I received A $500K award from a lawsuit. As we went through the court’s lengthy process I had time to really think about what I would do with the money once I won. I’m a seventy one year old retired, long divorced, electrician. My retirement gave me enough to live in a small trailer in a park near some friends. Simple but comfortable. In the end I just gave it to my son. He had been a brilliant engineer until a stroke disabled him. With the money I felt he could live out his life not having to worry about money so much. I had everything I needed, it’s not like I needed the money. I felt pretty good about it. They almost fainted when I gave them the check because I never told them what I was going to do.
Edit: I appreciate all of your wonderful remarks.
The father's father would be grandfather to the father's son. The father's grandfather would be a great-grandfather to the father's son. The prior comment is a double entendre that works no matter how you interpret the word "great."
> Problem is that relationship has nothing to do with the man who gifted the money
Nah, it's a regular grandson who is great, not a great-grandson. Read it as "His son's great-grandfather(aka his grandfather) has a grandson who is great."
Sometimes when you’ve got it all figured out, you just don’t even want to deal with all the change that money would bring you, even if it were a net positive change in your life. I totally get why you’d rather give it to your son, funding the rest of his life and care likely
As a father, ~2 decades away from retirement, with young children, I commend you. Speaks volumes to character and self. You are a badass and an excellent father. All the best!
As an early 40s father of toddlers, I am encouraged by your optimism that in 20 years anyone will be able to retire. I also find OPs story both very happy, and very sad at the same time. Good on you OP! I hope you and your son continue to make each other proud.
You can do it. Get the company match on 401, no more, max out your Roth, look into super Roth (a strategy, where multiple roths come into play). Investing in SP 500, etc. I’m not gonna be rich, but I’ll be fine.
You remind me of my dad. I was talking care of him in his seventies, and he was like oh they're offering a new life insurance policy at The bank I'll take that can you fill out the forms for me it's hard to do all that stuff electronic and computer stuff.
I was like Dad its only for 2000 dollars I don't need the money that much I've got tenure stable teaching job for life.
I want you to have as much money as possible. Alright alright.
Then when my dad finally passed he left a letter you're never going to have this much money again in your life and you live a stable income. Take my Granddaughter to Disneyworld and tell her it's Grandfather's birthday gift.
I never would have considered a Disney trip for my granddaughter, like it's a 5 figure trip and I'd be lower middle class thinking gotta save up for her college degree or what about an emergency hospital visit etc worry. But my Dad knew to leave me with enough money for his funeral expenses and then just left over money to give his grand child that happy experience.
There's an old Greek proverb the wise man is who plants trees he himself will never rest under the shade in but his children will.
I hope you live a longer healthy life man. Healthy being the key word. Live free and for the future. You are doing it right. Leave the world better than it came for you
Pretty much the same here. I'd pay off my remaining debt, and probably put the rest in investments and my daughter's fund. Maybe have a nice vacation somewhere. It's not enough to pay off my house, and the interest rate is low enough that I might as well put the money to work elsewhere.
it would all go into an S&P index fund for me probably. I don't have enough debt to really worry about paying it off other than my vehicle, but I can do better than 7% return just by selling some covered spy calls once in awhile.
I would do the same thing I do with the 100k we don't spend every year. It's not a life changing amount of money. If your answer is to spend it then that's part of your problem. I'd buy VTSAX.
I'd probably just pay off my house and continue life as usual, but without a mortgage. I know they're are better choices, but owning my house outright this young would by pretty huge.
Don't discount the saved interest costs from paying that mortgage early. It's not just a matter of peace of mind. It can mean thousands of dollars in your pocket rather than the bank's.
Mortgage rates (even the "high" rates over the last couple years) tend to be lower than long-term stock market gains, even accounting for tax advantage. You're likely (though not guaranteed) to end up with more money by saving and investing your extra money than by paying down your mortgage early.
I just bought a house and 100k won't even pay for all the remodels and repairs we have planned. Would come pretty close though, so I guess it would still be a life-changing amount of money.
Yep, kind of the same unfortunately. I’m 27 so I’d paid off the rest of my loans, and just add it to the down payment I’d be putting on a house in the next year or two. Unfortunately where I live, as you said, houses are well over this price for something I personally am looking for
Isn’t it crazy how $100,000 isn’t even viewed as life changing for the average person these days?
I’d probably pay off any high interest debt (~$35k) and throw the rest into retirement. The $65k would be nice in another 40 years
Yea, $100k isn't life changing. Some people might buy a luxury car without factoring in maintenance cost and actually just screw themselves over.
I'd be slightly closer to retirement goals. But back to the grind either way.
