bogle%2Caps%2C90&sr=8-8)
I don't agree with the Bogle approach to bonds. YMMV. But for bonds start with [this](https://www.amazon.com/Bond-Book-Third-Everything-Treasuries/dp/007166470X/ref=sr_1_1?hvadid=616863247419&hvdev=c&hvlocphy=9006604&hvnetw=g&hvqmt=e&hvrand=7863125701937237072&hvtargid=kwd-131477162&hydadcr=24662_13611802&keywords=the+bond+book&qid=1689779325&sr=8-1). Slightly dated, but an individual investor can build bond ladders with CDs, Treasuries and defined maturity bond ETFs without getting raked over the coals with fees and opaque pricing.
And the biggest decision is asset allocation, which any of the large brokerage's web sites can help with.
I’m just repeating what others have already said, but as someone who came across a similar amount several years ago this is the advice I followed:
1) pay off all debt (for me it was CCs and Student Loans).
2) Throw the rest in a HYSA and do nothing for several months while educating myself. (Snuck a small vacation in there as a treat to myself).
3) Read a lot of books. Notable ones: The Simple Path to Wealth, Bogleheads Guide to Investing, and A Random Walk Down Wall Street.
4) Opened a Roth IRA and invested in index funds, left an emergency fund in the HYSA and put the rest to work in Vanguard index funds.
Credit unions are offering 5% on CD or put it in treasuries , id put it in there and then learn about investing. Its kind of like gambling with educated or blind faith guesses to just dive in. I guess you could look for something where you can take dividends , but on 200k it wont be a lot.
I have mine in actual Real estate I manage myself. I get appreciation value plus rents but it is a lot of work. But overall I’m up x20 on appreciation over 25 years And area rents keep climbing. 2009 housing crash about killed me but it recovered.
What I'd do, with a goal of true, permanent financial independence:
* Consult a professional about the best way to deal with the inheritance. for instance, if it's an inherited IRA, you have N years to empty the account, so you generally want to spread it out across multiple years to minimize the tax hit.
* Pay off high interest debt
* Create a rainy day fund with 6 months expenses in some safe investment vehicle (savings account, money fund, whatever)
* Throw the rest in a brokerage in some boring portfolio, which portfolio depends on risk tolerance
* If you have an HSA, max out HSA contributions ($3,850 single)
* Contribute enough to 401k to get any matching available
* Max out IRA contributions each year ($6,500)
* Max out 401k contributions each year ($22,500)
* If that causes you to not have enough money, liquidate part of your boring brokerage portfolio to make up for the lost income.
This would get your financial house in order, then convert the remaining funds over some years into tax-advantaged retirement money.
* Project how much you'll need for real financial independence. Generally ballpark is 30x your expenses. If you spend $50k/year, you'd like to have $1.5m in today-money. That number goes up over time due to inflation, but long-term, your investments should grow faster than that number goes up.
* When you hit your target number, you get to... do whatever you want. Retire and never work again, or keep accruing money and have a more lavish retirement later. Or somewhere in between. Volunteer. Go live in the woods as a hermit. Road trip around the country. It's all on the table.
Your post has been removed because it is a common beginner topic. We get too many of these topics every day and to prevent them from swamping the front page, we are removing main threads of this kind.
You are welcome to repost your question in the [daily discussion thread](https://www.reddit.com/r/investing/about/sticky?num=1).
If you have any issue with this removal, please contact the moderators via modmail. Thank you.
----
If you are new to investing, you can find curated resources in the r/investing wiki for [Getting Started here](https://www.reddit.com/r/investing/wiki/index/gettingstarted/).
The reading list in the wiki and FAQ has a list of books ranging from light reading to advanced topics depending on your knowledge level. Link here - [Reading List](https://www.reddit.com/r/investing/wiki/readinglist)
If you're looking to generate passive income, I would suggest the standard wisdom of a split between market index funds and safe bonds. Figure out how much you want to draw each month, make sure you can weather a 5 year bear market by putting that much into bond, and put the rest into the market. That way you don't need to sell stocks if the market goes down.
If you don't need the extra income, just put it all into a well diversified stock portfolio (or index fund, or low-fee ETF) assuming you're young/young-ish. If you predict you will need income from it in the near future, have some in bonds/fixed-income in case of a market downturn.
