investing

[teknochild]

Originally Posted by BMWE90

That's freaking ridiculous. I hate the way the government works sometimes. The inheritance is something his family worked for. THey've already been taxed on whatever money they made and now aother 50%???

thats why it pisses me off so much when "regular" (not being condesending) people say that taxes favor the upper class and the poor and middle class get shafted because its total bullshit and they dont know wtf they are talking about

both income tax and estate taxes are tiered, meaning the more you make the more your taxed (35%) and the more you die with the more your taxed (55%) and thats the lowest its been in decades

so if someone dies and leaves you 15 million dollars, you can say goodbye to 7 million of it and then say hello to being forced into long term investments for the rest of your life (capital gains tax is much lower than income tax for 1 year+ growth investments) unless you want to pay 35% tax on every penny you earn

so basically someone with millions of dollars pays the government twice as much as a bunch of middle class people who combined earn the same amount



i expect the OP to be thrown into this world of retardation shortly and then reflect on what he should do with the rest of his life

i also suggest you quit the army, it would suck if you died now after just getting all that money, and then having it get taxed 55% AGAIN, actually your a lucky son of a bitch and probably svaed a ton because its 2007 now

[scottwww]

Originally Posted by Poderes1

I do Financial services. What you should do is invest the money and some good Mutual Funds. I personally recommend investing in American Funds

American Funds Investment Company of America (ICA)
American Funds New World Fund
American Funds EuroPacific Growth Fund
American Funds Growth Fund of America
American Funds Capital World Growth and Income Fund

These funds have a great track records and the company itself is very reputable with over 900 Billion in managed assets. You can check out I believe Barrons Financial Newsletter to check the company profile. Very good ratings you will find. Hope that helps.

I think our securities laws may be too controlling, but you would do well to not recommend a specific investment without completing a financial analysis, or at least building a risk profile.

Having said that, I would suggest diversification. With a good financial advisor (give some weight to designations such as CFP, CLU, LUTCF, ChFC, CPA, and etc.) consider:

• what degree of risk you are able to accept
• what is your investment timeframe
• what are your realistic expectations

Place appropriate amounts of investment money in:

• securities (stocks/bonds/hedge/options/etc.)
• risk management (life/disability/long term care/annuity and other insurance)
• retirement and education funding
• real estate
• cash and cash equivalent

If you have enough to be a qualified investor:

• hedge funds
• private placements

Consider whether you want to finance your own business.

Consult with a tax professional (CPA) who might also be your financial advisor or who will cooperate with your advisor.

There are a lot of ways these people can get paid (fees, commissions, hourly). If there is a lot of money involved, you need to proceed with a great deal of care. People can make a lot more money off of you than the increase you will enjoy if you are not careful. Don't be hasty to move the money. Don't just sit on the fortune indefinitely if it is cash. It isn't going to do much for you as cash. It will be tempting to spend too much of it and not pay attention to what happened.

This is not meant to be a comprehensive list of possibilities or sufficient for drawing up a plan. Just some ideas for you.

[ScheerSpeed]

ok, im a race car driver, i have won a world championship, and a national championship, and i need sponsors. you can sponsor me to one day become a Formula 1 driver or NASCAR driver. i am not kidding about this, check out my website: WWW.Scheerspeed.com

[teknochild]

Originally Posted by ScheerSpeed

ok, im a race car driver, i have won a world championship, and a national championship, and i need sponsors. you can sponsor me to one day become a Formula 1 driver or NASCAR driver. i am not kidding about this, check out my website: WWW.Scheerspeed.com

fuck that dude id sponsor myself, more fun, who cares if you win or not

[07335-06325]

Wow!! Thank you for all your help!! I am kind of pissed that this money will be taxed again!!! I wish there was some way of getting around this. But thank you again for all your help. I will definetely do my homework on this, so i dont do anything stupid.

[txusa03]

that is why you should use as much money as you can when you are alive. Go and travel to europe, cananda, china, hongkong, ect. Dont let the gov steal all your money. use it and have fun but dont over spent too fast.

can the gov steal from a trust fun? I heard that trust fun are very strict and has specific clauses on how the money is to be spent and by whom...

[Poderes1]

Originally Posted by scottwww

I think our securities laws may be too controlling, but you would do well to not recommend a specific investment without completing a financial analysis, or at least building a risk profile.

