Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 06-17-2009, 02:55 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
bbbamI's Avatar
 
Join Date: Dec 2006
Location: Dallas 'burb
Posts: 9,039
Quote:
Originally Posted by HFWR View Post
Spend 90% on sex, drugs, and rock-n-roll, then waste the rest...
Save a few bucks for penicillin....
__________________

__________________
There's no need to complicate, our time is short..
bbbamI is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-17-2009, 04:29 PM   #22
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
I'd warn him that he's likely to get bombarded with offers to help him manage his money and telling him he needs to act fast. He needs to be cautious and skeptical, and remember they they all make money for themselves with his money. He can stick the money in a couple of savings accounts until he really knows what he wants to do with it.

Coach
__________________

__________________
Coach is offline   Reply With Quote
Old 06-17-2009, 05:22 PM   #23
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
I suggest he read the "Four Pillars" book cited above, or at least thumb through "Investing for Dummies," which should give him a broad (admittedly shallow) background about the concepts behind investing--asset allocation, determining risk tolerance, age-appropriate allocations, etc. so he'll know what people are talking about as he makes decision.

Cool that your family gets to enjoy watching him play professionally! And nice that he can finish his degree on MLB's dime when he's ready!
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 06-17-2009, 05:31 PM   #24
Recycles dryer sheets
Culture's Avatar
 
Join Date: Apr 2007
Posts: 491
Realistically, a 21 yo concentrating on a career in MLB is not going to spend the time to learn investing. They need to find a hourly investment they can trust. They do exist, just hard to find.
__________________
Culture is offline   Reply With Quote
Old 06-17-2009, 06:42 PM   #25
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,619
Quote:
Originally Posted by Walt34
At age 21 I'd buy a small house, an airplane, a speedboat, a motorcycle, and a Corvette. Then spend the rest on alcohol and women. One day in a drunken stupor I might think that maybe I should save a little bit.
Quote:
Originally Posted by FUEGO View Post
There wouldn't be much left for women and booze.
Or airplane, speedboat, motorcycle or Corvette.
__________________
LOL! is offline   Reply With Quote
Old 06-17-2009, 06:45 PM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,619
Quote:
Originally Posted by Culture View Post
Realistically, a 21 yo concentrating on a career in MLB is not going to spend the time to learn investing. They need to find a hourly investment they can trust. They do exist, just hard to find.
Uh, why not? There is plenty of down-time during season (think of all that travelling and hotel-room time) and even more in the off-season. And learning to invest is not rocket-science nor brain-surgery. To learn investing takes about the same amount of skills as learning to cook a hamburger or to drive a car.
__________________
LOL! is offline   Reply With Quote
Old 06-17-2009, 10:26 PM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,428
If he's getting a $500K signing bonus, then I suspect his salary will be near or in the low millions. I would definitely recommend the rookie financial orientation process, and I also agree with Dex's insurance recommendation. I would also have him look for a financial advisor (fee only). I would absolutely not go with ANYONE who approaches him, not even me . Let him (or someone close to him - you, a responsible parent, like that) find one by researching them through normal channels. I assume he has an agent. If so, I would really hesitate to take his/her advice on a financial advisor. They are too conflicted, IMO.

Mostly I would park the money for a while (CDs, money market accounts, etc) after allocating a play fund that is just enough to have fun with, but not enough to Len Bias him. After the endorphins have settled a bit, then start allocating it out via a conservative AA.

Of course if he has a little left over, a fun investment like HFWR recommends would not hurt too much.
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 06-17-2009, 11:48 PM   #28
Moderator Emeritus
CuppaJoe's Avatar
 
Join Date: Jun 2007
Location: At The Cafe
Posts: 6,866
Kronk says it would be about $300,000 after taxes. Since he's young, I think he ought to go wild with, say, 10% of it and find a way to preserve the rest. That would be $30,000 to play with, not very much but would teach him the meaning of 10%.

