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What to do with my windfall?
Old 12-20-2007, 04:38 PM   #1
Confused about dryer sheets
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What to do with my windfall?

My company is being bought out by a larger company and all of my company stock will be bought out from under me (no choice) in February. The amount after taxes will be a couple hundred thou.

Before I ask it, just put all of those witty thoughts aside... No, I'm not going to give the money to you.

So what are some ideas of what I should do with the money? Here's a sketch of my situation:

* My wife and I have no kids. I work, my wife doesn't. We're in good health.
* I'd like to retire in about 5 years but could end up working another 10 (I'm about 55).
* This money will represent about 1/5th or 1/6th of my retirement funds.
* Over 50% of my retirement funds are in the stock market, the larger portion in index funds, but a significant portion in individual stocks.
* I consider myself a moderately experienced investor.
* I own 2 condos: 1 completely paid off and currently being rented (in Arizona). We will move into this one (and sell the other one) when I retire. The other condo, the one we're living in (in California), has about 50% equity: the mortgages are fixed rate at about 6%.
* other than the mortgages, we have no debt at all.

I have a few ideas about what to do, but I don't want to prejudice your ideas. So, what are some interesting ideas about what to do with the money?

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Old 12-20-2007, 05:24 PM   #2
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Dollar cost average over the next year into your retirement investments.

If you don't have your retirement investments allocation - that is a different question.
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
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Old 12-20-2007, 05:52 PM   #3
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I agree with dex. Put it towards your asset allocation. Don't have one? Get one.
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Old 12-20-2007, 06:00 PM   #4
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Well - if you really want to tick yourserlf off - do what I did - buy a balanced index appropriate to your age and financial situation as a benchmark and waste winter evenings(when there's not football) measuring your managed investments against it. Over forty years - guess who won the series - and I cheated with a ten year head start - no index funds in 1966.

heh heh heh - Pssst Target Retirement.
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Old 12-20-2007, 06:03 PM   #5
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My vote -- bail out now.

Or at least, get used to the idea, just in case. If your company is being bought out you will either a) get "rightsized" out of a job anyway or b) find youself doing two (or three) jobs for the price of one as everyone else is blown out of the water around you.

Not to be a wet rag here, but I was part of a large group of professional colleagues when we were assimilated by Megacorp 7 years ago, and there aint' nary a one of 'em left but me.

So... it does no harm to run a few numbers and see how it works out. Pay the mortgage, don't pay the mortgage, move now, move later, that type of thing. Might actually be a nice surprise!

Not exactly what you asked for, but it pays to consider all the options.

Good luck to you, whatever you do!
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