What would you do with $200k???

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Minou33
Posts: 38
Joined: Wed Dec 17, 2014 6:32 pm

What would you do with $200k???

Post by Minou33 »

My husband has about $200k in a CD that is reaching maturity. This was the remainder of an inheritance left over after purchasing a home and paying off all debts. We wanted to put it away someplace until we had a better idea what to do with it. Unfortunately, we still don't know what to do with it. We are going to stack some CDs to fully fund our IRAs for the next 5 years or so. Aside from this we have no real plan. Would you invest it all in various funds? Or should we take some of it for an investment that we can use and enjoy? My husband is an avid skiier (he drives 2 hours to the mountains every weekend and rents a cheap airbnb). We would consider putting a down payment on something that we can use as a vacation rental and future retirement home. But vacation rentals are not something we know anything about. And we already run our own business.
bloom2708
Posts: 9861
Joined: Wed Apr 02, 2014 2:08 pm

Re: What would you do with $200k???

Post by bloom2708 »

Give each of the $200,000 a name and a purpose.

Do you have a 6-12 month Emergency Fund established? Do you have non-mortgage debt you can pay off?

You can certainly fund near term spending. Taxes Fund, Vacation Fund, Car Fund. Spending in that 1-5 year horizon should be kept in a Savings account or CD.

I would dedicate some of it (a good chunk) to "Retirement" which means you invest it for the long term, 10, 20, 30 years.

Are you maxing out your Tax Advantaged accounts (401k, Roth IRA)? One idea is to use some of the money to live off. This allows you to defer/save more in your pre-tax investments.

Hopefully others can provide their ideas. Read, ask follow up questions. The $200k gives you lots of good options.
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StevieG72
Posts: 2214
Joined: Wed Feb 05, 2014 8:00 pm

Re: What would you do with $200k???

Post by StevieG72 »

The real estate thing sounds like a bad idea. It will likely be more work and a lower ROI than you expect.

I would recommend investing in taxable if all of your retirement accounts are fully funded.

Check the wiki page for books to help you gain an understanding of what you should do with this money.

My personal favorites are Bogleheads Guide to Investing & All About Asset Allocation.

The best plan is to gain a comprehensive understanding of investing and DIY.
Fools think their own way is right, but the wise listen to others.
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