How would you make inheritance work for you?

[Patt]

I'd pay off the majority of my house loan, and keep about $50000 for incidentals. That would be so sweet ...

 

[JS80]

Originally posted by: CPA

Originally posted by: joshsquall
I'd pay off our student loans and cars first (like $65k total). I'd probably put the rest into the bank and stocks. Not really worth it to pay off my house yet, since I'm paying 95% tax deductible interest.

sorry, but that is poor justification. You are paying 5-6% interest to save maybe 25% of that on taxes. You don't get it dollar for dollar, so why would you keep it?

Example (in simplest form)

House Paid Off:
Wages $100K
Tax Bracket: 25%
Taxes: $25K

House Not Paid Off:
Wages $100K
Interest $10K
Taxable income: $90K
Tax Bracket: 25%
Taxes: $22.5

Tax Savings: $2.5K So you paid $10K to save $2.5K. Does that look like good financial prudence to you? When you have the opportunity, PAY OFF YOUR HOUSE!

And then this happens

 

[krunchykrome]

I would pay down the house with it.

 

[Crusty]

Originally posted by: nick1985
I would do what any reasonable person would do.

Promptly invest it in TechboyJK's startup. :thumbsup:

:laugh:

 

[CPA]

Originally posted by: JS80

Originally posted by: CPA

Originally posted by: joshsquall
I'd pay off our student loans and cars first (like $65k total). I'd probably put the rest into the bank and stocks. Not really worth it to pay off my house yet, since I'm paying 95% tax deductible interest.

sorry, but that is poor justification. You are paying 5-6% interest to save maybe 25% of that on taxes. You don't get it dollar for dollar, so why would you keep it?

Example (in simplest form)

House Paid Off:
Wages $100K
Tax Bracket: 25%
Taxes: $25K

House Not Paid Off:
Wages $100K
Interest $10K
Taxable income: $90K
Tax Bracket: 25%
Taxes: $22.5

Tax Savings: $2.5K So you paid $10K to save $2.5K. Does that look like good financial prudence to you? When you have the opportunity, PAY OFF YOUR HOUSE!

And then this happens

LOL, I knew someone was going to bring that up.

 

[Elbryn]

pay off the house, fund the kid's 529 account, give the wife 10k to do whatever she wants, give myself 10k to do whatever i want, probably blow the rest on home improvements (new roof, windows, and flooring)

 

[Deeko]

pay off student loans, pay off car, put down payment on house, invest

 

[jaha2000]

I was in that guys situation in Feb.... I got about twice that but....
Here is what i did.
1. Paid off the 20 of my 80/20 home loan. (30k)
2. Paid off my student debt. (about 5k)

That was it.... I did a refi and got my rate to like 4% or so and i have not touched the rest of it. At this point its not that im debt free but that i COULD be if i wanted to be. I need all the tax advantages i can get, its not quite as simple as you have said above... Divendends, capital gains????
I am making double payments at my house at this point, and i have found myself putting less into my savings and more into paying down other things (car, home improvements) knowing that i have the net to catch me just in case something happens. Remember that a car is a terrible investment!

 

[Cogman]

Pay off any debts I might have incurred, and put the rest into a retirement fund, or at very least a rainy day fund. Might as well retire a few years earlier/be prepared for the worst. Spending it on toys is a waste. (im not big into "things" so I really wouldn't have a whole lot to spend it on.)

 

[Saint Nick]

Pay off debts, maybe purchase some real esate, then find an investor and invest the rest.

 

[QueBert]

Find a casino willing to accept the bet, and put it all on black

link to story

pretty much a no brainer.

 

[BurnItDwn]

I would buy an Aston Martin. If I had any money left over, I would also build a garage for it.

 

[Gunslinger08]

Originally posted by: CPA

Originally posted by: joshsquall
I'd pay off our student loans and cars first (like $65k total). I'd probably put the rest into the bank and stocks. Not really worth it to pay off my house yet, since I'm paying 95% tax deductible interest.

sorry, but that is poor justification. You are paying 5-6% interest to save maybe 25% of that on taxes. You don't get it dollar for dollar, so why would you keep it?

Example (in simplest form)

House Paid Off:
Wages $100K
Tax Bracket: 25%
Taxes: $25K

House Not Paid Off:
Wages $100K
Interest $10K
Taxable income: $90K
Tax Bracket: 25%
Taxes: $22.5

Tax Savings: $2.5K So you paid $10K to save $2.5K. Does that look like good financial prudence to you? When you have the opportunity, PAY OFF YOUR HOUSE!

I'd also hope I can make at least a 5% gain in the market with that money.

 

[CPA]

nm

 

[BassBomb]

I'd buy some nice shit for myself (I still live at home, already have a car I'd keep for a long time).

Save the rest

 

[TwiceOver]

Pay off all outstanding debt. Max out Roth and 401k. College funds (I don't have kids, but if I did...).

Don't think there would be much left over.

 

[Bryophyte]

Pay off spouse's student loans, boat, car, other debts, pay down mortgage.

 

[HardcoreRobot]

pay off 2nd mortgage, buy a new car, save/invest

 

[RedRooster]

The only reasonable investment is to buy a very fast car and race it for pink slips. Eventually, you will be rich.

 

[compman25]

Hookers and blow

 

[MyThirdEye]

I would seriously buy a new Maserati, and keep the rest of the money for repairs/oil changes/emergencies.

 

[Kadarin]

I would buy a house and use some of it for the down payment. I would also pay off my car, then of the remainder put some in savings and invest a chunk in the stock market for long term.