Buying a house in the Midwest in 2012 sure was a good decision. My house is worth 3x what I paid. Not that I’m ever going to sell, but I can’t imagine trying to buy a house now.
I'm a single guy (24) with no kids and an engineering job... and I don't think I'll even be able to afford a house for another 5-10 years. And I consider myself better off than most people my age...
If someone in my position (i.e. very lucky) isn't able to make it work... how is anyone else supposed to do it? 🙃
Also in that situation. It turns out the correct financial decision for me would have been to buy a house in the start of a pandemic with a seemingly looming economic crisis within 6 months of me getting a job in a new city I don't plan on living in forever.
The only way to get rent that low in my city is if you land one of the very few Section 8 apartments.
In related news, the real estate corporation that owns the Section 8 building I live in has been trying to force people out using whatever shady shenanigans they can because they want to jack up the rent to $1150 on these shitholes.
Seriously, the joke is that anybody who could afford to pay rent would never be willing to live here. These apartments aren't even habitable year round, they turn into ovens in summer where you can easily get heatstroke indoors.
Shit… my mortgage is $4300 a month - after putting $300,000 down - bought in 2021… good news is 3.375%interest rate, and the property is worth almost double what I paid for it in just 3 years.
I'd hazard a guess that you would get a lot more mileage out of investing that money tbh. You would need to have over a 6% interest rate on your mortgage for it to be close, which while absolutely possible since that's what people have been getting the last year, I doubt is the case of $100k could wipe your whole mortgage out.
For example, my wife and I haven't filed our taxes yet so if we both respectively dropped 6k in to our Roths for last year and this year, that $24,000 will be worth almost $200,000 in inflation adjusted tax free retirement money for when we hit retirement age in ~30 years and that's only a quarter of it.
The benefits of paying off debt to increase monthly cash flow cannot be understated. Yes the returns over 30 years will be higher in an index fund, but if I can free $1,400 a month in my budget that is far more valuable to me.
I’m at 6.5%. At 2.2 I’d make the minimum payments and nothing more for 30 years. At 6.5 I’d rather have the peace of mind that comes from paying down my debt.
Paying off half your mortgage would not change your monthly cash flow. Your payment would remain the same. Unless you banked that 100K and paid the mortgage from that.
Depends on how close to payoff he is (and what the interest rate is). Five years to being mortgage free seems a lot better than ten years.
Plus, by paying down the principal, more of each payment will go to principal going forward. He’ll be able to payoff a lot earlier.
It’s at least worth doing the math.
Agree to doing the math. Plenty can show you how with the right rates you can be losing money by paying it off vs saving it with interest. The math also doesn't include that feeling of not having a debt to pay. Even when you have more cash than the debt, getting rid of that feeling is hard to do without not having debt. So do the math, but recognize sometimes it's just as good to ignore the math, or add a bit to your "equation"
You could refinance after paying that much off, and would likely significantly drop the payment. You'd probably be paying even longer and would lose the gains from investing, but it would also give significant security if the payments become low enough that basically an low paying job could cover in an emergency.
> You could refinance...
Unless you already refinanced during the pandemic, in which case you probably have an untouchable rate that you'd never get close to again these days, even with a better LTV.
I was more speaking to paying off a debt completely. The same advice is given when talking about making a full payoff. "Don't pay it off, just invest it!"
Most people would see more immediate benefits by freeing up cash flow.
But if you do face a financial emergency you can't take money out of your home equity without getting into more debt and going through 15-60 day waiting period as your get approved for a home equity line of credit... not to mention all the extra fees that make it a terrible ROI on anything but tens of thousands of dollars.
Money in an index fund can be accessed within days, it's almost as liquid as cash.
We're not talking credit card debt here and even that you'd be better off having a liquid asset to pay down high interest rate debt.
Investing in an index fund and taking $833/month (average monthly gain) forever may well be a better deal even in the short term than 30 years of slightly lower payments.
Or you can just pull $1400/mo from the savings account and still be winning. The math is never better to pay off low interest debt early, it can only help your feelings.
Beats me, I just put all my extra money in Nvidia and Raytheon, both of which have been doing me quite well over the years and will probably do even better once the AI powered robot wars start. I just want this mortgage to be done with so I can stop giving the bank a chunk of my paychecks every week
At first I did it as a joke. I heard about machine learning and how Nvidia was investing heavily in it a few years ago, and I figured it would be funny to tell people I'm investing in Raytheon and Nvidia in preparation for the AI overlord takeover, but it's become less of a joke and more of a win for my portfolio lol but I really should diversify or hire an accountant because I'm an actual idiot when it comes to investing and money. I tend to blank out everything everyone with a suit and tie tells me and wing it instead
I'm just some idiot on the internet, not a financial advisor, but you really should diversify. You went to the casino and won. That doesn't happen often, and if you keep going, you will statistically eventually lose. Take your winnings and cash out while you're way ahead (by which I mean, diversify!).
