No tax issues that I can foresee. *Part of the windfall is long term capital gain from the sale of a company where I was a minority owner. *Part is an inheritance below the estate tax threshold as far as I know.
We recently sold the big city condo and bought a nice home in a quiet suburb for the same money. *It's tough adjusting to life outside the city. *Still dreaming of the mountain home. *
Plan is to invest the total pot in a well diversified portfolio and build the dream mountain home when we can do it without jeopardizing financial independence. *Financial independence is our top priority after good health. *Since I tend to worry, I will continue to work until I have the cash to build the dream house and feel my family is very well protected.
So back to the immediate issue - What to do with the substantial windfall?
Thanks *Peter76 and BigMoneyJim for your early thoughts.
Off on a business trip for several days - look forward to reading any more responses late next week.
No doubt you will get plenty of responses. In short, you should invest in a diversified portfolio that will grow over time, throw off some income, and not move entirely in the same directiion (up or down) all at once. To get there, you need to do some reading and bone up so that you feel comfortable with the choices you make. If you simply adopt someone else's approach without doing the research, you run the risks of copying an approach that doesn't match your needs/risk tolerance, and you are apt to panic when the bad times come (and they always do). If you have done the reading and gotten comfy with your approach, you are more likely to pick a suitable portfolio and stick with it.
Personally, what I would do is this:
20% bonds - 3/4 short/intermediate domestic, 1/4 unhedged foreign bonds
20% international equity - 3/4 EAFE, 1/4 developing
5% REIT/real estate
20% S&P 500/large cap domestic equity
10% mid cap domestic equity
15% small cap domestic equity