Having said that, I would suggest diversification. With a good financial advisor (give some weight to designations such as CFP, CLU, LUTCF, ChFC, CPA, and etc.) consider:

• what degree of risk you are able to accept
• what is your investment timeframe
• what are your realistic expectations

Place appropriate amounts of investment money in:

• securities (stocks/bonds/hedge/options/etc.)
• risk management (life/disability/long term care/annuity and other insurance)
• retirement and education funding
• real estate
• cash and cash equivalent

If you have enough to be a qualified investor:

• hedge funds
• private placements

Consider whether you want to finance your own business.

Consult with a tax professional (CPA) who might also be your financial advisor or who will cooperate with your advisor.

There are a lot of ways these people can get paid (fees, commissions, hourly). If there is a lot of money involved, you need to proceed with a great deal of care. People can make a lot more money off of you than the increase you will enjoy if you are not careful. Don't be hasty to move the money. Don't just sit on the fortune indefinitely if it is cash. It isn't going to do much for you as cash. It will be tempting to spend too much of it and not pay attention to what happened.

This is not meant to be a comprehensive list of possibilities or sufficient for drawing up a plan. Just some ideas for you.

There are very few Financial advisors that know what they are doing. Besides all they do is give advice, and tell you where to go to can get your investment product but don't actually have the product. I have the actual products. I agree with your comments though on what he should look into.

[Hawkshaw]

Take half, buy a life annuity, and have fun with the rest.

[teknochild]

Originally Posted by txusa03

that is why you should use as much money as you can when you are alive. Go and travel to europe, cananda, china, hongkong, ect. Dont let the gov steal all your money. use it and have fun but dont over spent too fast.

can the gov steal from a trust fun? I heard that trust fun are very strict and has specific clauses on how the money is to be spent and by whom...

all my money is in trust funds, they can be strict on how the money is used usually something like "education maitanance and support" while your under the age to recieve principle, but the government can still stick their dirty little hands in there and take money, there are trusts protected against debt collectors though



and spending all your money while your alive is one of the tough things, because of the way taxes work in the US if you spend it you get taxed, but if you just leave it to grow you dont get taxed

so out of a million dollars by not spending, 500k could belong to the government but still be yours, so you still get like 50k a year from the governments money, but if you go and try and spend it you dont even get to spend it all because you get hit by tax and then you dont have the money to make money off of anymore, so its a hard choice to go spending all that money

[UncleWede]

Once you get everything straightened out, if you have (or plan) kids, put YOUR estate into a Family/living trust, to help avoid those probate taxes and delays.

How is Germany? MAYBE somewhere you'd like to transfer your life (and money?)

Oh, and don't forget (insert your favorite charity here). Unless your favorite charity is the US government, better to have at least some of those funds go to YOUR choice.

[sixspeedsam]

Originally Posted by 07335-06325

I need some serious help here, i dont need anyone to come on here and talk shit. I inherited alot of money, and i was wondering if someone on here had any advise on how to invest it. I am open to all suggestions. Thanks,
Rick

My assumption here is if you inherited the amount you posted, then you should have (or your family) a solid base and foundation of experienced financial, estate and tax professionals that will be more then willing to assist you in all your financial decisions.

The whole notion of retiring based on x amount of wealth is influenced heavily by the lifestyle you're accustomed to, or the one you're willing to accept. It goes without saying that you should enlist help to manage your assets -- and make the money work for you vs. vice versa.

While suggestions for x fund or stock is fine, without someone focusing on your ultimate financial goals and risk tolerance it ends up being a moot point. Good luck - and congrats on the inheritance

[6SpeedMan]

me

[jadeddjay]

Originally Posted by 07335-06325

Wow!! Thank you for all your help!! I am kind of pissed that this money will be taxed again!!! I wish there was some way of getting around this. But thank you again for all your help. I will definetely do my homework on this, so i dont do anything stupid.

well charity donations dont get taxed so you can just give it all to me >: )

[07335-06325]

What is a life annuity? I had my wife talk to her lawyer, and he said there is no way the american govt can tax the money because this money has already been taxed. Her parents worked for this money, so it has already been taxed. For now, i think i'm just going to buy a couple houses, rent them out, and buy myself the house i want in florida. How much can you gain from having a Swiss Bank Account, or is it just for holding a large amount of money?

