Posted: 5/2/2011 12:51:01 PM EDT
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So my family has finally seen the light and is getting prepared.
My dad has reccently come into a large sum of money and isn't sure what he should do with it. He has a morgage, one that he should have paid off in about 10 years if the current situation remains. Its 100% fixed price morgage so if he pays it off now or in 10 years its going to cost him the same amount of $$ I think he should save / invest it into something that will produce a good return for him to put aside for a rainy day. Note: the sum of money he has is not enough to pay off the entire morgage. What does the hive think? |
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How much did he receive?
How much is left on his mortgage? Does he have any other outstanding debts? How much does he have saved up? Does he have a "rainy day" fund? Id say stay away from any kind of investing right now. Lots of people will argue over just putting the money in the bank as the dollar is falling, I dont personally subscribe to that. If youve got what you need there is no point in spending money just because you feel product __________ will be better than devalued dollars in the bank. |
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Quoted:
So my family has finally seen the light and is getting prepared. My dad has reccently come into a large sum of money and isn't sure what he should do with it. He has a morgage, one that he should have paid off in about 10 years if the current situation remains. Its 100% fixed price morgage so if he pays it off now or in 10 years its going to cost him the same amount of $$ I think he should save / invest it into something that will produce a good return for him to put aside for a rainy day. Note: the sum of money he has is not enough to pay off the entire morgage. What does the hive think? A paid for home is a good thing......being completely debt free is wonderful.....if hes never had that kind of money in his hand before id tell him to park it in the bank for 6 months and think LONG AND HARD about what he wants to do with it. pesonally id put a years worth of expenses in the bank and pay down debt.........if hes not paying interest on the home id keep it all in the bank untill I could write a check to pay it off (and still have a year of exspenses in the bank. |
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If your dad only has 10 years left on a 30 year mortgage then he won't save a whole lot by paying it off now, as most of the interest is paid on the front end. What he eventually invests it in will be determined by how soon he thinks he'll need the money (is he going to retire soon?) and his risk tolerance.
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Quoted:
How much did he receive? How much is left on his mortgage? twice his yearly income Does he have any other outstanding debts? a couple of credit cards but I think he's already paid them off (only something like 2 grand was left owing) How much does he have saved up? zip as far as I know[/red ]Does he have a "rainy day" fund? [red]Nope, he's been thinking about it for about a year but never quite got around to actioning it. Id say stay away from any kind of investing right now. Lots of people will argue over just putting the money in the bank as the dollar is falling, I dont personally subscribe to that. If youve got what you need there is no point in spending money just because you feel product __________ will be better than devalued dollars in the bank. |
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"I think he should save / invest it into something that will produce a good return for him to put aside for a rainy day." That's one good alternative. Would you share a few examples of where to put $$$ to get a good return?  Wish I could help it's just an option he's prepared to look into. Used to own a small hobby business but it folded over. |
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Quoted:
If your dad only has 10 years left on a 30 year mortgage then he won't save a whole lot by paying it off now, as most of the interest is paid on the front end. What he eventually invests it in will be determined by how soon he thinks he'll need the money (is he going to retire soon?) and his risk tolerance. He doesn't plan to retire for another 10-17 years I think. Unlike most people he really loves his job, turned out to be a great career for him. He's not a big risk taker he likes to anaylis and calculate everything. |
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Inflation is almost in full swing. I would dump every dollar I had to either pay off the mortgage or invest in other real estate - BOL paid for in full. I would normally say buy silver or gold, but in these days I think food, ammo and getting off the grid (power/water) are more important. The dollar WILL fail. You DONT want to be in a situation where you have a home where you cannot pay the electric bill..... etc....
Our home is paid for. We are still dependant on electricity at this moment. I am doing everything I can to eliminate that part of the equation... |
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Quoted:
Quoted:
How much did he receive? How much is left on his mortgage? twice his yearly income Does he have any other outstanding debts? a couple of credit cards but I think he's already paid them off (only something like 2 grand was left owing) How much does he have saved up? zip as far as I know[/red ]Does he have a "rainy day" fund? [red]Nope, he's been thinking about it for about a year but never quite got around to actioning it. Id say stay away from any kind of investing right now. Lots of people will argue over just putting the money in the bank as the dollar is falling, I dont personally subscribe to that. If youve got what you need there is no point in spending money just because you feel product __________ will be better than devalued dollars in the bank. First off it sounds to me like he needs to park some in savings and especially a "rainy day" fund. The house is a constant and you know what it will be every month. Its not something unexpected like your car breaking down, being hospitalized, and other things that you never know when they're going to happen and what they're going to cost. |
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Well, if you think inflation is coming and you're locked into a fixed rate mortgage ... you'd be utterly insane to pay off that loan early.
Put money into durable goods and preps if you think the dollar is falling. Avoid PM's like the plague. Buying in at the top of the market is a fools game. |