OP, please ask him to join the forum so we can live vicariously. He could think about living the way we do, on just 4% or less of our PFs. Hope he can RE at some point.
__________________
CuppaJoe is offline   Reply With Quote
Old 06-18-2009, 08:17 AM   #29
Recycles dryer sheets
 
Join Date: Jan 2007
Posts: 105
Quote:
Originally Posted by harley View Post
If he's getting a $500K signing bonus, then I suspect his salary will be near or in the low millions.
The minor leaguers don't come close to the money that the is given out in the major's. As a rookie you start off in single A ball and then move up thru the system, some faster than others, but usually takes at least a few years for the player to develop and get promoted.

Google Answers: MLB and Minor league Minimum Saleries

First contract season: $850/month maximum. After that, open to negotiation

Alien Salary Rates: Different for aliens on visas--mandated by INS (Immigration).

Triple-A--First year: $2,150/month, after first year no less than $2,150/month

Class AA-First year: $1,500/month, after first year no less than $1,500/month

Class A (full season)--First year: $1,050/month, after first year no
less than $1,050/month

Class A (short-season)--First year: $850/month, after first year no
less than $850/month
__________________
jblack is offline   Reply With Quote
Old 06-18-2009, 09:18 AM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
freebird5825's Avatar
 
Join Date: Feb 2008
Location: East Nowhere, 43N Latitude, NY
Posts: 9,017
Buy us all season tickets and we will dispense advice for free in exchange for hot dogs and beer.

Seriously, he will be approached by many "experts". I will second that he needs to avoid the ones who come out of the woodwork to "help" him. Got a local guy who will give him good solid advice versus the big ring wearing sharpies ?

Congrats to your brother for his opportunity. Keep an eye on him so he doesn't go hog wild with the windfall.
__________________
"All our dreams can come true, if we have the courage to pursue them." - Walt Disney
freebird5825 is offline   Reply With Quote
Old 06-18-2009, 11:17 AM   #31
Confused about dryer sheets
 
Join Date: Jun 2009
Posts: 8
All -

Thanks for the input so far. It has been pretty helpful. He is a pretty smart kid, but I just want him to make an educated decision and not get taken advantage of those people "coming out of the woodwork."

Some themes I saw....Look into an advisor that charges by the hour, if invest in funds use Vanguard, nothing wrong with doing some CD laddering, etc.

Quote:
Originally Posted by jblack View Post
The minor leaguers don't come close to the money that the is given out in the major's. As a rookie you start off in single A ball and then move up thru the system, some faster than others, but usually takes at least a few years for the player to develop and get promoted.

Google Answers: MLB and Minor league Minimum Saleries

First contract season: $850/month maximum. After that, open to negotiation

Alien Salary Rates: Different for aliens on visas--mandated by INS (Immigration).

Triple-A--First year: $2,150/month, after first year no less than $2,150/month

Class AA-First year: $1,500/month, after first year no less than $1,500/month

Class A (full season)--First year: $1,050/month, after first year no
less than $1,050/month

Class A (short-season)--First year: $850/month, after first year no
less than $850/month
JBlack is right in that after this bonus, the Minor League salaries are pretty low. So I feel it is all the more important he handles this wisely.
__________________
Kittle2020 is offline   Reply With Quote
Old 06-18-2009, 11:23 AM   #32
Recycles dryer sheets
Lawrence of Suburbia's Avatar
 
Join Date: Mar 2009
Location: Newcastle, WA
Posts: 110
Lucky sod.

I remember what I would've done with $500,000 at 21, so he'll likely blow most of it and regret it much later.

Can you imagine having the wit to just put it in a diversified account, and not checking on it again (apart from dealing with the taxes) until age 6 or so? What a wonderful (potential) break in life.

Unless he does what I would've done: bought a Porsche, partied, travelled until it was mostly gone.
__________________
Don't just do something; stand there!

- Jack Bogle
Lawrence of Suburbia is offline   Reply With Quote
Old 06-18-2009, 05:18 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,182
1. Have an older brother who can help guide him through this exciting, confusing time. Hey, he's got this already! Good job!

2. 10% or so (even 20%) to blow on a car and/or other toys makes sense to me. It's a nice reward for something he's probably worked hard at to earn, and he'll still have a nice chunk of change and a college education to fall back on.

3. Personally I'd do something like open a Vanguard account and go with something like 70% in the total stock market index fund and 30% in a bond fund, but going to an hourly adviser isn't a bad idea either. Just avoid anyone that gets a commission, who will guide him into an annuity, insurance policy, overly risky investment, or charge a high commission for something that may well not beat the overall market. Most managed funds do NOT beat index funds. Maxing out an IRA sounds like a great idea too.