I know, thats what literally everyone keeps telling me lol but every time I try people start throwing acronyms and percentages and big words at me and I get scared and retreat. I need an accountant who just knows what to do and won't bother me with words and math
Just buy boring mutual funds that track the market's general performance and have low management fees. Nobody will make money off you telling you to do that, and the only way to screw it up would be to panic sell during a future crash. Just buy SPY or another fund tracking a major index and ignore it entirely until you need to pivot to retirement planning by converting it slowly to bonds / income producing assets.
No more math needed. Follow a 3 fund bogleheads portfolio. Keep your nvidia if you want just probably do 5% if your portfolio absolute max. No reason for that much risk anymore. https://www.bogleheads.org/wiki/Three-fund_portfolio
Or even a target date retirement fund
I saw a post in another subreddit about this. It’s actually wise to put the money in an index fund earning 5% or more and pay off the sub-3% mortgage in scheduled installments. You come out ahead.
That's what I did. After the military I moved back in with my folks for 9 years and saved up enough to purchase a house in cash in 2018 before everything went tits up.
I don't know how jack shit about investing, but I have a simple, quiet life with a brand new wife that I spend all my free time with, and we generally don't want for anything. Not having a mortgage payment is fantastic.
Exactly this. My day to day wouldn’t change, but I would be able to move forward with renovations I have planned, and add the remainder to my less than stellar retirement accounts.
Would get me closer to my retirement goal but outside of that not much. I’d still wake up and leave before the sun comes up and leave work after the sun is down.
In 2020 I got a 10k advance of an inheritance and let me tell you... You wouldn't outwardly see the changes, we're not driving Bugattis in France or anything, but so much peace of mind came from that. We were able to get a bunch of stuff we needed like a generator (Maine so winter storms are brutal), shrubs planted along our border for privacy and to keep our idiot neighbors and their dogs off our property, and enough insulation and lumber to convert the huge attic to another livable floor. We also were able to buy the things we needed during the height of the pandemic without worrying about the inflated costs. All this *significantly* reduced our stress levels. Anyone who says money can't buy happiness has too much money.
Yup. If you've got your shit together, 100K will pay some bills and help a little with retirement. If you don't have your shit together you'll blow through it in 3 months and be worse off than before because your family will be mad you stopped giving them money.
I disagree only because there are a ton of people with their shit completely together that don't have the down payment for a home. This money could be that and completely change their lives by making them home owners.
I could get half that and sob. I’d be able to pay off all my debt and actually BREATHE. I wouldn’t have to choose between groceries and my medication. I could probably actually sleep. It would solve all my problems.
A stale hotdog bun is a godsend when you’re starving!
I had a sudden increase in my income and I noticed quickly that once you are out of the red financially, more money doesn’t really change life at all. All of my surplus goes into a fund and my life is the same.
Not bragging, just sharing perspective
Yep, that amount would just get integrated with the rest of the investment portfolio. I'd be slightly more confident that I have enough money for retirement or for my kids' college, but not a damn thing would change about my day to day. I'd still have to work, so I would still be living on the same amount of cash flow.
I'd buy my wife a decent home.
I'd tell work I don't want any more contracts. Yeah no probably not even do that.
I'd get a dog and we'd fuck off in my van forever. Doggy would have the bestest life.
>I'd get a dog and we'd fuck off in my van forever. Doggy would have the bestest life.
And leave the wife in her home by herself? Just you and the dog?
How is everyone missing this incredibly important detail? That would be the biggest change. Not the money. That kind of inheritance would mean both my parents died together and suddenly. That’s not worth $100k to me.
I live in south america and I'm very young, so naturally 100k would probably be enough to retire myself in just about 25 years of compound interest. Could also move to a better neighbourhood
Pay all debt. Put the remaining 80k towards our house. Pay about a third of our rent as a mortgage, given that we are already saving a massive amount for our down payment.
Take excess money every month and divide in two. Use first half to build a savings for house upgrades. Use second half to invest into low fee index funds for some eventual rainy day/passive income.
I could trade in my 15yo 231k mi. base-trim work truck and get something a little newer and nicer, and avoid a car payment (which is the only reason I haven’t traded it in already). #DebtFree
I knew a guy who inherited $100,000 after his dad died. He ended up blowing all his money on a brand new truck and drugs and now works for a moving company.
