Financial Stewardship

[Cruciferi]

I have an investment advisor who looks after my 401k. He works for a reputable company and has done a good job over the years. He is insistent that I need to invest this money.

Your retirement is top priority. There are safer ways to invest than others.

Your advisor is probably not going to advocate risky options. Consider a money market account and mutual funds. It wouldn’t be a bad time to consider high dividend stocks either.

 

[Beryllos]

Nobody mentioned prepaying a bit of your home mortgage. Pros and cons: it shortens your payment schedule and lowers your future interest payments, but consequently reduces your home interest tax deduction. You might want to run that by your financial advisors.

 

[Beryllos]

I think what’s stressing me out is feeling like I have to decide right now. That it’s somehow wrong to have it sit in the bank because of inflationary loss.

Look at it another way: inflation is pretty low at the moment, in the US, and inflationary loss is somewhat predictable. Market losses can be much greater and totally unpredictable. Between the two, inflationary loss gives me more peace of mind.

 

[Cor_ad_Cor]

Another option to consider would be investing it and then using the earnings for charitable purposes.

 

[MrsAngelala]

You have an established pattern for how you manage money. If you’re comfortable with your pattern, a windfall doesn’t need to be treated any differently. Keep in mind that if you decide to invest, you don’t have to tie it up in a retirement account. You can go to any investment firm, tell them your goals and your capital, and they’ll come up with a plan for you – and do all of the trading. You don’t need to understand anything more than your risk tolerance and how to enter the capital gains form into your taxes.

I think that if you are square with God in giving it all away, meaning you’re not doing it out of fear or for some sinful reason, that is a wonderful, beautiful thing to do.

 

[la_petit_fleur]

You can go to any investment firm, tell them your goals and your capital, and they’ll come up with a plan for you – and do all of the trading. You don’t need to understand anything more than your risk tolerance and how to enter the capital gains form into your taxes.

Shouldn’t I understand what’s going on before I turn my money over? Even though my guy is good, and can make the investments for me?

 

[twf]

Also, if you invest some of it, you could commit to giving a tithe (or some other percentage) of the earnings to the Church and charity… that way you’re doing good with it for years to come.

 

[MrsAngelala]

What do you mean by “understand”? How deep does that need to go? If you want to invest a lot of time in learning investing from the ground up, you could do the investing yourself, but unless you find it interesting I would question the necessity. If you want a basic understanding, just subscribe to a financial magazine and you’ll pick it up (really! that’s all it takes!). Stocks and bonds carry risk, but if you’re investing with any major firm, you’re not going to be looking at the kind of personal risk it sounds like you might be afraid of. Nobody’s going to embezzle from you.

I learned a lot about this stuff in earning my finance degree. I’ve found I don’t use it. Am I correct in presuming you already have a career? My stance on this is that I do what I’m good at (I’m a liturgical musician), and I let other people do what they’re good at.

 

[Dorothy]

Over and above your usual prayers, spend a few minutes a day asking the Lord for guidance as to what to do.

 

[otjm]

For starters, you may want to contact a financial advisor (one who does not sell investments) and have a long chat about retirement.

I have not read all the posts, but you need someone who can do some math for you.

In your first post you do not say your age nor if you are married (or if there is any likelihood of marriage in the future). Those leave big gaps in important information.

People are living longer and longer. Some are doing quite well in “old age” and some not so well. You don’t mention anything about any relatives (which can be a bit of general information as to how old you might live to.

Some things you should address with the advisor: health care issues; retirement issues such as what you might want reasonably to do in the future; how long you might be projected to be in good health and for how long in retirement; what happens if you move to a retirement facility and what projected costs might be like for that; what projected costs might be if you have to go to an assisted living facility, and how long you might be in one until death.

You also might inquire about the various types of insurance and insurance related products, such as annuities; ;and make sure the financial adviser has experience and training in this as some are great, some are good, and some not so good.

Not knowing your financial condition, it may be that after retirement you might want to travel some, including the possibility of going on one or more pilgrimages, for example, to the Holy Land. careful administration of your current retirement funds plus some of the suggestions herein might make that available; - and last I recalled, no one suggested that was less than pleasing to God.

And ultimately you may have the ability as part of financial planning to contribute, as part of your estate, to various works of charity or to education.

You have been blessed with an opportunity. Getting a good non-selling financial planner, and a good attorney is my best advice.

 

[VonDerTann]

Do NOT just give it away. Do not. Many reasons:

Whoever left you this wanted you to have it, not someone else. More importantly, there’s a great scene in “Its a Wonderful Life” where George Bailey says words to the effect of, “do you know how long it takes a working man to save $500?” Further, life brings all sorts of needs for money they are unforeseen - the minute you give it all away, what happens when you need it?

I would argue that giving it away is one of the most improvident things you could do. Money is a tool. Just as you can use a hammer to build something or smash something, money can do a lot for you, and giving it away is just surrendering to fear.

What I would do? Pay your mortgage off immediately.

A paid-off mortgage gives you enormous flexibility in the future; it also makes sure that no matter what else happens to you, your home is your home. Further, “not paying off your mortgage so you can keep the tax deduction” had been largely (perhaps completely) debunked as financially unsound by people like Dave Ramsey. Recall also that when you pay a debt you earn interest at the rate the debt was accruing interest at, so paying your mortgage off will at least earn you more than, say, stashing it in a savings account.

I have known a great many successful people and a lot of folks who have struggled financially. I have never meant anyone with a paid off mortgage who regretted paying it off.

 

[Lara]

I agree. I’d pay a chunk into the mortgage. Check the rules on how much you can diminish the mortgage by per year until the mortgage is finished.

Instead of charity, think of ways to make the money multiply. For instance, you may choose a bigger house and rent out some rooms. That way you make some people happy and you can give some of that money away. Or take out a mortgage on an apartment building. You will have to look at your skills and see if you can make your talents multiply, as it says in the Bible.

If you invest in things like mutual funds, think of the sorts of companies involved and ask yourself if you can come up with your own company that can give you that rate of return plus some more. Can you help put people to work in a Covid economy? For instance, maybe you can buy a truck and help people move. Can you make this pay? Or buy an older car and see if you can start a grocery delivery service.

Use what you have to leverage your future.

 

[JanR]

If you do hire a financial advisor, two things to make certain of:

1, that the financial advisor is a fiduciary, that is, morally and legally obligated to work in the client’s best interests, and

2, that he or she is fee-based and not commission-based. There’s less temptation to just sell things to you for the purpose of increasing a commission if they are fee-based, instead.

The advice to pay off your mortgage is probably the best you’ve received, thus far. Your home will be free and clear of the loan that’s on it, though you will still have to pay property taxes, so your home will never be completely free and clear. Miss paying those taxes, and the county can take it away from you and sell it. That’s another thing to consider – try to invest some of that money so that you’ll always have enough income to pay taxes.

You’ve been most blessed to have received this windfall. Pray for the best wisdom for using it.