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Registered
Join Date: Jul 2005
Location: southern RI USA
Posts: 1,513
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What to do with settlement awarded from accident?
I will likely be receiving a settlement in the not-too distant future, as I was struck by a car while bicycling not too long ago. I'm still not sure what the $ figure will be...but I want to make sure I do something intelligent with it.
Me: 29 75k income no cc debt under 3k on my student loans no other debt (car loans etc) enough cash in the bank across a few accounts to not worry about being jobless for a while. I do not own any property. My girlfriend and I live in a house she owns outright. She also already has an investment property of her own that we rehabbed 3 years ago. She's older than I, divorced, and not interested in getting married again. Should I open a brokerage account and stick any settlement received into that? I want to be wealthy by my 40s*. I spent much of my 20s making incredibly dumb financial mistakes, but have fixed everything (775 FICO up from god knows how awful, all cc and car loans paid off etc) and want to make sure I reach my goals... *Using the standard definition of net worth exceeding 1 mil USD = wealthy, no matter how unimpressive that figure has become. So, what should I do? Invest in mutual funds or stick the cash in a high interest account for a year, then use as DP on a multifamily investment property next fall? Please feel free to criticize, bash, or even provide helpful advice. The financial advisor for my IRAs wants to get his hands on the money.
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Sepia brown 1971 911T. |
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11-01-2007, 06:38 AM
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The Unsettler
Join Date: Dec 2002
Location: Lantanna TX
Posts: 23,885
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Found money.
You are under 30. You can find some really nice conservative investments that'll have a nice amount of time to grow into something substantial. Or since you are so young and it is found money you can get really aggressive with it for another 5-10 years and get an ever bigger return. Just remember the bigger the potential return the higher the risk that you lose it all.
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"I want my two dollars" "Goodbye and thanks for the fish" "Proud Member and Supporter of the YWL" "Brandon Won" |
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11-01-2007, 06:43 AM
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Custom User Title
Join Date: Oct 2002
Location: Miami
Posts: 4,294
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Consider a structured settlement where you receive payments from the settlement like an annuity. Its a way of deferring taxes. I don't know how big the settlement is, or know your entire financial picture, but give it a thought.
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11-01-2007, 06:46 AM
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Friend of Warren
Join Date: Oct 2000
Location: Lincoln, NE
Posts: 16,496
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No advice on how to invest. Is the settlement going to be tax free? If not then you need to make plans on how to invest to keep the taxes as low as possible.
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Kurt V No more Porsches, but a revolving number of motorcycles. |
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11-01-2007, 06:48 AM
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Evolved
Join Date: Jan 2007
Posts: 3,338
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Diversify.
Some in CD's ... maybe some mutual funds (I like foreign now!) and perhaps even some individual stocks of 'established' companies. ALWAYS have a 6 month nest egg in cash (equivalent). RE is gambling/dangerous right now. JMO
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Don't fear the reaper. |
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11-01-2007, 06:55 AM
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1979 911 SC Silver 2002 996 race car 2005 Ford Excursion |
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11-01-2007, 07:00 AM
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Join Date: Apr 2002
Posts: 30,520
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Are you striving to attain "wealth" or financial independence? IMO they are not necessarily the same and that might influence your decision. The $ amount will also come into play (i.e. can you purchase property and also invest in some other ?). I prefer to be in a position of no debt (no house payments, etc), so you might consider removing the g/f aspect "from the evaluation" in case the relationship ends. Just a few ideas off the top of my head...or
HOOKERS and BLOW  !!!
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11-01-2007, 07:02 AM
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Hell Belcho
Join Date: Sep 2006
Location: Oz
Posts: 9,250
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hookers and blow
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Saved by the buoyancy of citrus. |
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11-01-2007, 07:02 AM
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Hell Belcho
Join Date: Sep 2006
Location: Oz
Posts: 9,250
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Quote:
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Saved by the buoyancy of citrus. |
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11-01-2007, 07:03 AM
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911 user
Join Date: Sep 2001
Location: East of Eden, West of the Sun
Posts: 2,411
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Quote:
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Where once the giants walked now Mickey Mouse is king. My other car is also a Porsche. |
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11-01-2007, 07:17 AM
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Registered
Join Date: Mar 2003
Posts: 10,347
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Take a few thou for fun with the other half, and invest the rest... with that large sum going in (even if you spend 10k on a cruise for the two of you...) you won't have to worry about retirement...
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“IN MY EXPERIENCE, SUSAN, WITHIN THEIR HEADS TOO MANY HUMANS SPEND A LOT OF TIME IN THE MIDDLE OF WARS THAT HAPPENED CENTURIES AGO.” |
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11-01-2007, 07:19 AM
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911 user
Join Date: Sep 2001
Location: East of Eden, West of the Sun
Posts: 2,411
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Quote:
He bought if from me a few years later.
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Where once the giants walked now Mickey Mouse is king. My other car is also a Porsche. |
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11-01-2007, 07:21 AM
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is this thing on?
Join Date: May 2000
Location: Franklin, NJ
Posts: 2,527
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income properties are good...especially if they are able to self perpetuate themselves
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11-01-2007, 07:33 AM
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GFCC
Join Date: Apr 2002
Location: Phoenix, AZ
Posts: 1,785
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Put a down payment on a house and work on paying it off. You will always need to live somewhere.
True wealth is living debt free.
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Jeff 1976 911 Coupe w/ Euro 3.0 - Sold 1987 Carrera Coupe - Sold 1999 Carrera Cabriolet - Current |
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11-01-2007, 07:45 AM
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Location: I'm out there.
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Quote:
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My work here is nearly finished.
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11-01-2007, 07:50 AM
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Registered
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Location: southern RI USA
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Quote:
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Sepia brown 1971 911T. |
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11-01-2007, 07:53 AM
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Registered ConfUser
Join Date: Aug 2006
Location: Waterlogged
Posts: 23,568
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Can still sue with your right!
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Mike “I wouldn’t want to live under the conditions a person could get used to”. -My paternal grandmother having immigrated to America shortly before WWll. |
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11-01-2007, 08:01 AM
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Registered
Join Date: Aug 2000
Location: Palm Beach, Florida, USA
Posts: 7,713
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You should strongly consider taking your payment in the form of a structured settlement. Talk to your lawyer about it. It is a good deal for you that gives you some tax benefits that are available only when an insurer is paying a personal injury settlement.
In a structured settlement, the money you are owed goes directly into an annuity. The secret is that the insurer handles it and you don't touch the money. If you do it any other way you'll have tax consequences. The annuity carries a certain rateof interest and the proceeds are paid out in the future, either in a lump sum or in periodic payments. Here is the secret and why it makes such good sense: themoney in the annuity compunds tax free and the payments you receive are TAX FREE. That's right, both the principle and interest you receive from the annuity are tax free. If you can lock into an annuity that starts paying you a monthly benefit in 20 years, tax free, when you want to retire, you'll be well on your way to early retirement. All risk free.
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MRM 1994 Carrera Last edited by MRM; 11-01-2007 at 08:23 AM.. |
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11-01-2007, 08:18 AM
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Registered
Join Date: Jan 2006
Location: Fullerton,Ca
Posts: 5,463
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two questions
what if you and the girl split up? (you're with out shelter) what would happen if you lost your $75k job now, start planning on how to invest
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" Formerly we suffered from crime. Today we suffer from laws" (55-120) Tacitus |
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11-01-2007, 08:33 AM
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Join Date: Apr 2002
Posts: 30,520
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Quote:
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11-01-2007, 08:58 AM
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2015 
