What to do with my windfall?


Confused about dryer sheets
Oct 4, 2007
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. :D

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?

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.
I agree with dex. Put it towards your asset allocation. Don't have one? Get one.
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.
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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