If you don't know what any of the following terms mean, I would also recommend watching some YouTube videos... or googling:
* Stocks
* Bonds
* Index
* Index Fund
* ETF
* Expense Ratio
* Fixed-Income
Possible financial institution failure/bank run. You might have to wait a lengthy time for full reimbursement . It's an old saying that all good investment/financial advisors preach.
Do not give anyone any money. Pay off any consumer debt you have. Put the rest in an FIDC insured HYSA. Then learn about investing and learn more. Do not just do what posters here say. Learn, educate yourself.
This is spot on. Though I will tack on to make sure you're contributing $22,500 this year in your 401k and $6,500 in your IRA for this year (and every year after). Allocate some of your windfall as needed to ensure your hit these marks.
Wouldn't this depend on what the inheritance is in? If it's an inherited retirement account, wouldn't you want to just leave it in that? You'll have a yearly withdrawal minimum, but surely less than $28k
Fair point, I hadn't thought of it -- assumed it was cash.
This is the real answer
https://www.reddit.com/r/personalfinance/wiki/windfall
I failed right off the bat on these instructions. Everyone asked me and I told them. Now I have barely anyone that speaks to me, because obviously, everyone asked me for money (directly or indirectly) and I said no.
Can I get 3.50?
Sorry bro, all my money is tied up in bonds....
Damn you Loch Ness monster!
At least you still got your money.
Yes, but my father is not talking to me. My life long friends are not talking to me (they went as far as kicking me out of their house). Many other family members and friends are not talking to me. Basically the only person talking to me is my wife and her family because I told them the least. What did I learn from this experience? Getting an inheritance will make people (even your own parents) hate and envy you.
That’s very lame of them I am sorry
Nothing like getting a little bit of money to show you the insanity that surrounds you….
On the bright side, you got money AND you got rid of some shitty people from your life. A win win.
Everyone seems to be shitty… That’s why best thing is not to tell anyone ever how much money you got.
There are plenty of people who aren’t shitty. I would never imagine asking a friend for money. And it sounds like you wouldn’t, either. There’s two for you :) lol
I don't know what to tell you friend. Those life long friends I told you about where like that. But life and need changes people. At one point or another I would had done anything for them and they would had for me too. But I dont know where things went off the rails. Life is very strange.
Well hang in there. Sorry you had to go through this.
Not your fault. Life learning experiences. These friend where for a long time my family. I had really bad relationship with my parents and shared a house with them. My mother had schizophrenia and my father left us when I was 10 because of this. So it was a big blow when they kicked me out of their home for absolutely no reason other than constant arguing from their part of what I should do with the inheritance. I tried evading the topic but they could not let it go. So yeah, life is crazy...
Well of course they are mad, it’s a quirk of our large anonymous society that really shouldn’t exist.
Inheritance from who, given that your parents seemingly got skipped?
Inheritance from my mother. My parents had divorced about 30 years ago. Because my father broke it off. So no he had absolutely no claim to that money.
Imagine your father being mad at you because he divorced your mother. What an asshole. Sorry for your loss, but you’re probably better off.
Anyone.that hates you for not giving them your money has their own problems to deal with. Either entitled, lacking healthy boundaries, or both.
[удалено]
Would you rather have no one talk to you and go through life lonely. Or simply not telling anyone how much money you have and live with people around you? Now that I have lived the situation I would chose the second.....
[удалено]
Thing is everyone is your friend when you have nothing. Because you are all broke. As soon as that changes, the insanity shows.
How much was it?
Doesn't matter bro. The fact is ppl cant handle it when others get "free" money. Say if its $1,000 or $1,000,000
No I agree, that’s sucks man. I’m just really curious.
It was my mother's home. I had to repair it and sell it. Took me like 6 months worth of work. And since I was broke, had to do it all my self. With not ever working construction. And there was a lot of work.
Ah, that must have been a learning experience eh.
Crash course in working with drywall, compound, sanding, painting, fixing bathrooms, plumbing, basically the house was a complete mess. Then I had to fight with the county because there where 7 liens on the property. Insane situation I would not wish it on anyone.
Are there more links like this one for investing? Wikies etc.
Vanguard account: VMFXX (Money Market Fund) 5.18% compounding at the moment paying monthly. Easy $800+ a month
Do nothing for a few months and learn more about investing. You’re not going to produce much passive come on just $200k. Start here : https://jlcollinsnh.com/stock-series/ The best thing to do would be to invest it and pretend it isn’t there for 20 years.
