What would you do with $200,000

[Mr.Humble]

On 8/15/2019 at 3:53 PM, ELSknutson said:

Well my wife and I talked about it and we are planning on buying me a new car anyhow next year but not a Lambo but something nice I would Like a mercedes C63 but anyway if we did get the money we would pay off that car and my Wifes current Car. 

 

The best way how to waste money uselessly...

 

 

[Mira Yurizaki]

1 minute ago, comander said:

Managed funds generally seem to match unmanaged funds with one big caveat - they're expensive. A 1% per year management fee means you can expect to lose about 25% of your fund over a 30 year period - that is you keep $3 and the fund manager keeps $1.  

I generally recommend passive ETFs. Think Vanguard. The management fee is more like .01% - think you keep $99 and the fund managers keep $1 after 30 years. This is reasonable (it costs a little bit of money to buy/sell stocks, re-balance portfolios, etc.)

I'm not seeing how the math works here.

[dalekphalm]

4 minutes ago, comander said:

Managed funds generally seem to match unmanaged funds with one big caveat - they're expensive. A 1% per year management fee means you can expect to lose about 25% of your fund over a 30 year period - that is you keep $3 and the fund manager keeps $1.  

I generally recommend passive ETFs. Think Vanguard. The management fee is more like .01% - think you keep $99 and the fund managers keep $1 after 30 years. This is reasonable (it costs a little bit of money to buy/sell stocks, re-balance portfolios, etc.)

You keep $3 and they keep $1 would be a 25% management fee, not 1%...

 

But you're saying that over 30 years, a 1% annual fee will add up to 25% of... what? The total portfolio in the end? Deposits only?]

 

I think you need to clarify.

[dalekphalm]

10 minutes ago, comander said:

(100% - 1%)^30 = .99^30 = 0.7397004 ~= 74%

There's a dash more complexity due to the fact that the returns are variable but that's directionally correct. Each year you loose 1% to fees for basically nothing in return. 85% of funds fail to beat the S&P and passive ETFs are laughingly close to the S&P


https://www.fool.com/investing/general/2013/05/21/why-mutual-funds-are-such-a-rip-off.aspx


 

A single fund, with no additional deposits, with a 1%/year management fee (fairly normal) over a 30 year span will have ~25% of its value leeched away relative to a 0-management fee (or even a near-0).

This holds true (or approximately true) under a wide range of assumptions. If you go up by 5%/year... that increase is also affected by the 1% fee. 

(100% - 1% + 5%)^30 ~= 74% * (100% + 5%)^30

The main complexities arise when dealing with the tax implications of certain investment strategies, handling dividends, etc. To speak intelligently in this area I would need to review a bit from the days I thought I'd be doing something in finance. 

I would agree that most managed funds are not necessarily a good deal. I use a passive ETF myself and it works well. Granted, I still consider it "managed" in the sense that they create the portfolio, make sure you're always balanced, and they occasionally tweak stuff.

 

But their management fees are very low (Free under certain amounts, typically).

[Energycore]

If I had $200k to spare

 

1) Lasic

2) Dental surgery

3) Either retire off it on a low living cost country, or start my own business, probably something tech related I don't know. I'll worry about that when I get to that number.

[Mihle]

1. Pay back loans if you have any

2. Maybe make money buffer little bit larger

3. Find some improvement on the house that is needed.

4. Donate to charity

[Sauron]

If you don't need it for medical expenses, give it to someone who needs it

[Joluch]

An ex of mine was also medically discharged, he used the funds received from the VA to help him move and enroll in nursing school. And he also bought a top of the line (at the time) Surface 3 Pro.

 

If I were in your position, after everything else is taken care of, I would probably look at opportunities to contribute to a scholarship or charity that support veterans. I'm of course, biased from my experiences with the ex.

[Ashkii]

Visit online friends. Even those who are across the pond. 

[The_Prycer]

Probably build a really dank home gym and drop 100k in to an index fund.

[Andreas Lilja]

On 8/30/2019 at 4:29 AM, SnowWolf370 said:

What a... Repulsive brag topic.

 

Donate it all to charity. You have everything you need, and you're getting that monthly 2,000$ + paycheck from work.

 

So yeah.

You can have everything you need with a minimum wage job? 2k per month is 24k annual... 

[DrMacintosh]

Pay off what little debt we have and put the rest towards buying a house. 

[another_member]

On 8/15/2019 at 4:36 PM, Drak3 said:

M107A1 and some accessories.

New chassis cab truck + material to make a custom bed and bumper.

Nah, Tesla Model S.

[Drak3]

3 minutes ago, Catchears said:

Nah, Tesla Model S.

No. I will never look at Tesla as anything more than a vulgar waste of steel, lithium, and silicon.

[dalekphalm]

10 hours ago, Andreas Lilja said:

You can have everything you need with a minimum wage job? 2k per month is 24k annual... 

To be fair, we have to make some assumptions about the taxation of the money.

 

$2K monthly (assuming you actually get paid $2K after deductions), is somewhere around $30K yearly - this will depend on where you live, and what taxes you pay. I'm going off of Ontario/Canada income tax, which is middle of the road.

 

If the $200K was paid as a lump sum, you'd almost certainly be taxed as income for it - which would mean you'd lose about $74,000 to taxes, and you'd get $126K in actual cash. However, it might be tax exempt.

 

Aside from all of that, your regular pay cheque plus an extra $2K monthly really would mean for most people that they can afford anything they want. An extra $2K a month would easily put me into "upper middle class" income, borderline lower upper class.

[ELSknutson]

1 hour ago, dalekphalm said:

To be fair, we have to make some assumptions about the taxation of the money.

 

$2K monthly (assuming you actually get paid $2K after deductions), is somewhere around $30K yearly - this will depend on where you live, and what taxes you pay. I'm going off of Ontario/Canada income tax, which is middle of the road.

 

If the $200K was paid as a lump sum, you'd almost certainly be taxed as income for it - which would mean you'd lose about $74,000 to taxes, and you'd get $126K in actual cash. However, it might be tax exempt.

 

Aside from all of that, your regular pay cheque plus an extra $2K monthly really would mean for most people that they can afford anything they want. An extra $2K a month would easily put me into "upper middle class" income, borderline lower upper class.

This is government funded money and is Tax Exempt  so the $200K is actualy $200k and the $2K a month is actually $2K a month

[cluelessgenius]

if the house is paid off then send your kids to college or reinvest it somewhere to generate a bit of extra regular income from it. idk about over there but around here real estate is really lucrative right now. or you know spend it on experiences with your family. always better than material stuffs. go on some awesome vacations with your kids and make memories with them. maybe something educational for them where they get to experience different cultures and stuff. 200k buys alot vacations. 

as a younger person with no house, wife, kids yet i would try and invest it somewhere or put into savings until i actually do want to buy/build a house.

[mariushm]

Increase the value of your house ... if you're in a good area, add solar panels on the roof of your house, do a tesla power wall, be less reliant on outside stuff.

Maybe evaluate if it would be cheaper to have in-floor heating instead of air conditioning (have pipes with hot water in the floor instead of pushing hot air around)

 

Throw 10-20k into Ethereum or Bitcoin or whatever amount you won't feel so bad about losing in worst case scenario... it fluctuates a lot, but chances are at some point they may have peaks where you'd sell the currency for a profit.

Think long term like 6m to a year at minimum...