Today I found out I inherited $1,200,000

Dude. Take a deep breath. Don't do anything.

1. You are not rich. not even close, you can very easily blow this money very quickly. Find a CFP or look into this company LearnVest. Some very helpful information and financial panning services available.

2. If you are on LetsRun telling complete strangers that your "live in girlfriend will push for marriage" it tells us a couple things, you don't really know nor do you trust this woman. You might as well take out all of the cash, grab a gas can and light it on fire. If you have the type of relationship where you say how you really feel about her on track blogs to complete strangers you will soon loose all of it anyway. Don't mean to be negative chief and you seem like a good guy but an incredibly large percentage of professional athletes, lottery winners, etc. go broke very quickly. Life is about good habits and if you're not accustomed to having money you have to be VERY conscious of changing the way you view money. If you've been used to living pay check to pay check spending everything you have its only a matter of time before you blow through this as well if you don't actively change some things. The amount of money a person has doesn't matter, only their habits. How have to develop wealthy habits if you want to be wealthy. From the sounds of it your live in girl friend is eager to aid you finding things to spend this money on.

God Speed my friend.

Oh yeah. Get a Prenup.

Dave3 wrote:

If you've been used to living pay check to pay check spending everything you have its only a matter of time before you blow through this as well.

Reposted for emphasis.

41 with live-in, no kids wrote:

I am 41 and owe a little on my three bedroom house and have a few car payments left. But now suddenly I'm rich. The weird thing is that its from my dad and I had NO IDEA he had that kind of money.

He always lived like he was barely middle class.

So what do I do now? My live-in girlfriend is pretty excited about it. I can't help but think she will push for marriage.

It's actually not that much money. Americans who typically save 1.5% of their income would be surprised that if you make 60,000 gross and save 20-30% of your income and invest in low expense ratio index funds consistently, 401k, ROTH IRAs, 529, etc you can have many millions when you die at age 80.

But us Asians are very frugal.

Compound interest is a bitch. It can get you a crap ton of money.

You still have to invest it. 120-age=percent you should be in stocks.

(general rule)

Since you still owe money on your bedroom and I'm assuming it's not too expensive (200,000-250,000) I bet you haven't invested much of your money or are financially wise.

But if you do want to be enlightened start reading basic books like idiots guide to mutual funds, a walk down wall street, books by Warren Buffet, the Motley fool, etc.

moneysnob wrote:

you can have many millions when you die at age 80.

Because that is the goal.

jan van eyck wrote:

Previously married? wrote:

Why even pay 1k and/or .8? Use Vanguard Flagship service and you pay 0 for advice and well less for funds/etfs with 0 cost stock trades.

that can work. many like to be able to sit down with a real person who can give more advice than just investment. A CFP can do that.

but nothing wrong with the vanguard service.

Price and fees are not the only thing to focus on either. If you can hire an advisor or active manager that outpaces these "no load" investments over significant periods of time (even with fees and sales charges included) why wouldn't you use them?

Also, put at least a good chunk in a nice dividend paying mutual fund, maybe mix in a tax free muni fund, nothing flashy, have some extra income for a while and decide what you want to do after a few years.

Why did you even tell your liven-in

go gatlin wrote:

Hit it like you are 41 wrote:

Your post reaffirms my belief that 95% of runners are complete nerds. Dear old Dad has bequeathed him with a license to run and bang and all the other guys want to argue about is Certified Financial Planner costs and tax implications???

F that!! Run, dope, bang, repeat!!! 50 is right around the corner!!!

I believe the website you are looking for is letssprint.com

Nice one.

agip wrote:

ok

tell me how he gets it into the roth.

if it is in a regular IRA then you want him to convert? then he would pay income taxes on over a million dollars of income?

if it is not in an ira already, his limit is $5500 per year.

a roth is not the answer unless I am missing something.

Sorry, I posted too quickly. Max-funding 401k through employer if possible. If OP is self employed, there should be a SEP. I know it's not a ROTH.

But, this gets back to an earlier post. If OP doesn't have good planning/spending discipline, then it will vanish.

And again, $1,200,000 isn't much.

41 with live-in, no kids wrote:

I am 41 and owe a little on my three bedroom house and have a few car payments left. But now suddenly I'm rich. The weird thing is that its from my dad and I had NO IDEA he had that kind of money.

He always lived like he was barely middle class.

So what do I do now? My live-in girlfriend is pretty excited about it. I can't help but think she will push for marriage.

You've received some really good financial advice from your brethren here at Letsrun, and I urge you to sit down and read it all after spending a week in Vegas banging hookers with your girlfriend.*

------------------------------------------

* Yeah, you can demand her to go along with that now - you are a millionaire.

You're actually not far off.He should definitely not trust "Financial Advisors" with a flowchart of where he should invest his money.No kids? Seriously, go try living somewhere else. Start a business. Live. Girlfriend can come, or not. Life is too short. Just ask your Dad....

