100k fell in my lap; advisor says money market acct is best bet - Page 2

[mnnice]

I was thinking per year when I read it. So pretty close to the same thing

[EFmom]

I think you've been given some good advice. Read a number of sound financial investment books. Anybody promising get rich schemes ignore. Precious metals are very speculative, and I agree with a pp, they are probably at or near high prices now. My FIL has a penchant for investing in precious metals (he's reasonably wealthy and only invests a bit in this) and has lost more over the years on this than any of his other investments.

Given your health situation, personally I wouldn't be buying expensive presents like cars for anybody. Money goes away very quickly. The higher the rate of return, the riskier the investment.

People who live off their money generally have a very large amount of it to begin with and have a diversified portfolio, where some of it is in riskier (higher return) investments, but most of it is in more stable investments.

[Poddi]

I hope OP can clarify this, but it sounds like she received way more than 100k, right? After spending some, she wanted to "start with" 100k to practice investment strategies. You can't live off the interest of 100k, but if it's 300k and you only need to supplement your very low living expenses, that's a different story.

[blessedwithboys]

Oops, forgot about this thread.

I received this money after my father died. It was his retirement fund. I was the sole living named beneficiary, but my dad had other children. As the oldest, he left me in charge to help them because he knew they would blow their share. That's why I bought cars for my siblings.

I did get more than just $100k, but not in the realm of millions upon millions.

I have Chronic Fatigue Syndrome. I am able to function fairly normally. I just spent about 5 years working M-F, 24 hrs/wk. I was feeling a big flare coming on right when I got the money, so I went on sabbatical. LOL I can always go back, I left on good terms so that that bridge was not burned.

I want to spend the next year being more involved with volunteer projects at the kids' school and at my church. But I do know I will have to go back to work before too long.

I don't think buying a house would be a good idea right now. I hate where I live. It's actually bad for my illness to be here, but Ican't leave the state until ds1 is 18. I'm not sure it would be smart to buy now and then have to sell in 2-3 years. There's a good chance the house wouldn't sell anyway, and I don't want to have to deal with a renter while I live thousands of miles away.

Right now I pay about $700/mo for a decent 3/2/2. When something breaks, the owner fixes it. For example, we had a power surge last week and all the can lights in the kitchen blew at once. If I had had to pay for the electrician, it would have been bad.

Yes, I bought an SUV, but I want to be able to cart my kids' friends around and carry camping equipment, etc. It's a Honda and I can sell it back to the dealership anytime for a fair price. I have been told by more than one person, IRL and on line that I negotiated an incredible price. Right now, I could sell the car for about $1k less than I paid for it a year ago. It's very likely that when I finish my volunteer project and go back to work I will sell the truck and get a new small sedan.

I looked over the info on the Vanguard fund and I pretty much don't understand any of it. Is it saying that an investment of $10k gets you a return of $1k after one year? So I would make $10k in 12mos by putting in $100k? So confusing!

[EFmom]

Originally Posted by blessedwithboys

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I looked over the info on the Vanguard fund and I pretty much don't understand any of it. Is it saying that an investment of $10k gets you a return of $1k after one year? So I would make $10k in 12mos by putting in $100k? So confusing!

Really, you need to spend some time reading some basic investment books. It will be more than worth the time and effort. Your public library will have a selection.

The Vanguard fund (I'm assuming you are talking about the mutual fund) can tell you about past performance but it cannot predict future performance. So, you could invest $100K in a mutual fund this year and have $140K next year (not likely, but possible) or you could find that it's plummeted in value and is worth $35K next year. In general, the higher the rate of return, the higher the risk.

[JudiAU]

CD is a good choice for your situation. Assuming the economy turns around soon, interest rates will rise. You are unemployed, have very little income, and have small children to support. I don't think you should accept the risk of the stock market until you return to work.