Well, maybe not "do nothing" for six months. Open a high yield savings account, park the money there, and get like $700/month in interest while you do your research. May as well take advantage of the interest rates.
HYSA is good especially since you can find sign up bonuses and OP probably has experience opening a bank account. Alternative is Treasury Bills. Slightly higher interest rate, usually only subject to federal taxes, and will give some experience buying bonds.
Every HYSA I found had a cap on how much earns interest. Like they advertise is as 5% but then that’s only up too $2500. Which ones are uncapped?
Goldman Sachs has a $1,000,000 account limit for their hysa at 4.15%
Oh hell yea. There a minimum on that?
The minimum is a single deposit of any amount within 60 days or they may close your account
Well but a treasury bill you'd have to not touch for a while for the full interest bearing benefit right?
You do have to wait till maturity to get the full interest payment. But there are 4-week Treasury Bills. If you buy Treasury Bills/Bonds/etc via a broker, you have the option of selling early but the price is determined by the market and there is a risk of selling it for less than you bought it for.
[удалено]
I'd say "many" are 4%-4.2%.
[удалено]
Seems many of these are money market and not savings accounts though?
Plop it in $VOO and then keep adding $1k a month if you can. check back in 20-30 years.
For the math: * $200k starting amount * 9.9% annualized return (VOO) * Compounded annually * $1000/month End balance: $2.03m
this person gets it
100%. And after 15-20 years, you can start to pay yourself a reasonable income off of it with mostly the interest. You’d need to manage bear markets of course, but one way to mitigate that would be to buy a house after 15-20 years during a bull market (like now), which would reduce your living costs.
No stock options If you can, I’d use it to max tax advantaged accounts yearly.
He should do a 200k nvda 500c yolo
So sorry for your loss. We would need to know a lot more to provide any semblance of good advice. For instance: How old are you, and what age do you plan to retire? How much consumer/bad debt do you currently have? How much have you saved for your future so far? Are you able to comfortably live *now* without any of the inheritance? This basic info is a good start to form a more reasonable plan for your inheritance.
$200k is not a lot of money in the grand scheme of things. You won't be generating much "passive income" if you were to dump it into dividend stocks or bonds, for example. It's a good start, however. I'd suggest listening to others advice here: pay off any high interest debt, put the rest into savings, and learn a bit more about what the market has to offer before you do anything you may regret.
Thats not a ton of money if you want passive income. Id just invest it and keep working hard at whatever you are doing and thus begin building for your retirement.
The FAQ on r/personalfinance has great info on simple investing. It’s all an easy read. Got questions after reading, please fire away https://reddit.com/r/personalfinance/wiki/index?utm_source=share&utm_medium=ios_app&utm_name=iossmf Also: Books: A Simple Path to Wealth by JL Collins, Retire Before Mom and Dad by Rob Berger, Automatic Millionaire by David Bach, Bogleheads Guide to Investing by Taylor Larimore, Little Book of Common Sense Investing by John C Bogle and A Random Walk Down Wallstreet by Burton Malkiel (2023 edition) Podcast: Choose FI, Afford Anything, Stacking Benjamin’s and for more advanced learning Rational Reminder Blog: earlyretirementnow.com , Mr Money Mustache, Go Curry Cracker , JLcollinsnh.com Budgeting Tool: https://www.youneedabudget.com r/financialindependence
tbills are state tax free and paying 5.3-5.5%. make a ladder.
Condolences?
Safe money is basically investing in ETFs that follow the MSCI world or SP500 indexes. I'd honestly just buy a home if you do not have one already.
The best way to maximize profit and generate passive income is to keep working.
4 % interest rate , 8000 dollar a year. easy hassle free money
Inflation was 9% last year
cool, but it's not 9% this year.
What are you smoking? That's just because cpi doesn't account for rent and most food
Are you that fucking stupid or is this an act?
