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Another idea
Old 11-24-2021, 06:40 PM   #21
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Another idea

I'm in a somewhat similar situation, and I decided to invest the inheritance in several quality companies that pay high dividends. For the moment I'm reinvesting the dividends, but at any point I can flip the switch and those dividends will hit my bank account instead. The dividends will fund our travel and other fun activities beyond basic expenses, which are covered by inflation indexed pension.

I'll be the contrarian of the bunch on this board- I think that this market looks a lot like the mid-1990's. IMO we are in the middle of a long term bull market due to the massive liquidity and interest rate environment we are in. Stocks are the only place to find yield right now, and the market always seeks yield. Interest rates are likely to go up, so bonds are not at all attractive over the next few years.

Check out Chris Ciovacco on YouTube- he is an excellent financial advisor and analyst.
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Old 11-24-2021, 07:25 PM   #22
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Perhaps consider setting aside some of this money to grow untapped for the future. Pensions are nice (I have one) but having sufficient investments / cash to fall back on as you grow older can help you sleep well at night.

Since your pension is more than your current expenses, you could consider investing all of the $300k and leaving it for the long-term and using the excess pension income for your travels. This way you've got a large chunk of money going to work for your future immediately and you can use the pension excess for fun in the short run.
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Old 11-25-2021, 06:27 AM   #23
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I have heard this from numerous economists.
We have talked to our kids & said don't be in a hurry to get into stocks at this time.
Plus we are all learning so a little patience has multiple benefits right now.
Do NOT try to time the market. The best time to invest in equities (assuming you don't need this money anytime soon) is yesterday.

https://www.bogleheads.org/wiki/Bogl...g_start-up_kit
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Old 11-25-2021, 08:08 AM   #24
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Do NOT try to time the market. The best time to invest in equities (assuming you don't need this money anytime soon) is yesterday.

https://www.bogleheads.org/wiki/Bogl...g_start-up_kit
Yes! And the 2nd best time to invest is today.
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Old 11-25-2021, 08:09 AM   #25
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My wife is a retired educator and when I met her, I helped her with her investments at her school's sponsored 403(b). My assessment was that the schools had basically thrown the employees to the wolves. They had her is some silly overpriced annuity and her "advisor" there was basically just looking out for himself. Hopefully your program is better, but it might not be a sure thing.
+1 This is an all too familiar story in educational systems and hasn't improved much in a number of decades. I helped prevent these problems with my wife's 403b since I had the opportunity to have her money placed in a MM account in the only company that wasn't some kind of insurance annuity. I didn't want them to be invested in their expensive MF and found I could have that money moved every so often into a no load Vanguard fund of our choice. i made sure there was a little money left in the 403b MM to keep the account open.
I would do the same thing with a large chunk of money especially at this point in time.


Cheers!
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Old 11-25-2021, 08:27 AM   #26
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Originally Posted by Austin704 View Post
Perhaps consider setting aside some of this money to grow untapped for the future. Pensions are nice (I have one) but having sufficient investments / cash to fall back on as you grow older can help you sleep well at night.

Since your pension is more than your current expenses, you could consider investing all of the $300k and leaving it for the long-term and using the excess pension income for your travels. This way you've got a large chunk of money going to work for your future immediately and you can use the pension excess for fun in the short run.
I agree, since this bonus money is not needed in short term. Just put it all in low fee stock funds and let it ride.
Best case is you never need the money and can be distributed as part of your estate; at greater value thanks to growth. Or take withdrawals and use for your large expenses as needed or desired.
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Old 11-25-2021, 09:36 AM   #27
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You might find this link interesting. Itís from the White Coat Investor, a web site targeted at doctors, dentists, etc. itís a list of 150 or so different portfolios. While it might seem overwhelming at first, itís point is really to show that there are any number of different portfolios that can be successful - the important thing is to pick one that you feel comfortable with and then stick with it. Or, as a well respected poster on the Bogleheads site is fond of saying, ďThere are many roads to DublinĒ.

https://www.whitecoatinvestor.com/15...er-than-yours/

Incidentally, my late mother was the beneficiary of an inflation-adjusted teacherís pension that allowed her and my father to live quite comfortably, if not extravagantly, in retirement (until 92 in her case).
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Old 11-25-2021, 09:39 AM   #28
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We just bought more equity etf 2 days ago instead of letting some cash sit in the accounts as "back-up" funds over the next couple of years. To be bullish, we may be in year 12 of a 20-year bull run. If market goes down, we will just ride it out.
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Old 11-25-2021, 09:39 AM   #29
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I'm another vote in favor of getting that $300k mostly into investments sooner rather than later.
Given your secure pensions, I would go with an Asset Allocation of at least 80% stock index funds.

Given your inexperience and the market highs at present, it would be okay to use a Dollar Cost Averaging approach, moving $20,000 into a total stock market index fund or S&P 500 index fund each month.

Sounds like most of this money will go into a taxable account, but do what you can to put $7000 of earned income each into a Roth IRA while you still have any earned income.

So, decide which low-cost investment firm you'll be using (Vanguard, Fidelity, iShares, ...) and when that $300k arrives, move it all into your "settlement" fund (money market fund) where it's ready to move into stocks each month using your smartphone app.