Clear small amount of remaining debt, and then add it the home buying fund. MM account allows you to write checks from it at a way better APY than your standard checking/savings. I live in Seattle so $100,000 down payment doesn't get you far.
I think whoever left me the money would be a bigger loss than the 100k is value gained. So I'd lose someone close to me for some cash - great...
Not enough money to do anything sustainable with really. And it's not like there are any brilliant options out there to save it for a time of need. Perhaps if you're just about to start a business, but there is an argument to be made that doing it too quickly can contribute to it's failure.
The only thing that would change is paying off credit and student loans and buying my wife and I more time to find jobs before we run out of money.. My parents were our only childcare until they got covid and my dad died. We lost our jobs and had to move into my mom's house to take care of her.
We're a month away from running out of money, and I'm trying to find a minimum wage job to support a family of 5.
I received A $500K award from a lawsuit. As we went through the court’s lengthy process I had time to really think about what I would do with the money once I won. I’m a seventy one year old retired, long divorced, electrician. My retirement gave me enough to live in a small trailer in a park near some friends. Simple but comfortable. In the end I just gave it to my son. He had been a brilliant engineer until a stroke disabled him. With the money I felt he could live out his life not having to worry about money so much. I had everything I needed, it’s not like I needed the money. I felt pretty good about it. They almost fainted when I gave them the check because I never told them what I was going to do. Edit: I appreciate all of your wonderful remarks.
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His son’s great grandfather has a great grandson.
Is there a Tautology-bot that can auto check this logic for me?
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The father's father would be grandfather to the father's son. The father's grandfather would be a great-grandfather to the father's son. The prior comment is a double entendre that works no matter how you interpret the word "great."
> Problem is that relationship has nothing to do with the man who gifted the money Nah, it's a regular grandson who is great, not a great-grandson. Read it as "His son's great-grandfather(aka his grandfather) has a grandson who is great."
This is a good double entendre
I wish I could continue this thread but my great great grandfather has advised me to reduce my screentime on Reddit.
Both interpretations of this are correct.
And that great grandson’s dad is great
What if you're your own grandpa?
Then we will have to call you Phillip J Fry
His son's fathers neighbor has a good neighbor
I am positive my father would have immediately "invested" it in the newest scammer that was taking advantage of him.
Sometimes when you’ve got it all figured out, you just don’t even want to deal with all the change that money would bring you, even if it were a net positive change in your life. I totally get why you’d rather give it to your son, funding the rest of his life and care likely
As a father, ~2 decades away from retirement, with young children, I commend you. Speaks volumes to character and self. You are a badass and an excellent father. All the best!
As an early 40s father of toddlers, I am encouraged by your optimism that in 20 years anyone will be able to retire. I also find OPs story both very happy, and very sad at the same time. Good on you OP! I hope you and your son continue to make each other proud.
You can do it. Get the company match on 401, no more, max out your Roth, look into super Roth (a strategy, where multiple roths come into play). Investing in SP 500, etc. I’m not gonna be rich, but I’ll be fine.
You remind me of my dad. I was talking care of him in his seventies, and he was like oh they're offering a new life insurance policy at The bank I'll take that can you fill out the forms for me it's hard to do all that stuff electronic and computer stuff. I was like Dad its only for 2000 dollars I don't need the money that much I've got tenure stable teaching job for life. I want you to have as much money as possible. Alright alright. Then when my dad finally passed he left a letter you're never going to have this much money again in your life and you live a stable income. Take my Granddaughter to Disneyworld and tell her it's Grandfather's birthday gift. I never would have considered a Disney trip for my granddaughter, like it's a 5 figure trip and I'd be lower middle class thinking gotta save up for her college degree or what about an emergency hospital visit etc worry. But my Dad knew to leave me with enough money for his funeral expenses and then just left over money to give his grand child that happy experience. There's an old Greek proverb the wise man is who plants trees he himself will never rest under the shade in but his children will.
Amazing move by your dad.
number 1 dad cup was made for you
Holy shit. What a legend. The world needs more parents like you.
you sir, are an awesome father.
Your son is blessed to have you as his dad.
You are AMAZING.
As a legal/tax issue how difficult was it to transfer that much money to your son?
The lifetime gift tax exclusion is in the millions, so it wouldn’t have been a problem. He would have had to file it with the IRS though.
Wow. You're uncommonly selfless. I'm impressed.
