Well, Thanks to all for the valuable input. Although, Ill have to pass on the hedge funds
First of all, I have absolutely set aside my cap gains tax monies. I have actually talked to the CPA that prepares my taxes who also prepares my father's taxes. He admitted being especially conservative and said he would pay off the homes first to get a guaranteed 6% (not taking into account the write-offs for interest expense of course). My financial planner, who is my father's estate planner, is on the fence about paying off the homes but recommends some stock in well established companies in order to beat inflation versus simply going ultra conservative, ie CD's, for a few % and possibly trailing inflation.
I agree that my 401 is tiny but can not put but so much in due to the "highly compensated individual" rule. I got back a check for $5,000 trying to max out last year. Actually, it was short about 5% from what I had put in... what a sham. What amounts to a loan to my 401 and lost money at that.
I'm thinking pay off ARM, invest 50-100k in big, blue chips, ie Target, Microsoft, Anheuser, J&J, etc. and let that simmer for 15-25 years. Ill definately research the Vanguard offerings. I can borrow against that if an opportunity arises. Continue to max 401 and save the rest (~175,000) for a possible buying opportunity due to recession 2009.
I definately am not putting it all on the line depending on the inheritance. Thanks for input and believe me, I know I am blessed. Lets hope we all have these problems one day. Andy
There are a few well established companies that in the span of 2 months are now worth pennies. Buying individual stock in companies is a gamble at best. I don't think people who invested heavily in financial stocks the last few years have been beating inflation
It could be another sector that gets slammed a few years from now. The point is you need to diversify. Mutual funds in international companies, small value US companies, tech sectors, energy, real estate etc.