PLACP wrote:

Forget these financial planner idiots. Get the money out the bank and hide it in your walls, safes, underground, etc. Dump the chick, go travel the entire fvcking world for a decade or so. Come back home, get a ferrari and wreck it. Go travel again

Blargh. I'm going to step in the middle and offer a reasonable middle ground b/c I think you both actually agree and both assume you don't see each other's points.

First to summarize their points

agip: Give it to a pro to manage

sloetry: That's dumb b/c the pros consistently underperform simple EQUITY index trackers and you pay higher fees!

agip: That's true, but not everyone wants (or should want) to track the main equity indices. A person with one year to retirement should definitely not stick all that money in equities. A 20 year-old should not be buying all inflation linked bonds. Etc. Time horizons and risk appetite need to be considered. Equity has historically higher returns but also higher volatility. This makes is no good for the guy about to retire, but great for the 20 year-old with a long time window to absorb the vol. Invert the argument for bonds.

sloetry: Homeboy is 41. He should be buying mostly equity at that age (he's presumably a runner and is going to live to be 80-90).

agip: yeah but vol.

sloetry: yeah but vol.

You guys are seeing it the same way, but just disagree that you need a pro to manage it for you. You both agree you should own some changing blend of equity/fixed income/misc assets that shifts from the higher return/higher vol categories (equity generally) to lower return/lower vol categories as you age (bonds). The question is do you need a pro to do this for you?

I say the answer depends on how much that pro is charging and how much it is worth to you not to have to bother. Make that calculation and go from there. You can google for general strategies on retirement investment planning which can guide broad decisions on asset classes. This won't give you specific investments but it can shape your thinking.

1) you are not rich. 1.2 mil is a nice chunk of change, but all it really provides is about 45-50k a year of extra spending money. Sure you can go blow it on fancy stuff, but then you will be right back where you are now in 5-10 years - just like most other people who inherited or won money. Try not to spend more than 4-5% a year from the money.

2) if the money was in a trust, you are good. DO NOT transfer it to your own account right away. Set up a new trust with you as the trustee. Then your girlfriend/future wives can not get to it. NEVER mingle this money with your personal accounts once you are married. Keep them separate.

3) If the money is just in a will (with no trust)l, be prepared to pay probate. Figure out how much this will be before you count your chicken.

4) Repeat after me. You are not rich. You are not old enough or rich enough to retire (but you might be in 10-15 years depending on where you live).

$1.2M in today's dollar is about $163K in 1966 dollars. Being a millionaire is nothing these days. Pretty soon you'll be in trouble if you don't retire a millionaire.

You can retire. You should have already given the finger to everyone at your job on your way out.

Warren wrote:

1) you are not rich. 1.2 mil is a nice chunk of change, but all it really provides is about 45-50k a year of extra spending money..

No way. 10,000 tops.

jan van eyck wrote:

unless you are good with money, put it in the bank and go find a certified financial planner. Interview several.

make it clear that you will pay no more than $1000 for a financial plan and you will pay fees of 0.8% per year maximum, including fund fees.

If he tries to get you to buy an annuity or something with a commission, be very suspicious. You probably won't want to do that.

You aren't rich unless you live in west virginia or something...this might provide you another $45,000 or so each year. Solid, but not life changing.

I read about 5 replies and decided that you guys are fooking idiots. He has $1,200,000 that he didn't have before. I am guessing that is the amount AFTER TAXES, so that is what he has. He detailed that he has a light debt load.

He is 41, so he has 20 more yrs until R-day, unless he is stupid with money, which it sounds like HE IS NOT.

$1,200,000 / 20 yrs = $60,000 per year ... even if there was NO GROWTH ... NO GROWTH ... GET IT???!!?

So he now has a $60,000 a year raise. So he now can afford to fully fund his 401K and a ROTH IRA, adding about $24,000 to his RET-fund each year for 20 more years. He will be able to pay off his house and car within two years, no problem. That frees up almost $2000 a month that he hasn't seen for 10-15 yrs.

Then there is the other $40,000 left each year, for well, trips to Europe, a vacation home, a new car. And the best part is that $40,000 a year will keep coming for another 19 years after the first one, no matter what he does ... as long as he keeps his job and does what I outlined above as far as paying off the other things and only allowing himself $40,000 a year and devoting the other $20K to soaking up the amount his 401K is now absorbing and $5,500 that the ROTH eats up.

Even if he makes $40K right now (especially if he makes $40K), $100K almost guaranteed fro the next 20 years is RICH in my book.

Or, alternatively, I know it is not guaranteed, but if you put it into a portfolio it will earn each year (over the long term, I know there will be peaks and valleys) forever:

3% - $36,000

4% - $48,000

5% - $60,000

6% - $72,000

7% - $84,000

...

You get the picture.

ROFL, ALMOST 100 COMMENTS ON AN OBVIOUS TROLL.

Ya, the first thing I would do if I basically hit a 1.2 million dollar lottery is ASK LETSRUN FOR FINANCIAL ADVICE, ROFL.

What kind of advice are you going to get for $0?

The best. None. It's an index fund.

Congratulations. 1.2m buys a large one or small two bed apartment where I'm from. It's not life changing so just invest set and forget.