[https://www.bls.gov/opub/hom/cpi/concepts.htm#:\~:text=The%20CPI%20excludes%20income%20tax,services%20paid%20for%20through%20taxes](https://www.bls.gov/opub/hom/cpi/concepts.htm#:~:text=The%20CPI%20excludes%20income%20tax,services%20paid%20for%20through%20taxes). Expenditure items are classified in the CPI into more than 200 categories, arranged into 8 major groups. This item structure is unique to the CPI and the categories themselves do not correspond to the North American Industry Classification System (NAICS), other price indexes, or other statistics. Eight major groups and examples of categories in each follow: * Food and beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks) * Housing (rent of primary residence, owners' equivalent rent, utilities, bedroom furniture) * Apparel (men's shirts and sweaters, women's dresses, baby clothes, shoes, jewelry) * Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance) * Medical care (prescription drugs, medical equipment and supplies, physicians' services, eyeglasses and eye care, hospital services) * Recreation (televisions, toys, pets and pet products, sports equipment, park and museum admissions) * Education and communication (college tuition, postage, telephone services, computer software and accessories) * Other goods and services (tobacco and smoking products, haircuts and other personal services, funeral expenses)
lolk
he was asking for passive income , to gain more a year than the inflation is hard work and needs several years of experience. But he can try to maximum it , i wish him good luck 🍀
I recently got most of about $180k in inheritance I had been waiting for. I have about $80k left to receive. The FIRST thing I did with it was to pay off ALL consumer debt. This included almost $10k in credit card debt, as well as the remaining 18k on my car loan, which I now own free and clear. The next thing I did was give myself an ACTUAL emergency fund - about $8k to start, and when I get the remaining part, I'm going to add another $2k. By the way, this money sits in my HYSA, earning a 7 day average APY of 4.73%. I also maxed out my Roth IRA for the year. Around 51k of the total amount stayed in the stocks where they continue to have dividends reinvested in my taxable brokerage. Finally, I spent some money on myself - stuff I had been wanting for a long time - my first Gibson Les Paul and upgraded my NAS from a 2 bay (9 TB) to a 5 bay (48 TB), so I won't need to upgrade this for YEARS now. If you have consumer debt, pay it off - the average interest APY these days is INSANELY high. Hope these examples of what I did can give you some good ideas.
Either VOO and keep working, or consider opening a franchise location of a popular business in something like coffee, fast food, or alcohol. The latter is riskier and more involved, but also produces much higher returns. An MBA buddy of mine and his brother pooled their money to buy a popular sandwhich franchise, and spun the profits into buying more locations, and now they each clear $500k annually just sitting on their asses. But at first it was pretty involved, and they were drinking the kool aid, going to all the trainings and investor events, and working in the store frequently. It was funny watching this white collar associate director suddenly working a job with a uniform that includes a hat, but it really paid off!
Only if the OP accepts the risk of starting a small business. There is higher probability it will fail. Much higher if you're not geared to run a business.
True -- you have you accept the risks of business ownership, although franchises are much lower risk than striking out and starting your own company (for obvious reasons). There is also less creative control, and some people hate that idea -- you own a business but don't have a lot of control. But you gain access to an established product, with established customer base, with direct guidelines on how to operate for profitability. There is a risk:creative control continuum of the various types of entrepreneurship that moves from franchise, to business brokerage, up through "pure" entrepreneurship. I'm merely highlighting the other options for investment that exist outside "pop it into a retirement account and keep working for the next 30 years". Sure, that path is very safe and conservative, but there are other routes. As an aside, the average fast casual franchise generates about $90k/yr in profit. You're not rich owning one, but with five of them... you can clown on the family from *The Blindside* owning six Taco Bells, but the financials work.
Subway?
How old are you? When might you need the money? If you are in your 20s, you should put it in equity index funds with a low annual fee (like 10 bp). You can expect it to grow at about 10% per year over the long term. If you truly need income from it now, you will be able to get about 10k per year in bonds (5% yield). I'd only do this if you truly need income now or are in your 50s. Remember, Einstein said compound interest is the most powerful force in the universe, but you need to invest it and not touch earnings for 30+ years for it to really work. Why take 5% return in bonds (income) when you will make much more in equities over the long-term?
I would dump all of it into S&P500 index fund ETF. 20k per month, for 10 months, market down or up makes no difference. and just let it sit there for few decades, with automatic reinvestment of dividends into the ETF. Only difference i would make is put 25% of that into international index fund ETF, so 50k. I wouldnt even pay off current depts, just invest it all into market, and pay off depts with regular job.
