Left With Lots Of Loot
You won't believe what an inheritance to Dave's daughter will grow to ... if she manages it right.
QUESTION: Dave’s daughter was left with $700,000 in an estate. They put down $100,000 on a $240,000 home and she wants to invest $300,000 in retirement. Half of the estate is in a stock portfolio and the rest is in cash. What’s the best way to do invest?
ANSWER: Write a check today and pay off the house. Commit to staying debt free, then draft what would have been your house payment into a mutual fund. This money invested should be worth about $83 million by retirement.
As far as the stock portfolio, I don’t buy single stocks. It’s an ultra-high risk investment and it scares me to death. Move that money into good growth-stock mutual funds with a good 10-year track record. By doing that, you’ll lower your risk considerably. Invest in growth, growth and income, aggressive growth and international mutual funds. She has an obligation to whoever left her this money to be wise with it.