In Which We Speak of Monetary Matters

[Metaliturtle]

http://www.listenmoneymatters.com/introduction-simple-investing/

Hey all, believe it or not I am a banker, I don't want to invest for you but I want to talk about making money, saving money, earning more returns and being awesomely frugal.  I'm trained to aid in budget building, debt resolution, credit cleanup, and I'm happy to provide my expertise to this group free of charge.  I attached an article to get you thinking.

[Buster's Uncle]

Attached where?

[Metaliturtle]

put a link anyways

[Unorthodox]

http://www.listenmoneymatters.com/introduction-simple-investing/

Hey all, believe it or not I am a banker, I don't want to invest for you but I want to talk about making money, saving money, earning more returns and being awesomely frugal.  I'm trained to aid in budget building, debt resolution, credit cleanup, and I'm happy to provide my expertise to this group free of charge.  I attached an article to get you thinking.

. . . . We're actually seeking an expert...

hEt's parents both died in the last 6 months (1 sudden, 1 cancer), having never had the chance to spend their retirement, so we got a bit of cash we gotta figure out the smartest thing to do with.   Once the house sells a bit more. 

We have the house payment, and one car payment, but otherwise destroyed all our debt prior to me being out of work for 2014 (also refinanced the house payment lower prior to that, allowing us to not rack up debt despite only one income for a year).  Aside from the trip we just took that will be paid off by month's end, there is no credit card debt either (easier to travel with the credit card than the check cards in case we need to dispute things).  Mostly want to get the kid's college taken care of with it (some of it we can't touch till 65, and will become part or our retirement though), but need to know the smartest way to do that. 

We are meeting with some local people soon, too, but the expert I had been working with prior to being out of work retired, and we don't know who to trust.   

[Metaliturtle]

http://www.listenmoneymatters.com/introduction-simple-investing/

Hey all, believe it or not I am a banker, I don't want to invest for you but I want to talk about making money, saving money, earning more returns and being awesomely frugal.  I'm trained to aid in budget building, debt resolution, credit cleanup, and I'm happy to provide my expertise to this group free of charge.  I attached an article to get you thinking.

. . . . We're actually seeking an expert...

hEt's parents both died in the last 6 months, having never had the chance to spend their retirement, so we got a bit of cash we gotta figure out the smartest thing to do with.   Once the house sells a bit more. 

We have the house payment, and one car payment, but otherwise destroyed all our debt prior to me being out of work for 2014 (also refinanced the house payment lower prior to that, allowing us to not rack up debt despite only one income for a year).  Mostly want to get the kid's college taken care of with it (some of it we can't touch till 65, and will become part or our retirement though), but need to know the smartest way to do that. 

We are meeting with some local people soon, too, but the expert I had been working with prior to being out of work retired, and we don't know who to trust.   

Not sure where you currently stand, work situation, etc. but I'm attaching a graphic of a good place to get started.  Reach out to a local CPA about avoiding taxes on it and then start at the top and work your way down.  (some won't apply).  This is as specific as I can get without knowing your overall situation and goals, but if you want to make money, this will work.

[Unorthodox]

Check, check, check for both of us on the top 3.  Again, house payment and brand new car are the only debts. 

Personally, I also rolled 4 previous employers 401s into a mutual fund and...some other fund that generates enough cash to pay the fees on the mutual fund and have a bit left over to reinvest...can't recall.  All together over 100k there, have to run a report to tell you exactly (it was 100k when I rolled everything 3 years ago, I don't pay attention/care how it's doing, it's a long term investment don't need to fret over ups and downs.  It's grown, don't know how much), and have a pension being paid monthly from a previous employer. 

We're down to the purple area on what to do with the money coming in from the estate.  How do we invest?  I don't understand it all, myself with the tax things.  Roughly 150-200k tax free cash depending on what the house sells for and how much tax that's gonna run, and a bunch more that we can't touch yet without big penalties, but have to remove so much every year despite that, I don't understand that part at all.  We want to know how to translate that tax free portion into a decent start at good schoolin for the kids. 