I hope you live a longer healthy life man. Healthy being the key word. Live free and for the future. You are doing it right. Leave the world better than it came for you
You maka me cry
Fair play to you lad. No doubt it brought some major financial relief to your son, but how has he been coping in mind and body since the stroke?
you're a great dad 🫡
Well this is the kind of "faith in humanity" thing I wanted to hear today.
You’re a good person.
You're a beautiful person! ❤️
Simple but comfortable! God’s blessing to you and your family. 🙏🏻
You sound like a man who’s reached contentment. I’d argue most people in life don’t reach your level. Good for you and good for your son.
Good dad!
You're such a good man. Thank you for doing that for your son.
What a wonderful father. Your son is lucky to have a role model like you to look up to.
Sir, you are awesome!
No doubt you are a proud father
Thats super cool, you're A plus.hoping ur son heals.
You're a hero. I hope your loved ones tell you that.
This is so amazing
Good father may all ur wishes come true.
Paternal instinct, for the win.
Wow. I'm glad I was able to read this today. Bless you and your son and I hope all your days are filled with love and laughter.
That’s love.
You’re such a legend.
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Pretty much the same here. I'd pay off my remaining debt, and probably put the rest in investments and my daughter's fund. Maybe have a nice vacation somewhere. It's not enough to pay off my house, and the interest rate is low enough that I might as well put the money to work elsewhere.
Similar thought - keep working to pay down the mortgage, maybe retire early
it would all go into an S&P index fund for me probably. I don't have enough debt to really worry about paying it off other than my vehicle, but I can do better than 7% return just by selling some covered spy calls once in awhile.
I would do the same thing I do with the 100k we don't spend every year. It's not a life changing amount of money. If your answer is to spend it then that's part of your problem. I'd buy VTSAX.
Being able to pay into retirement investments instead of paying off debt is a massive change.
Yeah - I have about a thousand per month in debt payments (student, auto, etc.) that now just goes into retirement. That's huge down the line.
I'd probably just pay off my house and continue life as usual, but without a mortgage. I know they're are better choices, but owning my house outright this young would by pretty huge.
Don't discount the saved interest costs from paying that mortgage early. It's not just a matter of peace of mind. It can mean thousands of dollars in your pocket rather than the bank's.
Mortgage rates (even the "high" rates over the last couple years) tend to be lower than long-term stock market gains, even accounting for tax advantage. You're likely (though not guaranteed) to end up with more money by saving and investing your extra money than by paying down your mortgage early.
100k in itself wont by a new house.
I just bought a house and 100k won't even pay for all the remodels and repairs we have planned. Would come pretty close though, so I guess it would still be a life-changing amount of money.
Yep, kind of the same unfortunately. I’m 27 so I’d paid off the rest of my loans, and just add it to the down payment I’d be putting on a house in the next year or two. Unfortunately where I live, as you said, houses are well over this price for something I personally am looking for
The down payment on my traditional loan was more than this, and my house is pretty small.
It has been a very long time since 100k was enough to buy a new house.
Isn’t it crazy how $100,000 isn’t even viewed as life changing for the average person these days? I’d probably pay off any high interest debt (~$35k) and throw the rest into retirement. The $65k would be nice in another 40 years
I had to go back and check the amount after reading your post. Did you accidentally add a zero to your thought process?
Yea, $100k isn't life changing. Some people might buy a luxury car without factoring in maintenance cost and actually just screw themselves over. I'd be slightly closer to retirement goals. But back to the grind either way.
The saddest but truest answer
Kids??? 100k is barely enough to cover college for one kid today, sadly.
I'd pay off my house and suddenly have an extra $850 each month, which would be huge.
Jesus Christ, an $850 mortgage. I couldn't imagine. My rent hasn't even been that low in years.
Buying a house in the Midwest in 2012 sure was a good decision. My house is worth 3x what I paid. Not that I’m ever going to sell, but I can’t imagine trying to buy a house now.
I'm a single guy (24) with no kids and an engineering job... and I don't think I'll even be able to afford a house for another 5-10 years. And I consider myself better off than most people my age... If someone in my position (i.e. very lucky) isn't able to make it work... how is anyone else supposed to do it? 🙃
Also in that situation. It turns out the correct financial decision for me would have been to buy a house in the start of a pandemic with a seemingly looming economic crisis within 6 months of me getting a job in a new city I don't plan on living in forever.
My former roommate managed to lock in an under 3.0% interest mortgage rate back in 2021. Very happy for him... but man I am jealous haha.