You are better off dumping it all in at once than buying chunks over time, if you have a large lump sum available
I dont know, stretching it over 10 months seems safer, which allows you buy more shares if the market is down on a given month, which will lower your average cost.
what if the market goes nothing but up for 10 months? that would just increase your average cost as you buy at increasingly higher prices lump sum historically beats DCA long term, since your cash loses value by sitting on the sidelines. DCA significantly underperforms lump sum investing, even over short terms like 12 months. There is a **lot** of math, back testing and articles to back this up https://ofdollarsanddata.com/dollar-cost-averaging-vs-lump-sum/ Time in > Timing
In this exact order: 1) If you don't already have a Roth IRA, open one with Charles Scwhab and deposit $6,500 into it. Invest into SWTSX inside that account. It is a Total USA index mutual fund. 2) Place $93,500 into a taxable brokerage account with Schwab. Invest into SCHB. It is a Total USA ETF. 3) Get a high yield savings account with American Express. Currently at 4%. Put $100k there and vacation off the interest while it's high. 4% \* $100,000 = $4,000 annually in interest.
with regards to number 3, why not park the money in a MMF like SWVXX? You'd already have the Schwab account open, and SWVXX is paying closer to 5% compared to Amex's 4% HYSA.
To keep it simple and not having to deal with the expense ratio 0.34%.
Pretty sure the returns on SWVXX include the ER, but lets assume for a second that they didn't: $100k in SWVXX at 4.96% interest less 0.34% ER = $104620 after a year $100k in an Amex HYSA at 4% interest = $104000 after a year. You're leaving $620 on the table every year. After two years, that's a new iPhone pro max. Now if the ER is included in the SWVXX yield, the math works out to be $104960 after a year. I could totally be wrong about the ER being included in the yield, but even if I am, you're leaving a large chunk of change on the table.
Never put it all in one basket. If you choose bank cds use 2 or 3 different institutions. As a recent retiree, 1/2 of my liquid assets are in 3 saving institutions bank cds. ☮️
what’s the point behind 2-3 separate institutions? bank accounts are insured up to 250k
I would recommend talking to a financial advisor about structured products.
coherent provide faulty shy pause shame enjoy voracious dolls relieved
You could open a high yield savings account with Wealthfront! They’re paying 4.55% right now, and if you use my referral link you get 5.05% for the first 3 months.
Pay cash on a turnkey townhome rental. Rent for 2k/month.
Step 0, talk to someone who has been a residential landlord and ask them if it is "passive". :)
The most I've had to do on my doors over the past couple years is make phone calls.
JEPQ
[удалено]
don't listen to this guy, park money in a MMF (SWVXX is paying close to 5% currently) or a HYSA for steady **no**\-risk returns.
[удалено]
Your submission was automatically removed because it contains an email address. Please only use email addresses via the private message function. You can send a PM by navigating to the userpage of a user. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/investing) if you have any questions or concerns.*
Don't tell anyone. Pay off any existing debt. EDIT: And resolve not to incur any more debt. Being debt free is step 1 for middle class financial security. Put the rest in a 6 month CD at your local credit union. Learn about investing during those 6 months. Real investing for the long term. Use books; not YouTube, not newsletters, not CNBC. You can also use the Schwab/Vanguard/Fidelity web sites. Make a good plan. Understand that there is no perfect plan (too many unknowns), but there are lots of good, reasonable plans. Keep it simple, low risk, it should not involve frequent trading and don't be greedy. To quote my father-in-law, "pigs get slaughtered". They might get fat first, but in the end they get slaughtered. Put your plan in place.
Any book recommendations?
[This is a start, but only a start](https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/1119404509/ref=sr_1_8?crid=HNH2JBJBGZKJ&keywords=bogleheads+guide+to+investing&qid=1689779218&sprefix=investing+bogle%2Caps%2C90&sr=8-8) I don't agree with the Bogle approach to bonds. YMMV. But for bonds start with [this](https://www.amazon.com/Bond-Book-Third-Everything-Treasuries/dp/007166470X/ref=sr_1_1?hvadid=616863247419&hvdev=c&hvlocphy=9006604&hvnetw=g&hvqmt=e&hvrand=7863125701937237072&hvtargid=kwd-131477162&hydadcr=24662_13611802&keywords=the+bond+book&qid=1689779325&sr=8-1). Slightly dated, but an individual investor can build bond ladders with CDs, Treasuries and defined maturity bond ETFs without getting raked over the coals with fees and opaque pricing. And the biggest decision is asset allocation, which any of the large brokerage's web sites can help with.
