Just got a life insurance settlement, need a good investment plan

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Ezra Fitch

I'm in my late twenties and am finishing up college and then going to grad school. I recieved a life insurance settlement, and after buying a car, a townhome for $185k and paying off debts I have about $175k left. I don't know anything about investing but have been reading every book I can get my hands on. At first I thought it would be best to invest for income doing a 65% bonds, 20% money market, 15% stocks, in order to help with living expenses until I finish school, while preserving my capital, and then when I start working, change my investment portfolio to accumulate growth. However, many people told me I should set aside money for living expenses and tuition for the next few years (which would be at least 75k) and invest the 100k right now for growth. Others say I should do that, but refinance on the house and add that to the investment. What would you do?
 
Quote from Ezra Fitch:

I'm in my late twenties and am finishing up college and then going to grad school. I recieved a life insurance settlement, and after buying a car, a townhome for $185k and paying off debts I have about $175k left. I don't know anything about investing but have been reading every book I can get my hands on. At first I thought it would be best to invest for income doing a 65% bonds, 20% money market, 15% stocks, in order to help with living expenses until I finish school, while preserving my capital, and then when I start working, change my investment portfolio to accumulate growth. However, many people told me I should set aside money for living expenses and tuition for the next few years (which would be at least 75k) and invest the 100k right now for growth. Others say I should do that, but refinance on the house and add that to the investment. What would you do?
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I would take rest of the stash, walk over to the nearest Indian Casino and start pulling $100 slot machines. I would ask for free beer and shrimp ala carte.
 
You have to decide who is going to run your investments. Are YOU going to take responsibility or are you going to turn it over to someone else and pay them a fee?

If you are going to be running the show, you need to do nothing with your money right now. Deposit where you can get some interest while you learn about investing... and be prepared to buy something appropriate after a significant decline in the markets.
 
Quote from gnome:

If you are going to be running the show, you need to do nothing with your money right now. Deposit where you can get some interest while you learn about investing... and be prepared to buy something appropriate after a significant decline in the markets.
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Agree. Keep it in cash, or even better, gold, until you know really well how to survive in the markets.
 
Quote from day7793:

I would take rest of the stash, walk over to the nearest Indian Casino and start pulling $100 slot machines. I would ask for free beer and shrimp ala carte.
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My first thought was to go to the track but you said it better. No free beer or shrimp at the track.
 
I would ask you where do you see yourself 5-10yrs from now financially. 1) living below your means 2) living at means 3) living above means. All the truly wealthy people I personally know living below thier means to help control expenses. All truly wealthy people own real estate and the savvy ones alwayls buy below market value (20%-30%) no matter what the market is doing. Stock/Real Estate/Bonds - ALWAYS BUY ON SALE.

I took me a very long time to grasp the concept and so many other still don't get it. :confused:
 
Just to further add- You make your money when you BUY, not when you SELL. Translation (When you buy right/low, when you go to sell/high, your profit is built in) doesn't matter if the profit is 2%, 5%, 10%, 15% or more. The profit margin is built in.

So many people get it wrong, ignoring the rate of inflation, taxes, rate of appreciation and cost capital and risk.
 
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