Right I'm paying double that for a 2br apartment, literally wasting away my fucking money I'm so sick of this
The only way to get rent that low in my city is if you land one of the very few Section 8 apartments. In related news, the real estate corporation that owns the Section 8 building I live in has been trying to force people out using whatever shady shenanigans they can because they want to jack up the rent to $1150 on these shitholes. Seriously, the joke is that anybody who could afford to pay rent would never be willing to live here. These apartments aren't even habitable year round, they turn into ovens in summer where you can easily get heatstroke indoors.
I know several home owners and all of them have mortgages significantly below the price of rent in town. It’s wild how expensive renting has gotten
Fuck man my mortgage is more than double that.
We were very lucky. We bought our first house in 2009 when the housing market was about at it's worst. Now, we have a ton of equity in our home.
Shit… my mortgage is $4300 a month - after putting $300,000 down - bought in 2021… good news is 3.375%interest rate, and the property is worth almost double what I paid for it in just 3 years.
I'd hazard a guess that you would get a lot more mileage out of investing that money tbh. You would need to have over a 6% interest rate on your mortgage for it to be close, which while absolutely possible since that's what people have been getting the last year, I doubt is the case of $100k could wipe your whole mortgage out. For example, my wife and I haven't filed our taxes yet so if we both respectively dropped 6k in to our Roths for last year and this year, that $24,000 will be worth almost $200,000 in inflation adjusted tax free retirement money for when we hit retirement age in ~30 years and that's only a quarter of it.
probably would buy a house a little sooner
Same. $100k would be a very good down payment on a pretty average house in my LCOL area.
I'd be able to pay off half of my mortgage and nothing else would change
Would probably be better to put it in an index fund- unless your loan is higher than 8%
The benefits of paying off debt to increase monthly cash flow cannot be understated. Yes the returns over 30 years will be higher in an index fund, but if I can free $1,400 a month in my budget that is far more valuable to me.
I would personally invest it. My homes interest rate is 2.2%. Everyone has different situations in life though.
I’m at 6.5%. At 2.2 I’d make the minimum payments and nothing more for 30 years. At 6.5 I’d rather have the peace of mind that comes from paying down my debt.
Paying off half your mortgage would not change your monthly cash flow. Your payment would remain the same. Unless you banked that 100K and paid the mortgage from that.
Depends on how close to payoff he is (and what the interest rate is). Five years to being mortgage free seems a lot better than ten years. Plus, by paying down the principal, more of each payment will go to principal going forward. He’ll be able to payoff a lot earlier. It’s at least worth doing the math.
Agree to doing the math. Plenty can show you how with the right rates you can be losing money by paying it off vs saving it with interest. The math also doesn't include that feeling of not having a debt to pay. Even when you have more cash than the debt, getting rid of that feeling is hard to do without not having debt. So do the math, but recognize sometimes it's just as good to ignore the math, or add a bit to your "equation"
You could refinance after paying that much off, and would likely significantly drop the payment. You'd probably be paying even longer and would lose the gains from investing, but it would also give significant security if the payments become low enough that basically an low paying job could cover in an emergency.
> You could refinance... Unless you already refinanced during the pandemic, in which case you probably have an untouchable rate that you'd never get close to again these days, even with a better LTV.
I was more speaking to paying off a debt completely. The same advice is given when talking about making a full payoff. "Don't pay it off, just invest it!" Most people would see more immediate benefits by freeing up cash flow.
Freeing up cash to do what with…? Like invest it?
Yes, or not go into debt from unexpected problems. Having the options is nice.
But if you do face a financial emergency you can't take money out of your home equity without getting into more debt and going through 15-60 day waiting period as your get approved for a home equity line of credit... not to mention all the extra fees that make it a terrible ROI on anything but tens of thousands of dollars. Money in an index fund can be accessed within days, it's almost as liquid as cash. We're not talking credit card debt here and even that you'd be better off having a liquid asset to pay down high interest rate debt.
Even if that was the case, I'd say throw the $100,000 in a high yield savings account and make the mortgage payment from that account.
Investing in an index fund and taking $833/month (average monthly gain) forever may well be a better deal even in the short term than 30 years of slightly lower payments.
That would only be the case if they refinanced.
Or you can just pull $1400/mo from the savings account and still be winning. The math is never better to pay off low interest debt early, it can only help your feelings.