I don't really see the point of CD laddering unless he wants/needs to supplement his low minor league salary a bit, or maybe a partial ladder to fill the gaps of the off-season. I'm not clear if that monthly salary is only during the season?

Congrats and best of luck to him! Hopefully he'll have success and make the bigs and wonder why he was so conservative with the bonus. But if he doesn't, he'll be thankful for investing a large chunk of it.
__________________
RunningBum is offline   Reply With Quote
Old 06-18-2009, 05:27 PM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,035
Lots of good advice . I'd definitely say take 10% and have a ball and put the rest in a secure place . My stepson got two very large inheritances . One when he was twenty and the other at twenty four . He spent them quickly and now regrets it .
__________________
Moemg is offline   Reply With Quote
Old 06-18-2009, 05:43 PM   #35
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
"Often a slip between the cup and the lip" - research insurance a lot can happen between now and a contract with the NBA
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 06-18-2009, 05:53 PM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
Pay yer taxes - put all the rest in Target Retirement(age dated VG of course). Then go back to living the way you did BEFORE the bonus.

Not to be poop head but sometimes careers don't work out the way you'd expect.

And for heaven's s sake don't read books or do a lot of looking for active managers - unless they can put up cash or gold in escrow to guarantee their promises.

heh heh heh - You can learn to party responsibly in the stretch after the career takes off.
__________________
unclemick is offline   Reply With Quote
Old 06-18-2009, 06:02 PM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,182
psst Dex...basketball is the NBA...baseball is MLB.
__________________
RunningBum is offline   Reply With Quote
Old 06-18-2009, 06:51 PM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
dex's Avatar
 
Join Date: Oct 2003
Posts: 5,105
Quote:
Originally Posted by RunningBum View Post
psst Dex...basketball is the NBA...baseball is MLB.
I'm tired; I got up at 4am today to hike a mountain.
NBA, MLB, NFL, XXX - what's the difference
__________________
Sometimes death is not as tragic as not knowing how to live. This man knew how to live--and how to make others glad they were living. - Jack Benny at Nat King Cole's funeral
dex is offline   Reply With Quote
Old 06-18-2009, 07:09 PM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 5,182
Quote:
Originally Posted by dex View Post
I'm tired; I got up at 4am today to hike a mountain.
NBA, MLB, NFL, XXX - what's the difference
Yeah, but you mixed them up yesterday too! Another mountain?

Funny thing, I got up at 4am on Sunday to run up a mountain, actually we went up 2 different mountains, probably about 4000 feet of climb in all.
__________________
RunningBum is offline   Reply With Quote
Old 06-18-2009, 07:11 PM   #40
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 1,012
Quote:
Originally Posted by jblack View Post
The minor leaguers don't come close to the money that the is given out in the major's. As a rookie you start off in single A ball and then move up thru the system, some faster than others, but usually takes at least a few years for the player to develop and get promoted.

Google Answers: MLB and Minor league Minimum Saleries

First contract season: $850/month maximum. After that, open to negotiation

Alien Salary Rates: Different for aliens on visas--mandated by INS (Immigration).

Triple-A--First year: $2,150/month, after first year no less than $2,150/month

Class AA-First year: $1,500/month, after first year no less than $1,500/month

Class A (full season)--First year: $1,050/month, after first year no
less than $1,050/month

Class A (short-season)--First year: $850/month, after first year no
less than $850/month
given this pay scale maybe psssst wellsley is in order for income supplementation
__________________

__________________
jdw_fire is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
'Fess up - Anybody Half-FIREd? spncity FIRE and Money 32 11-13-2007 06:01 PM
Oh Oh, Might Give Better Half Idea poboy Other topics 0 04-25-2006 10:53 AM
Half a point? cute fuzzy bunny FIRE and Money 27 03-08-2006 07:40 PM
Half-timers speak up LRS FIRE and Money 15 11-20-2005 06:37 PM
Re: Golf & the other half renferme Other topics 7 03-01-2004 11:15 AM

 

 
All times are GMT -6. The time now is 11:00 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.