Im getting $100k, what to do with the money?

[akyyyy]

Hey everyone, im going to get approx 100k at the end of this year in a settlement (bill 29), got wrongfully laid off by the government. Anyway, just wondering what you would do with the money. I don't mean how you would buy cars, electronics etc, lol. How would you invest it. How would you make more money from it... stuff like that.

First im going to pay off a few debits i owe, i figure ill have 90k to work with.

Thanks, looking forward in hearing your opinions.

[pitz]

First im going to pay off a few debits i owe, i figure ill have 90k to work with.


Is the $100k before, or after taxes?

If its before taxes, and you don't have a good RRSP established -- this probably would be a good time to set one up, to minimize the tax burden of adding this much money to your income.

Otherwise, to answer your question, you should provide additional details on your assets, age, any liabilities you may have (ie: family, etc.), and some of your short-term and long-term goals.

[Frankie3s]

Is the $100k before, or after taxes?

If its before taxes, and you don't have a good RRSP established -- this probably would be a good time to set one up, to minimize the tax burden of adding this much money to your income.

Otherwise, to answer your question, you should provide additional details on your assets, age, any liabilities you may have (ie: family, etc.), and some of your short-term and long-term goals.

Always good advice. Max out your rrsp's to reduce the amount of tax that you will have to pay on this. Then invest the rest in a high interest savings account if your not comfortable with risk or until you become well educated to go into the markets.

[akyyyy]

-this is before tax
-i have a wife and small child (6mnths), RESP?
-28 years old
-assets, i have a rental house.
-not much of rrsp's

-as for short term goals, pay off all debts and start a real savings account
-long term pretty much the same, stay out of debit, and increase savings.

[grant]

-as for short term goals, pay off all debts and start a real savings account
-long term pretty much the same, stay out of debit, and increase savings.
Looks like you answered your own question.

Putting your savings into RRSP makes sense if you desire to plan for your retirement.

[pitz]

Yeah.. Basically, do the following:

1) put enough into the RESP to get the CESG.
2) Pay off all non-deductible debt.
3) Contribute the rest to a RRSP within your limits.
4) Contribute to a TFSA as of 01/01/2009

RRSP should be heavily allocated to long-term equity funds, preferrably low-cost equity index funds for someone your age.

[Lyrrad0]

RRSP should be heavily allocated to long-term equity funds, preferrably low-cost equity index funds for someone your age.

However, make sure you understand the risks of equity funds so that you don't panic and change your plan if your holdings drop by 10% or more. There's no harm in the short to medium term in keeping the money in a low risk fund while you educate yourself and come up with a long term plan.

[olddog]

put a nice downpayment down on a house and stop renting.

[pitz]

put a nice downpayment down on a house and stop renting.

Ummm, why? Do you know *anything* about the market he lives in?

Thats extremely poor advice, considering Bill 29 is something in BC, and there's lots of evidence that housing prices are severely out of whack in that province.

[William W]

Depending on your investment knowledge, free time and your risk tolerance. In a market like the current one, where stocks can have great swing either way, you can put $50k aside and become a day / range trader. One can easily pick up $500/day these days in the market. I have been doing these every so often for the past couple of months.

In BC, the RE market is going down, so conserve your capital and look for bargains and desparate sellers in the coming months. That's what I and a lot of others are doing, it is IMHO that there are quite a lots of money sitting on the sideline right now.

[olddog]

Ummm, why? Do you know *anything* about the market he lives in?

Thats extremely poor advice, considering Bill 29 is something in BC, and there's lots of evidence that housing prices are severely out of whack in that province.

nope , i don't but thats not what he was asking. after typing that, i was going to add that he ensure he was better off buying than renting in his area/situation. i was just throwing it out there as something to consider.

[Icedawn]

hm, don't know much about it... but are you sure its taxable? A lot of settlements aren't actually taxable...

[JBlue]

Since you have a family. It may be a good idea to start thinking about assets (home). If you have a good deal now with rent AND do not want to move, you can always buy a NEW place and rent it out.

However not sure what the market would be like but it's slowing down. You may really catch a good deal next year or the year after.

As for investing I highly suggest you talk to a professional. Day trading is a very BAD IDEA. I do however think you should talk to a bigger bank like HSBC. Talk with their financial advisor and look at foreign markets. North American (S&P 500, NASDAQ, TSX) markets will be horrible for a long time (min 3-5 years at least most likely more).
Good luck.

[sexpuppet6000]

Start thinking about buying a house

[bembem]

put a nice downpayment down on a house and stop renting.
OP says "-assets, i have a rental house."

I'm pretty sure that he means he owns a house that he rents out, hence the asset.

Beyond that, the OP sounds like he has a solid head. Good luck with your new child, and I'm sure you'll invest the money wisely.

[William W]

As for investing I highly suggest you talk to a professional. Day trading is a very BAD IDEA. I do however think you should talk to a bigger bank like HSBC. Talk with their financial advisor and look at foreign markets. North American (S&P 500, NASDAQ, TSX) markets will be horrible for a long time (min 3-5 years at least most likely more).
Good luck.

Just curious, why is day trading a very bad idea? As we all agree, the market is pretty bad right now, and can go further south. So getting in right now with the plan to hold it long term may not be a very good idea. IMHO, if one is getting in the market right now, holding stocks like they are hot potatoes is the way to go.

Don't know whether you're aware, but stocks are doing pretty bad overseas as well. Europe is not doing too well, and Asia's (China) stock market is down in the tubes as well.

[upupnorth]

I too think it's a bad idea to suggest to someone with an 'extra' 100k to start day trading. Terrible idea. Day trading takes years to master, and only a few actually do.


Just curious, why is day trading a very bad idea? As we all agree, the market is pretty bad right now, and can go further south. So getting in right now with the plan to hold it long term may not be a very good idea. IMHO, if one is getting in the market right now, holding stocks like they are hot potatoes is the way to go.

Don't know whether you're aware, but stocks are doing pretty bad overseas as well. Europe is not doing too well, and Asia's (China) stock market is down in the tubes as well.

[fastlayne]

Given that there is no other way to provide tax shelter (ex. termination payment with tax-free transfer to RRSP), and if there are years and years of RRSP contribution room that has accumulated, then there seems to be only one choice to keep the money in your hands and away from the taxman - one big RRSP contribution.

I'd rather have the better part of 90K in my RRSP, than just 50K (after taxes) in paid down debts or cash in my chequing account.

[DrXenon]

2 chicks at the same time, man.:lol:

seriously, max out your rrsp, set up a spousal rrsp and max out that too. then put the rest in index and bond etfs with a ratio consistent with your risk tolerance.