Another money scenario

KTMan

Twelve Pointer
Contributor
Lets say Grandpa never trusted banks and kept his money "under the mattress". In talking to him you find out he has $100,000 in cash. You finely convince him that the money is actually losing value every year and he needs to let his money make him money.

How would you invest this amount of cash? Knowing you can't just go deposit in the bank (without IRS coming to see you).

One key factor in the investment. This is grandpa's life savings so you would want a safe lower risk investment.

Guess grandpa's age is important: Let's say 55-60
 
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UncleFester

Old Mossy Horns
My grannie was a depression era baby. She wouldn't throw ANYTHING away. She also raised me for a big part of my childhood. So much so I called her mama like my uncles did, wasn't that big of an age difference anyway. She passed a few years ago just shy of her 97th birthday. When my family was cleaning out her bedroom she had a corner of the room with piles of shoes. As they started digging they started pulling out envelopes filled with cash. It was more than the figure you mentioned....
 

Homebrewale

Old Mossy Horns
At age 55-60, he does not have enough saved for retirement so he should look to work another 10 years. If he does work for the next 10 years at a minimum, he doesn't need the money right away. I would probably recommend a life strategy fund from either Vanguard or Fidelity. That should give a good blend of stocks, bonds and fixed investments. Since he isn't eligible for SS until age 62 at the earliest, he will just need to keep it in a money market account at a bank so he can access it for spending.

But generally I find the safest path is to mind my own business and let them make their own decisions.
 

ellwoodjake

Twelve Pointer
I say you talk Grandpa into upgrading to a safe, and help him dig up all the fruit jars. With the lack of interest being paid now, the bank won't do him much good. He doesn't have the time to make it up, nor the risk tolerance. He has already "taken the loss" by keeping it stashed all those years. Tell him to enjoy his money, buy cars, take vacations-he can't take it with him. Maybe he'll give you the combination before he croaks.
 

nckeith

Ten Pointer
Well assuming the gains were legal and they simply didn’t trust banks, deposit the money and invest in a 2 fund portfolio of total stock market and bond fund. May have to break up the deposits into 3-4 deposits and sign an affidavit at the bank, the rumor of 10,000 and under is somewhat true but they also track structured deposits
At that age 50/50 asset allocation should be good.
Now if the money was untaxed and illegally gained, I guess letting inflation eat it up is the last of his worries.
It kind of hard to spend illegal money on real assets, especially things like real estate.
I suppose you could use it as seed money to start a legal business.
Or go to a casino a few times a year, get chips, gamble a little lose a little cash out and deposit in bank.


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KTMan

Twelve Pointer
Contributor
You guys read way more into a simple question. It's a hypothetical question but one that exist a lot more than one might think.

The problem at hand is how do you invest this much CASH? Instead of saying life savings (assume he has retirement plan), let's say it was a raining day fund he built up over the years selling wood, trading and what not. But realizes that is way too much cash "under the mattress" and wants to invest it.
 

woodmoose

Administrator
Staff member
Contributor
he problem at hand is how do you invest this much CASH? Instead of saying life savings (assume he has retirement plan), let's say it was a raining day fund he built up over the years selling wood, trading and what not. But realizes that is way too much cash "under the mattress" and wants to invest it.

yeah,,, that's it,,, hypothetical,,,,

tenor.gif




I know this guy,,,, he coordinates "investments" in "unique" businesses,,,, let me know if you want me to connect you guys for this "hypothetical",,,,
 

KTMan

Twelve Pointer
Contributor
If it is money that he has earned and paid taxes on I would invest it with someone I know and trust. If it is money that has not been taxed I would leave it as is. I would not take advise from a hunting and fishing forum even from me.

Actually a lot of good advise can come from this forum if you weed through the BS. Just like googling information. It's just a hypothetical. Not like I'm going to run out and tell someone "hey take your $100000 in cash and upgrade your still, because NCHF says good idea".