Also decide if you'll be using mutual funds or ETFs to invest with. MFs are simpler but ETFs have some small advantages...
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Old 11-25-2021, 09:43 AM   #30
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Originally Posted by friar1610 View Post
You might find this link interesting. Itís from the White Coat Investor, a web site targeted at doctors, dentists, etc. itís a list of 150 or so different portfolios. While it might seem overwhelming at first, itís point is really to show that there are any number of different portfolios that can be successful - the important thing is to pick one that you feel comfortable with and then stick with it. Or, as a well respected poster on the Bogleheads site is fond of saying, ďThere are many roads to DublinĒ.

https://www.whitecoatinvestor.com/15...er-than-yours/

Incidentally, my late mother was the beneficiary of an inflation-adjusted teacherís pension that allowed her and my father to live quite comfortably, if not extravagantly, in retirement (until 92 in her case).
Thanks for this. As a librarian, I dig the research!

Many are concerned about our pensions. It is a state-wide program for public employees in a variety of career areas. It has been around for years & is well known for its solvency.
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Old 11-25-2021, 10:22 AM   #31
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Originally Posted by Ballhawker View Post
I'm in a somewhat similar situation, and I decided to invest the inheritance in several quality companies that pay high dividends. For the moment I'm reinvesting the dividends, but at any point I can flip the switch and those dividends will hit my bank account instead. The dividends will fund our travel and other fun activities beyond basic expenses, which are covered by inflation indexed pension.

I'll be the contrarian of the bunch on this board- I think that this market looks a lot like the mid-1990's. IMO we are in the middle of a long term bull market due to the massive liquidity and interest rate environment we are in. Stocks are the only place to find yield right now, and the market always seeks yield. Interest rates are likely to go up, so bonds are not at all attractive over the next few years.

Check out Chris Ciovacco on YouTube- he is an excellent financial advisor and analyst.
Agree with this except I'd add Real Estate to stocks as a good investment. Interest rates will likely go up a bit but not much. Economy would crater if rates went up 2% and it would add over $600b a year to US gov deficit up 2%.
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Old 11-25-2021, 11:04 AM   #32
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I have heard this from numerous economists. ...
@Librarian, your research technique has fallen apart here. Google tells me there are about 15,000 economists in the US. Even temporarily accepting the preposterous notion that a consensus of economists can accurately predict the future, is your "numerous" a statistically significant sample? I doubt it.

"The only function of economic forecasting is to make astrology look respectable.Ē Often attributed to John Kenneth Galbraith.

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Thanks for this. As a librarian, I dig the research! ...
OK, good. Here is some reading to slip in after Schultheis and before Bogleheads: "the signal and the noise" by Nate Silver, specifically the chapter on economic forecasting called "How to Drown in Three Feet of Water"

The important point here, @Librarian, that many people have made is that this $300K is long term money. As such it will ride the waves as the market goes up and down, taking advantage of the market's fundamental upward bias. Check out some of the quotations in this link I already posted: https://www.bogleheads.org/wiki/Tayl..._timing_quotes

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I'm in a somewhat similar situation, and I decided to invest the inheritance in several quality companies that pay high dividends. ... The dividends will fund our travel and other fun activities beyond basic expenses, which are covered by inflation indexed pension. ...
With respect, @Ballhawker, that is not an optimum strategy. Dr. Kenneth French explains in this short video: https://famafrench.dimensional.com/v...dividends.aspx
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Old 11-25-2021, 11:22 AM   #33
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We are in a similar situation. Mid-50s with a comfortable inflation adjusted pension from a well-funded system, zero debt and health care funded on top of that.

Funds that come our way beyond pension income are invested in equities for the long term.

We typically fund travel from either pension income or my little part-time seasonal job. As a retiree not tied to a 9-5 40 hour a week work schedule there are fantastic deals on off-peak and shoulder season trips Ö. We just did a week in Cancun at 4-star resort for less than $3k. Hope you grab some of those travel bargains and start enjoying the retiree lifestyle!!!
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Old 11-25-2021, 12:56 PM   #34
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Since you have no equities and a nearly bullet-proof source of (COLA'd) income, I'd suggest a couple of very low-cost equity funds that blanket the world's companies. I only know Vanguard, but their expense ratios are typically excellent and you can find indexed funds for the USA and for the world without the USA. Just those two might be all you need. No expert at all, but that's basically what I'm doing with the bulk of my equities. I agree that any "person" to help you is more likely helping herself - not you. You can do this without help. But don't forget that YMMV.
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Old 11-25-2021, 03:20 PM   #35
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I don't think this has been mentioned yet but consider a balanced index fund that has allocations in both equities and fixed income. Which fund you choose will depend on how heavily you want to get into the equity side. There are funds that are 80/20, 70/30, 60/40, 40/60, etc.


If your goal with this money is to spend the income it generates, it would be nice to have it generating a decent amount. Vanguard's 40/60 fund, for example, has an average annual return of about 7% since inception in 1994. You could do a lot worse than averaging 7% over the next 30 years (of course past performance is no guarantee yada, yada, yada).
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Old 11-25-2021, 06:30 PM   #36
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Vanguard STAR fund is a balanced fund that has a very strong record.
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Old 11-30-2021, 02:05 PM   #37
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Vanguard STAR fund is a balanced fund that has a very strong record.
I started ROTHs for the kids using the STAR fund. I picked it because it had the lowest entry requirement. I might have preferred pssst. Wellesley, but their incomes (and mine) wouldn't allow that large a buy-in.

I have offered to let the kids change to another fund as I have continued to add to the STAR fund for them but they seem to have little interest. In any case, it has performed very well. I can see the funds reaching 100K in the not too distant future as I continue to contribute and the funds continue to grow - I hope. In any case, for a "managed" fund, the expense ratio is quite low - around 0.30 IIRC.
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