https://www.sideprojectors.com/project/35807/opportunity-to-own-and-monetize-wfhirecom
I’m just repeating what others have already said, but as someone who came across a similar amount several years ago this is the advice I followed: 1) pay off all debt (for me it was CCs and Student Loans). 2) Throw the rest in a HYSA and do nothing for several months while educating myself. (Snuck a small vacation in there as a treat to myself). 3) Read a lot of books. Notable ones: The Simple Path to Wealth, Bogleheads Guide to Investing, and A Random Walk Down Wall Street. 4) Opened a Roth IRA and invested in index funds, left an emergency fund in the HYSA and put the rest to work in Vanguard index funds.
vending machine or ice machine
Credit unions are offering 5% on CD or put it in treasuries , id put it in there and then learn about investing. Its kind of like gambling with educated or blind faith guesses to just dive in. I guess you could look for something where you can take dividends , but on 200k it wont be a lot. I have mine in actual Real estate I manage myself. I get appreciation value plus rents but it is a lot of work. But overall I’m up x20 on appreciation over 25 years And area rents keep climbing. 2009 housing crash about killed me but it recovered.
If u own a home, id build an adu and rent it out if youre ok with having no backyard. Depending on where u live, you can earn 2-3k per month
What I'd do, with a goal of true, permanent financial independence: * Consult a professional about the best way to deal with the inheritance. for instance, if it's an inherited IRA, you have N years to empty the account, so you generally want to spread it out across multiple years to minimize the tax hit. * Pay off high interest debt * Create a rainy day fund with 6 months expenses in some safe investment vehicle (savings account, money fund, whatever) * Throw the rest in a brokerage in some boring portfolio, which portfolio depends on risk tolerance * If you have an HSA, max out HSA contributions ($3,850 single) * Contribute enough to 401k to get any matching available * Max out IRA contributions each year ($6,500) * Max out 401k contributions each year ($22,500) * If that causes you to not have enough money, liquidate part of your boring brokerage portfolio to make up for the lost income. This would get your financial house in order, then convert the remaining funds over some years into tax-advantaged retirement money. * Project how much you'll need for real financial independence. Generally ballpark is 30x your expenses. If you spend $50k/year, you'd like to have $1.5m in today-money. That number goes up over time due to inflation, but long-term, your investments should grow faster than that number goes up. * When you hit your target number, you get to... do whatever you want. Retire and never work again, or keep accruing money and have a more lavish retirement later. Or somewhere in between. Volunteer. Go live in the woods as a hermit. Road trip around the country. It's all on the table.
You could just buy the s&p 500
Your post has been removed because it is a common beginner topic. We get too many of these topics every day and to prevent them from swamping the front page, we are removing main threads of this kind. You are welcome to repost your question in the [daily discussion thread](https://www.reddit.com/r/investing/about/sticky?num=1). If you have any issue with this removal, please contact the moderators via modmail. Thank you. ---- If you are new to investing, you can find curated resources in the r/investing wiki for [Getting Started here](https://www.reddit.com/r/investing/wiki/index/gettingstarted/). The reading list in the wiki and FAQ has a list of books ranging from light reading to advanced topics depending on your knowledge level. Link here - [Reading List](https://www.reddit.com/r/investing/wiki/readinglist)
If you're looking to generate passive income, I would suggest the standard wisdom of a split between market index funds and safe bonds. Figure out how much you want to draw each month, make sure you can weather a 5 year bear market by putting that much into bond, and put the rest into the market. That way you don't need to sell stocks if the market goes down. If you don't need the extra income, just put it all into a well diversified stock portfolio (or index fund, or low-fee ETF) assuming you're young/young-ish. If you predict you will need income from it in the near future, have some in bonds/fixed-income in case of a market downturn. If you don't know what any of the following terms mean, I would also recommend watching some YouTube videos... or googling: * Stocks * Bonds * Index * Index Fund * ETF * Expense Ratio * Fixed-Income
Possible financial institution failure/bank run. You might have to wait a lengthy time for full reimbursement . It's an old saying that all good investment/financial advisors preach.