advice

[rmatth01]

I was injured at work and received a settlement of $50,000.00 unfortunatly I am now out of a job,I have many work skills so this shouldn't be too big of a problem. I was going to get all caught up on bills and pay off all credit card debt and just keep mortgage debt. I would like to see this money grow, How would you best recomend me me to invest this money...Thanks

[jIM_Ohio]

How much do you spend annually?
Are you going back to work?
how old are you?
How do you define growth?

What I would do is probably:

1) get another job now (replace income stream)
2) pay off all debt which is charging interest above 3% (some might label this as 5%, just set a level and pay all debt costing you 3% or more off).

3a) how much is left after #2?
3b) how much time do you have left until retirement?

3a and 3b) would then change all items listed below


4) invest balance as needed for growth and or income
5) create a budget and live within budget every month
6) keep adding to the savings
7) do not change lifestyle with lump sum
8)

[rmatth01]

Jim Ohio
Yes I'm going back to work
I'm 45
I want aggressive growth I was considering flipping some houses in our area, its a great market for starter homes....What do you think

[rmatth01]

Im sorry that should be $150,000.00 not $50,0000.

[Slug]

You need to answer Jim's other questions before we can help.

[rmatth01]

I would have about about $100,000.00 left. and a mortgage of $210,000.00 at 3.75 variable

[jIM_Ohio]

I would have about about $100,000.00 left. and a mortgage of $210,000.00 at 3.75 variable

Have you accumulated any savings before? How much debt do you have? Give more information and you get better advice (read my signature).

[littleroc02us]

Don't do anything with it except put it in a savings account until you are sure that you have a job with security, because the last thing you need is to put it into and investment and then lose it or have to pay fees and taxes on it. Be patient!

[krantcents]

Don't do anything with it except put it in a savings account until you are sure that you have a job with security, because the last thing you need is to put it into and investment and then lose it or have to pay fees and taxes on it. Be patient!

I agree! I would not invest that settlement until I was sure you do not need the money for 5 years. I don't see how you know that right now. Until you know that, keep it in the highest yield liquid savings account. The most I would suggest is some sort of laddered CD's based on needs if things do not work out. Good luck in your job search.

[disneysteve]

Do you have any savings besides this money? What are your total monthly expenses once the debts are repaid?

I agree with the others that I'd do nothing until you get a new job. Once that happens, keep 6 months worth of expenses in a money market account and then you can think about investing the rest.

As for flipping houses, are you nuts? Have you learned nothing from the whole real estate bubble? Yes, housing will continue to slowly recover, but interest rates may rise which will impair that recovery. Now is not the time to be speculating and gambling which is what flipping consists of in an unstable market. Stick to long-term solid investments, not get rich quick schemes.

[jpg7n16]

As you have $150k, no income, and are injured (medical bills) - you will likely need the $150k over the next 2-3 years.

Since stocks and speculative investments need at least a 5 year time horizon, any form of stock investment would be inappropriate.

Until you create a new income, and thus change the timeline where you might need this money, you should keep it in very short term investments, like a money market account.


You always want to match the length of the investment with the time horizon you might need the money in.

So to add to DS's statement: once you are in a position to invest 'stick to long-term solid investments, not get rich quick schemes.' You will be in a position to invest when you have a predictable income coming in that covers your expenses.

[Petunia 100]

Flipping houses is a great strategy if you know what you are doing. If you don't, you can lose your startup capital in a hurry.

[Drac]

This is not a good time to start flipping houses. You need an significant additional regular income if you want to enter into the gambling game of flipping houses. Keep in mind that the real estate market is going down again. I strongly discourage you from putting your savings on real state nowadays.