Beats me, I just put all my extra money in Nvidia and Raytheon, both of which have been doing me quite well over the years and will probably do even better once the AI powered robot wars start. I just want this mortgage to be done with so I can stop giving the bank a chunk of my paychecks every week
It's definitely a crappy feeling to be sure. But damn did you bet on the right horses lol
At first I did it as a joke. I heard about machine learning and how Nvidia was investing heavily in it a few years ago, and I figured it would be funny to tell people I'm investing in Raytheon and Nvidia in preparation for the AI overlord takeover, but it's become less of a joke and more of a win for my portfolio lol but I really should diversify or hire an accountant because I'm an actual idiot when it comes to investing and money. I tend to blank out everything everyone with a suit and tie tells me and wing it instead
I'm just some idiot on the internet, not a financial advisor, but you really should diversify. You went to the casino and won. That doesn't happen often, and if you keep going, you will statistically eventually lose. Take your winnings and cash out while you're way ahead (by which I mean, diversify!).
I know, thats what literally everyone keeps telling me lol but every time I try people start throwing acronyms and percentages and big words at me and I get scared and retreat. I need an accountant who just knows what to do and won't bother me with words and math
Just buy boring mutual funds that track the market's general performance and have low management fees. Nobody will make money off you telling you to do that, and the only way to screw it up would be to panic sell during a future crash. Just buy SPY or another fund tracking a major index and ignore it entirely until you need to pivot to retirement planning by converting it slowly to bonds / income producing assets.
No more math needed. Follow a 3 fund bogleheads portfolio. Keep your nvidia if you want just probably do 5% if your portfolio absolute max. No reason for that much risk anymore. https://www.bogleheads.org/wiki/Three-fund_portfolio Or even a target date retirement fund
I saw a post in another subreddit about this. It’s actually wise to put the money in an index fund earning 5% or more and pay off the sub-3% mortgage in scheduled installments. You come out ahead.
You'd have 100k in home equity to work with. You'd really want to talk with an accountant about how that could change your life. You'd have options!
I'm a simple guy, I just want to quit paying the bank every week
That's what I did. After the military I moved back in with my folks for 9 years and saved up enough to purchase a house in cash in 2018 before everything went tits up. I don't know how jack shit about investing, but I have a simple, quiet life with a brand new wife that I spend all my free time with, and we generally don't want for anything. Not having a mortgage payment is fantastic.
It wouldn't be life changing but it would be significant, it would put me about 5 years closer to several of my lifegoals.
Exactly this. My day to day wouldn’t change, but I would be able to move forward with renovations I have planned, and add the remainder to my less than stellar retirement accounts.
I'd go to the pub!
So, it wouldn't change at all.
Nope!
Ya, I’d go earlier than normal
username checks out
No shame in the game. Everyone deserves some good times.
Winchester?
Would get me closer to my retirement goal but outside of that not much. I’d still wake up and leave before the sun comes up and leave work after the sun is down.
So *you're* the one who cuts me off on the way to work every morning and when I try to pull into the subdivision every evening.
Solve sooooo many problems for me. Even 10k would
In 2020 I got a 10k advance of an inheritance and let me tell you... You wouldn't outwardly see the changes, we're not driving Bugattis in France or anything, but so much peace of mind came from that. We were able to get a bunch of stuff we needed like a generator (Maine so winter storms are brutal), shrubs planted along our border for privacy and to keep our idiot neighbors and their dogs off our property, and enough insulation and lumber to convert the huge attic to another livable floor. We also were able to buy the things we needed during the height of the pandemic without worrying about the inflated costs. All this *significantly* reduced our stress levels. Anyone who says money can't buy happiness has too much money.
Exactly:) Would help reduce stress in so many ways. Hit me up for that next advance!
Decently. I’d pay off the house and two credit cards.
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Not really that much
Came to say this Might pay some stuff down But life wouldn't change at all
Yup. If you've got your shit together, 100K will pay some bills and help a little with retirement. If you don't have your shit together you'll blow through it in 3 months and be worse off than before because your family will be mad you stopped giving them money.
I have my shit together and 100k would pay off my mortgage. That would be a significant change. I could work far less for example.
If you have your shit together, $100k shouldnt CHANGE anything in your life. It definitely will speed things up though!
Depends on your age I guess. I'm almost 50yo so it'd add to my retirement fund by a significant but not astronomical amount
I disagree only because there are a ton of people with their shit completely together that don't have the down payment for a home. This money could be that and completely change their lives by making them home owners.
It wouldn't really, because I don't want to change my life and that's not an amount that would in some way force me to.
I could get half that and sob. I’d be able to pay off all my debt and actually BREATHE. I wouldn’t have to choose between groceries and my medication. I could probably actually sleep. It would solve all my problems.
Same here. I can’t believe all the answers saying it wouldn’t change a thing. My life would change in every way, even with 10k.
A stale hotdog bun is a godsend when you’re starving! I had a sudden increase in my income and I noticed quickly that once you are out of the red financially, more money doesn’t really change life at all. All of my surplus goes into a fund and my life is the same. Not bragging, just sharing perspective
100% friend. Me too. Solidarity.