[teknochild]

Originally Posted by 07335-06325

What is a life annuity? I had my wife talk to her lawyer, and he said there is no way the american govt can tax the money because this money has already been taxed. Her parents worked for this money, so it has already been taxed. For now, i think i'm just going to buy a couple houses, rent them out, and buy myself the house i want in florida. How much can you gain from having a Swiss Bank Account, or is it just for holding a large amount of money?

nothing

and what do u meen the lawyer said the gov cant tax the money? is he retarded? go talk to someone besides an ambulance chaser before the gov comes after your ass

i cant believe some guys died and just straight left u mutli millions in his will, that like never happens, how much of the details do you actually know?

[Hawkshaw]

Originally Posted by 07335-06325

What is a life annuity? I had my wife talk to her lawyer, and he said there is no way the american govt can tax the money because this money has already been taxed. Her parents worked for this money, so it has already been taxed. For now, i think i'm just going to buy a couple houses, rent them out, and buy myself the house i want in florida. How much can you gain from having a Swiss Bank Account, or is it just for holding a large amount of money?

An annuity is a stream of payments. For example, let's say you had $1,000,000. You could take that money to an insurance company and they would sell you an annuity. So you give them the $1,000,000, and they give you an annual income of $55,000 or so for life. If you die the next day, shitty for you, the insurance company wins, but if you outlive their projections, then you end up taking out more than you put in. As a whole though, the insurance company is ok because they win some and they lose some.

Basically, it protects you from outliving your money. A lot of people buy annuities with their RRSP savings (in Canada) or 401K savings (in the US) when they retire to ensure income for life.

Same sort of thing with lottery winnings - they usually give you choice of a lump sum up front, or a stream of payments for 20 years or something like that...the stream of payments would be an annuity.

[txusa03]

Wow, lots of info on here. Very interesting. Yeah, I have been approached several time on annuity but I never commit to it. Cant trust anyone. It is hillarious that I get more honest discussion here than with the ppl who try to sell me annuity.

[teknochild]

Originally Posted by Hawkshaw

An annuity is a stream of payments. For example, let's say you had $1,000,000. You could take that money to an insurance company and they would sell you an annuity. So you give them the $1,000,000, and they give you an annual income of $55,000 or so for life. If you die the next day, shitty for you, the insurance company wins, but if you outlive their projections, then you end up taking out more than you put in. As a whole though, the insurance company is ok because they win some and they lose some.

Basically, it protects you from outliving your money. A lot of people buy annuities with their RRSP savings (in Canada) or 401K savings (in the US) when they retire to ensure income for life.

Same sort of thing with lottery winnings - they usually give you choice of a lump sum up front, or a stream of payments for 20 years or something like that...the stream of payments would be an annuity.

is that number accurate? why in gods name would someone pay an insurance company 1 million dollars to give them a yearly income of 50k for the rest of their life? you can get that much each year from 1 million dollars in no risk investments and still have the million dollars

if i was going to pay an insurance company 1 million dollars they better be paying me something more like 100k a year

[Ninjaneer]

Originally Posted by 07335-06325

For now, i think i'm just going to buy a couple houses, rent them out, and buy myself the house i want in florida.

Woohoo, next FL meet @ your house j/k

[scottwww]

Originally Posted by teknochild

is that number accurate? why in gods name would someone pay an insurance company 1 million dollars to give them a yearly income of 50k for the rest of their life? you can get that much each year from 1 million dollars in no risk investments and still have the million dollars

if i was going to pay an insurance company 1 million dollars they better be paying me something more like 100k a year

There is more to what hawkshaw was saying that what he said. There are a lot of tax advantages to using insurance products. One product to consider is a single premium Variable Universal Life Insurance Policy. With this, you can take "loans" from the cash value without paying it back and without being taxed. Then the face value and any remaining cash value goes to your aires without tax. I am no expert on this, but it is the general idea. The insurance industry has a very strong lobby and have been used, especially by the wealthy, for over 100 years. I am sure there are a lot more details that I am not aware of for 8 million dollars.

In practice, the fees are higher than mutual funds, even though the cash value is similarly invested. In the end, it is life insurance. You would do well to have some. You are young and the cost of insurance should be low.

I know less about annuities than about insurance, but they may have a place in your portfolio. Generally, I wouldn't want my money in annuities except if I have exhausted my potential for tax deferred investments. The low rate of return on an annuity would push me hard into a variable annuity. Once you are in an annuity, you probably are stuck with the money there for seven years. Hopefully the laws have changed since I knew that and it would be more portable to retirement funding.