[Unorthodox]

Oh, my parents were also big on bonds, so from age 8-16 I bought monthly $200 bonds (been working since I was 8 ) that I got no real idea what to do with and don't really usually pay attention to.  Some of them could start getting cashed in, I guess, but what letter they are and whether that's wise or not, I don't know.  There's also some various 1 and 2 shares of stock of multiple companies from my Grandpa that I similarly don't pay attention to outside the occasional check for a dime in the mail. 

[Buster's Uncle]

Is paying off those outstanding debts an option?  I understand that a lot of lenders would rather skin you with interest over the long run, but you never know who might negotiate down a little for a large lump sum of cash in hand now if you made an offer.  -And that might save you enough long-term to be worthwhile, and simplify your month-to-month finances in a gratifying way.  Your stress (or rather lack of) has intrinsic value, after all.  -And the pride of paid-up ownership and the good effect of that on your credit rating, just in case.

Father taught me a horror of debt....

[Unorthodox]

3 years ago we started the debt elimination.  Paid off one, started making extra payments with the money we saved there on another, etc.  I saw the eventual layoff coming that far in advance.  When Boeing pulled the whole pension buyout thing giving us a monthly payment now, we just put that straight toward the debt as extra payments as well.   

My last expert told me not to worry about the house.  We can afford it easily on a monthly scale.  We're at some rediculously low interest rate there anyway so it would be better to start making money work for us investing than to pay off the house. 

The car payment may be worth considering paying down/off.  It's BRAND new to the equation, we don't have a payment till August. 

[Buster's Uncle]

Daddy was a genius caveman who was wrong about a lot of things, but he was always right about money stuff - I don't have his business degree or head for numbers, but my first impulse -based in the world-view about money he taught me- in the situation you describe is kill the debt.  If you're paying through mail old-school, the very stamps and checks cost a little money.  The time spent paying has worth.  The feeling of the house is all yours is priceless. [shrugs]

[Unorthodox]

Yeah, I was raised that way too, and that's my first instinct, but the expert said otherwise on the house. 

They approach it: if you can take that same money and earn 5% interest by investing, you're better off doing that than paying down a 3% interest loan.  The maths there at least make sense. 

Now, say we were able to pay OFF both the house and car (might actually be close if closer to the 200) and then invest what would have been our monthly payment on those from that point.  Is that going to be enough to compensate for the initial loss in interest by investing the lump sum?  My maths are not so good at that point, but it would probably take decades to catch up to the compound interest. 

[Buster's Uncle]

The maths logic does seem to scan.

Of course, only you can assess the value to you of not having to worry about it anymore - but one imagines that's not a low value.

[Metaliturtle]

If paying off the house is important to you, pay it off even if the math isn't optimal.  Look into both 529 plans and coverdell educational savings accounts for the kids, you should be able to funnel additional funds into one or both of those.  Look into index funds over managed mutual funds.  Lots of times 'advisors' and 'experts' push a specific fund because it pays them more but a shop like Vanguard will be more low-cost and same-result type place.

[Unorthodox]

Eh, my credit union covers the fees for the expert I had gone to.  The mutual fund is a straight up flat monthly fee, no percentage, and no one's gonna make a killing on it as it's pretty low.  Just don't know that I trust the kid that replaced him.  I WAS talking to pretty much the president of the advisor group, but now that's someone back east and I got a newb. 

[Metaliturtle]

Newbs are ok with these kinds of things, a lot of time they'll have a better knowledge of newer products (they may lack in social niceties/norms).  It sounds to me though like you're doing better than most people I work with.  You're at the point where starting a trust may make sense (if you haven't) or investing in select businesses (either starting your own small thing or helping a local person get their shop going, or buying individual dividend stocks)  Look for dividend aristocrats, reinvest the dividends while you and hEt are still working and use the dividends as fun money when you retire.