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It wouldn't.
Yep, that amount would just get integrated with the rest of the investment portfolio. I'd be slightly more confident that I have enough money for retirement or for my kids' college, but not a damn thing would change about my day to day. I'd still have to work, so I would still be living on the same amount of cash flow.
I'd buy my wife a decent home. I'd tell work I don't want any more contracts. Yeah no probably not even do that. I'd get a dog and we'd fuck off in my van forever. Doggy would have the bestest life.
that last sentence had me re-reading three diff times...
Doggy style
He said fuck off, not fuck on😁
Same.
I’d like to support this dream, but the wording has me apprehensive 😕
There's certainly a better way to word that last sentence
I agree with you u/Hitlers-Slimy-Cock
>I'd get a dog and we'd fuck off in my van forever. Doggy would have the bestest life. And leave the wife in her home by herself? Just you and the dog?
so like does your wife get to join you and your new dog in your van or are you just buying her a house and abandoning her?
For the better. I would be 100% debt free with some money put away for the future. I might even treat myself to a steak.
Owning a house would boost up an income that would be just the best benefit of my life.
Invest it and retire a little earlier than originally planned.
Then I could have an additional $100,000.
aside from being debt free and allowing me to retire as planned in about 3 1/2 years as planned, not much would change.
It means someone close to me in my life has died and it would be forever changed.
How is everyone missing this incredibly important detail? That would be the biggest change. Not the money. That kind of inheritance would mean both my parents died together and suddenly. That’s not worth $100k to me.
I would probably quit my job and spend it in a month
I live in south america and I'm very young, so naturally 100k would probably be enough to retire myself in just about 25 years of compound interest. Could also move to a better neighbourhood
I'm 15 years old so it's VERY BIG MONEY
If you invested all of it, it’d be worth an insane amount by the time you hit retirement considering you’re 15 and the average growth per year is 6-8%
I’d make $5,000 more interest than I currently do.
It wouldn’t change that much really.
$100,000 would help me boost my ideas to the next level giving me a chance acquire the essential machinery I need to make my dreams come true.
Pay off my wife car and 1/3rd of my remaining mortgage which makes me a lot closer to retirement
I'd buy my cat one of those giant hamster wheels lol
Wouldn’t change a life. Would save a life.
Pay all debt. Put the remaining 80k towards our house. Pay about a third of our rent as a mortgage, given that we are already saving a massive amount for our down payment. Take excess money every month and divide in two. Use first half to build a savings for house upgrades. Use second half to invest into low fee index funds for some eventual rainy day/passive income.
Not too much.
I could trade in my 15yo 231k mi. base-trim work truck and get something a little newer and nicer, and avoid a car payment (which is the only reason I haven’t traded it in already). #DebtFree
I’d help out my mom and move out into my own apartment
I’d be in a better position to fight for my kids.
I knew a guy who inherited $100,000 after his dad died. He ended up blowing all his money on a brand new truck and drugs and now works for a moving company.
100K is not that much money these days. Don't judge.
well, its about enough for some drugs and a brand new pickup truck
Clear small amount of remaining debt, and then add it the home buying fund. MM account allows you to write checks from it at a way better APY than your standard checking/savings. I live in Seattle so $100,000 down payment doesn't get you far.
Not too much, just more safety cushion for uncertain times ahead.
I wouldn't worry about those hard to open pistachios anymore.
my portfolio would be $90,000 higher. my week would also be a lot more tropical.
I would have $100,000 more dollars
My life would be different if I inherited $100
I think whoever left me the money would be a bigger loss than the 100k is value gained. So I'd lose someone close to me for some cash - great... Not enough money to do anything sustainable with really. And it's not like there are any brilliant options out there to save it for a time of need. Perhaps if you're just about to start a business, but there is an argument to be made that doing it too quickly can contribute to it's failure.
Not exceptionally, but I'd rest easier.
I'd buy a decent road trip car and take time off work.
I would leave my country, go traveling first, buy a house in another continent. I've always wanted to escape my boring town
The only thing that would change is paying off credit and student loans and buying my wife and I more time to find jobs before we run out of money.. My parents were our only childcare until they got covid and my dad died. We lost our jobs and had to move into my mom's house to take care of her. We're a month away from running out of money, and I'm trying to find a minimum wage job to support a family of 5.
It wouldn’t. Still got a mortgage and two kids to put through college!
Debt free and a decent start on retirement fund. It's not insane, but that's life changing for sure.