Don't put it all, or substantially all, into any one investment or even a category of investment. Talk with a good trust attorney to find out whether this would have much value for you. The people who know the most about this subject tend to be motivated to sell their products. Since they deal with people who don't care to learn what they are doing with investing, they will put it into sound-bites, a lot of schmooze, and gain your trust before they sell you what will make them money.

I would rather be in your shoes than mine as the money goes, but I would certainly take my time. It would probably be a full-time occupation until I had everything in place (most likely years). They it would be in auto-pilot and I would just live my life as I pleased.

[Hawkshaw]

Originally Posted by teknochild

is that number accurate? why in gods name would someone pay an insurance company 1 million dollars to give them a yearly income of 50k for the rest of their life? you can get that much each year from 1 million dollars in no risk investments and still have the million dollars

if i was going to pay an insurance company 1 million dollars they better be paying me something more like 100k a year

That number is relatively accurate using the following assumptions:

Annuity purchase rate of 5%
A male age 35
Mortality following the unisured pensioner's mortality table from 1994 projected to 2015
Single life annuity with no guarantee period

The government of Canada long term bond rate as at Dec 31, 2006 is 4.1%, i.e., your risk free income on $1,000,000 would be $41,000 per year for the length of the bond (let's say 20 years). At the end of that period, assuming you were still alive, you would have your $1,000,000, but it would be worth about $673,000 in today's dollars assuming 2% inflation over the 20 years.

To continue your income stream, you would have to buy another bond at that point, and therefore you're taking the risk that the rate in 20 years may be lower than 4.1%. It is possible, of course, that the rate is higher in 20 years.

The purpose of the annuity is the security of the payment stream, and not taking any interest rate risk in the future. Well, unless you get into variable rate annuities, but they're a whole different beast.

If the insurance company paid you $100,000 a year for your million, they would lose money for sure. On the aggregate, they would likely become insolvent, and then you'd lose all your money.

[Hawkshaw]

Originally Posted by scottwww

There is more to what hawkshaw was saying that what he said. There are a lot of tax advantages to using insurance products. One product to consider is a single premium Variable Universal Life Insurance Policy. With this, you can take "loans" from the cash value without paying it back and without being taxed. Then the face value and any remaining cash value goes to your aires without tax. I am no expert on this, but it is the general idea. The insurance industry has a very strong lobby and have been used, especially by the wealthy, for over 100 years. I am sure there are a lot more details that I am not aware of for 8 million dollars.

In practice, the fees are higher than mutual funds, even though the cash value is similarly invested. In the end, it is life insurance. You would do well to have some. You are young and the cost of insurance should be low.

I know less about annuities than about insurance, but they may have a place in your portfolio. Generally, I wouldn't want my money in annuities except if I have exhausted my potential for tax deferred investments. The low rate of return on an annuity would push me hard into a variable annuity. Once you are in an annuity, you probably are stuck with the money there for seven years. Hopefully the laws have changed since I knew that and it would be more portable to retirement funding.

Don't put it all, or substantially all, into any one investment or even a category of investment. Talk with a good trust attorney to find out whether this would have much value for you. The people who know the most about this subject tend to be motivated to sell their products. Since they deal with people who don't care to learn what they are doing with investing, they will put it into sound-bites, a lot of schmooze, and gain your trust before they sell you what will make them money.

I would rather be in your shoes than mine as the money goes, but I would certainly take my time. It would probably be a full-time occupation until I had everything in place (most likely years). They it would be in auto-pilot and I would just live my life as I pleased.

Although there are tax advantages to UL products, the fees charged for investing and administration are generally higher than what you find investing outside of a UL product. You'd have to crunch the numbers the specific type of policy to see if it was worth it for you.

With respect to annuities in your portfolio, scottwww is right, they shouldn't be considered as an "investment option", which is why I originally said take half and buy an annuity and have fun with the rest. The annuity provides protection and security, and ensures that you don't outlive your money, or spend it all and end up broke. You can therefore enjoy the rest of the money without worrying about ever running out.

Using my previous example and assuming dude got $8 million, the annuity would pay him $220,000 a year for life, and he'd have $4 million in the bank - sounds like a decent deal to me. Although, assuming the OP is young (i.e., not 65), he may want an indexed annuity that will increase over time with inflation to keep up with the cost of living.

Good luck!