I like to learn all I can about investing. You'd be surprised at the financial advisors I have asked this same question and they could not answer it. The CASH is the problem that must be solved in this hypothetical question.
 

mdunker

Ten Pointer
Well assuming the gains were legal and they simply didn’t trust banks, deposit the money and invest in a 2 fund portfolio of total stock market and bond fund. May have to break up the deposits into 3-4 deposits and sign an affidavit at the bank, the rumor of 10,000 and under is somewhat true but they also track structured deposits
At that age 50/50 asset allocation should be good.
Now if the money was untaxed and illegally gained, I guess letting inflation eat it up is the last of his worries.
It kind of hard to spend illegal money on real assets, especially things like real estate.
I suppose you could use it as seed money to start a legal business.
Or go to a casino a few times a year, get chips, gamble a little lose a little cash out and deposit in bank.


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Good advice here.
 

LIZZRD

Eight Pointer
Vangaurd target fund 2030
said that , with the market so high and new president/admin. coming in I wouldn't do that now... but yes would need to start depositing into an institution to be able to move it.
personally just yesterday moved some money out of a 2020 fund to Fed. money market, I am a bit further along in years but don't have a good feeling about the next 3-6 months.
 

timekiller13

Old Mossy Horns
If said person doesn't "need" that money for retirement purposes or any other expenses, then I would forego investing it, I would spend it here and there on some trips, a luxury purchase that you may have always wanted (vehicle, boat, RV etc). I see no point in not enjoying your money. What good is it to have $100k in cash if you get hit by a bus tomorrow?

A relative on my wife's side died a few years ago and they found she had over $2 million in the bank. She never went anywhere, in fact, only left the COUNTY once in her life, lived in a falling down house, drove a car that was 35 yrs old and barely ran. For what reason? You had all that money and you could have at least enjoyed a little something. You bet the people she willed it to are enjoying it. Just to be clear, those people did not include my wife and I!!!
 

Tarheeler

Twelve Pointer
If said person doesn't "need" that money for retirement purposes or any other expenses, then I would forego investing it, I would spend it here and there on some trips, a luxury purchase that you may have always wanted (vehicle, boat, RV etc). I see no point in not enjoying your money. What good is it to have $100k in cash if you get hit by a bus tomorrow?

A relative on my wife's side died a few years ago and they found she had over $2 million in the bank. She never went anywhere, in fact, only left the COUNTY once in her life, lived in a falling down house, drove a car that was 35 yrs old and barely ran. For what reason? You had all that money and you could have at least enjoyed a little something. You bet the people she willed it to are enjoying it. Just to be clear, those people did not include my wife and I!!!
Those types dont see the need for luxury trips etc.. those are the types that usually die with a wad. Misers lol

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KTMan

Twelve Pointer
Contributor
If said person doesn't "need" that money for retirement purposes or any other expenses, then I would forego investing it, I would spend it here and there on some trips, a luxury purchase that you may have always wanted (vehicle, boat, RV etc). I see no point in not enjoying your money. What good is it to have $100k in cash if you get hit by a bus tomorrow?

A relative on my wife's side died a few years ago and they found she had over $2 million in the bank. She never went anywhere, in fact, only left the COUNTY once in her life, lived in a falling down house, drove a car that was 35 yrs old and barely ran. For what reason? You had all that money and you could have at least enjoyed a little something. You bet the people she willed it to are enjoying it. Just to be clear, those people did not include my wife and I!!!

I know a retired farmer that has 1200 acres. No kids, no wife and no hobbies. Lives in a little 2BR run down house and drives a 80's model truck. Got more money than you can shake a stick at. I'm just curious who he will leave it all to. I've tried to buy farm multiple times and he just laughs. Don't need no money and you don't need no 1200 acres is what he tells me.
 

oldest school

Old Mossy Horns
green energy scam companies. they'll be gold for a couple of years.
but if grandpa is only fifty then you are likely be in your twenties at most so far too young to give any investing advice.
 

Firedog

Old Mossy Horns
Contributor
Changing the scenario from it being his life savings to it being "petty cash" makes a huge difference in the answers from my perspective. If he is just looking to invest play money I would look at Land or rental property that will provide either recreational opportunities or income while at the same time appreciating in value.

That said, 100K in either of those worlds is not a lot of cash so both would be limited.
 
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