What would you do with half a million in savings?

I ve been trying to cut down on the hrs of work so that I can have the time to do what I enjoy.

 

I now have a 2 year old son and I can not begin to tell you how different my answer to this question would be now as compared to if you had asked me 2 years ago. In fact, it probably wouldn't any longer be MY half a mil in savings, it would be his college/trust fund. Well maybe not all of it, but you get my drift.

Basically I don't know if you are looking to start a family or even want kids, but if you see that in your future, definitely take it into consideration when making any type of financial plans. I knew I wanted my first child when I hit 30. That way I was able to live it up in my 20's BIG TIME (guitarist in a metal band, 2 albums, and TONS of shows, all melded into one whirlwind mach-speed blur of FUN), but I also didn't want to be too old so as not to be able to relate to my kids when they hit their teens.

Still, for the love of God have fun. $500,000 + being in your 20's = Drinks all around!

To be in this position and based what you've written in your responses I think you've got a good enough head on your shoulders to make the right moves.

 

If you are in your late 20's and have been intelligent enough to accumulate $500,000 in savings you should be intelligent enough to continue your education and continue to maintain your bank account, perhaps making some relatively conservative investments along the way. After you have completed your education and you have fully secured your financial future you can consider blowing some money on a Ferrari.

 

your memories will come from the things you do and the people you do them with. Not from the things you own.

Go buy the Ferrari (you can afford one), but not because "life's short", but because you can

(My attitude on this is once you're dead, it won't matter what you didn't own).

You've got a nice start. Good luck to you and have some fun

 

get the cheap one, not the 430

 

Give it a year. With half a million, you'll be able to buy ... a loaf of bread.

 

Use that money to subscribe to fchat and post this thread in the subscribed members business forum

 

put it in a box and ship it to my P.O. Box

 

Half-mil in savings in your late 20s? If you earned it, then keep doing what you've been doing assuming you're not selling drugs. Do what you want to do, not what someone else would want to do. If you inherited the money and have to ask, then you're going to be chasing someone else's tail your entire life, or until you figure things out. You're young, so you should have fun. But don't mortgage away your future for too many cheap thrills now. What seems old (late 30s and 40s) now comes at you crazily fast.

 

Why did this get moved here...moved it to the subscribed section.

 

Thats why you want to get that USD into gold, silver, canned food, guns and ammo asap

I read that Buffet's strategy starting out was to invest his $ and not take any out for 3 years. Today you have to be very careful what you invest in and be able to dump it quickly.

Also remember that end of 2010 capital gains and dividend tax goes from 15 to 20%, thats a 33% increase in tax so buy and sell as much as you can before the end of 2010 to maximize your profit

 

You could do that and then make it a super exclusive swanky party and charge everyone by the head and make a profit.

 

500k can buy a whole hell of a lot of stuff, but spending 70k on anything is a great way to dissolve it. Stick like, 400 of it in the bank with the highest interest you can find, take some time off work, explore the world.

Personally, I'd buy a old Triumph motorcycle, get my licence, buy a nice camera, and set out across North America having a blast and taking photos all the while. Try to live off as little as possible, barter photos for food. Head out to Vegas and see about meeting Peter Lik in search of a mentorship.

$500,000 is a hell of a lot of choice. Good luck!

 

Um, Have you been seeing what is happening w US banks ?

and w inflation over 10% now (not the govt BS) 2 % a year on your $ means you are really losing at least 8% a year

 

$.5MM in the bank?

Depends on how you got it.

If you are simply a Member of The Lucky Sperm Club, you better be VERY conservatine because you have no ability to replace it.

If on the other hand, you made it YOURSELF, you are likely smart/talented/motivated enought to do it again. In that case, I'd invest in the next Big Idea.

 

So I inherit $500K and I'm renting an apartment, home, whatever?

I find a house for around $150K-$175K, or one for less and remodel it.

Put some in savings and invest some and try and make another $500K+.

The F-car will come later.

 

I really dont have the time right now to spend it on watching the stock market and invest in gold. I dont wannt to risk it all when I know that the market will tank further.
Although I made money from investing in stock, I dont want to do it again until I am fully confident in finding a safe company to invest it.

I am going to start my own business meanwhile I will wait for my school to get back whether im accepted or not.

As for a car, recommend me a car that is fun, preferably a convertible.

As for a ferrari, I will wait until I find a 430 or 430 spyder around 100k.

 

True enough, I hadn't considered that. Thanks for the insight!

 

Corvettes are fun and cheap, Aston DB7 converts can be had cheap, M3s

Late this year to next summer will be best time to buy a Ferrari, prices wont get lower than the ones you find in 09-10

 

give me half, and I'll tell you what to do with your half

 

Invest it in a fixed rate tax free , and continue to go to work like the rest of us. Until the market comes back.

 

Depends on how gig your 'wavos' are. If you are a risk taker, and think we are at/near the bottom of the cycle then you jump in. If you think we still have a while to go, then you wait. There are some excellent stocks out there that are trading at all time lows. You could take 1/3 to 1/2 of it and buy some. In a couple of years you would be sitting fat and pretty. Another area is real estate; but only in certain parts of the country. SFO, NYC, Washington/Virginia, Orange County, Connecticut. Forget about the rest of the country. Metals are close to their peak. But remember once you commit you need to go full throttle. As they say: "He who hesitates has lost."

 

Pay off all debts, about $275k.
Put another $50k into safe investments for daughter's college (14 years away).
Maybe buy a decent nice car and do some improvements I have wanted to do ($50k total)
Conservatively invest most of the rest ($100k).
$25k to charity or to help relatives.

With no debt, a big chunk of current salary could then also go to investing or charity.

 

Ditto that. Use some to help others out. Plenty of homeless/hungry/unpriviledged out there.

 

With $500k - One thing is true about the following - principle is hard to replace.

Personally, over the past 7 months I've been investing in the mkt. Currently - I'm even - but that is really good anyway considering the S&P is down 30% - calculating - div. Nothing is for sure, but I feel I've spread my money around and am holding some nice investments. Currently about 5% is in the mkt. the rest is cash.

Max tax benefit savings - roth ira etc. --the rise of capital gains tax in the future will give those with time and planning the advantage.

Personally, with the rate of small business failures as a whole - as a whole not your specific situation - I can find better run companies with lots of upside. I left my job last july to start a business and i pulled the plug after 90 days and used the cash to invest in what has been maybe a great buying opportunity

Buy a $250k condo - put 20% down - leave you with $1400 a month in mortgage not much more than rent and you hit the 1st time buyers tax credit this year.

A good CPA and your own research can go along ways especially since the goal is to earn money without having to pay uncle sam.

I'm also in my late 20's - Ill spill (27) on April 26th - I'm too wondering about how much money one should have to buy a ferrari? I've concluded that I would like to make 2x annual on investment returns, etc - than the car would cost if I financed the whole thing for 60 months, plus insurance, and Ferrari (maintaing the car). Looking at a 07 F430 for example - think $150k- $100 financing per $5k. $3k plus say $1k for insurance and avg. annual cost - $48k - roughly $50k a year - so I would want $100k minimum.

2mill - 5% - gets you 100k. that only puts you 25%.

Go with a 75k car - $30k a year- I would want $60k - on $500k - I could get close enough on earning to go for the 360 if you really wanted. Yeah i'm on the high side probably for cost - but its better to go high than low.

If you could just save and compound ---rule ---72 becomes a crack- like experience playing with interest compounding.

Best of luck.

- My ferrari plan is pealing 1x of the 10x banger from my portfolio gains and getting a F430 - by 30.