Let's get right to it, I need financial advice.

Let's get right to it, I need financial advice.

Member since 2020 · 14 posts · 1 vote

Alright. As the title says I am in need of financial advice.  I am 28.  I have been working a job I hate for two years, and have managed to save close to 10k.  At the beginning of the year I inherited a little over 150k, the 150k is going to be taxed when I take it out of the account it is in but the remaining money is not taxed(can't remember the amount).  Now. I am extremely lucky. I am in an extremely fortunate position. I want to capitalize off of this the most that I can so I can help my own family and friends in the future like the person who left me this inheritance helped me. 

I have a very low cost of living, I moved a little over two years ago with my parents to a property they purchased years ago, and I live rent free in a small cabin on the property. With bills, food, and necessities I probably pay $380 a month most months, but never more than $480.  When I am working, which I haven't been for the last 2 weeks due to COVID, the only added expense is gas which is about $80-$100 a month(of course it's much cheaper now).  

So, like I said before I realize that I am extremely fortunate.  I've been completely broke, living in a really crappy 1 bedroom apartment while working at a job many considered a career, paying $600 a month in rent and barely being able to afford food.  I am stressing the fact that I realize how fortunate I am because I think it is important that I take advantage of every opportunity that I have being in my position.  A lot of people can't afford to think about quitting there job to learn something that might help them earn more. A lot of people inherit money but have to spend most of it on their current living arrangement and bills. 

With that said, I am thinking about quitting my job. It truly makes me miserable, and I think having more time to focus on learning to invest and trade in the stock market among other things would be worth it in the long run.  I am only going to be 28 once, and if I can take this year to develop skills by 29 that I wouldn't have if I stayed at my job, and I can profit off those skills, why shouldn't I do it? 

With COVID causing so many to lose their jobs, I figure there will be no shortage of jobs in the future.  I have enough money in my savings alone to live comfortably for at least 6 months, at least a year even.  But, I acknowledge that my ambition and the amount of resentment I hold for my current job might be clouding my judgment.  So I would like to ask for advice/opinions on what I should do? 


Should I quit? 

If so, is the stock market/trading a realistic way of earning income considering our economy today? 

I have already began taking some courses on TD ameritrade's website, I opened a brokerage account and downloaded thinkorswim(trading program), and I have been observing stocks and messing with trendlines and different forms of analysis. I am seriously motivated to learn this.  I do not want to be broke, I do not want to be one of those idiots who inherits money and burns through it.  This is a blessing and I want to take advantage of it fully.  

I appreciate any help. Thank you.  

0Reply
107 views

Most Popular Reply

Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
6y

@Lenny Smith for the vast majority of people day trading is a bad idea; a very bad idea.  If you want to try it set aside $1,000-$3,000 fully expecting to lose it all and give it a month or so, if you don't lose money I'd be surprised, if you make a decent amount I'll be shocked.  

One of the problems with day trading is you need an account value of $25k to even do it and you have to pay trading commissions if you want to actually trade in real time, and even then you are 2 steps behind the trading algorithms.  Whatever you decide be careful, you are lucky to have this opportunity; don't squander it.

See this reply in the discussion

38 Replies

Jump to latestLatest
  • Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y

    If you did not have a tax advisor tell you that you owe taxes on your inheritance, you may be surprised at how much you owe. There is a 'reset' of the basis when you inherit, so depending on when you inherited it and how it is invested you may even have a tax credit. You probably should talk with a tax person about how much it is taxed, and if it would be better to pull that money out over several years instead of all at once. If its a roll over IRA, it may be best to leave it as an inherited IRA--save it until you are ready to retire if its not under mandatory withdrawal.

    In this day and age $150k is not enough to live off for your lifetime without working to supplement it.  As far as your job goes.  Don't quit until you have something else lined up.  BUT start lining up something else up immediately.  You are off work now, so spend that 40 hours a week applying for and seeking out a job you will like.  Maybe you can work AT a financial advisory company and learn about investing in stocks.  Or as an accountant at a company.  Something you are interested in.  Take classes at college, even on line, in the area you think may be your future job area. 

    A lot of people on this particular webpage do not invest in anything but real estate, so they push that area.  You can make money with rentals, but it may not be of interest to you.  

    Trading stocks is an art, it takes skill, and information.  If you just rely on the computer generated information you likely will be following the trend and in the end lose everything.  The major brokerages have computers dedicated to them that you can not access that compile and digest information for them much faster than you can get information.  I do invest in EFTs, stocks, bonds, CDs.  More than half my investments are in these areas.  They can generate great income and profit.  I managed this myself, until it got large enough I wanted a professional person to manage it.  Day trading is likely to just waste your wealth rather than build it, unless you have a professional background in stock management.

    All investments are a risk.  The rental can get destroyed.  Stocks, bonds can go down.  CDs can perform lower than inflation.  The general idea is to balance your assets (that $150k) and remember that what you put in high risk activities you should be willing to loose that amount.  Day trading is very high risk.

    Since your wealth is inherited, you do not have the ability to replace it easily.  Someone who, say, worked for Google at half a million a year who has an extra $400k left each year after expenses could take that risk and it would not be a big deal because his income it excessive.  But in your case, if you lose the inheritance you don't have the ability to replace it.   So I would recommend you do more conservative investing like EFT for the long term.

    Many financial advisors will talk to you about how to invest your money for free.  You may want to talk to a few and see what they recommend.

    And just a recommendation.  Generally one should not say how much money they have on a website because scammers will hunt you down to cheat you out of it.  Be careful with private messages and e-mails saying they can help partner or invest for you.

  • Rental Property Investor · TN · Member since 2018 · 2k+ posts · 2k+ votes
    6y
    Originally posted by @Account Closed:

    I wonder if anyone who has annouced they have money have actually lost it to a BP scammer.

    I do not know of any, but whenever I post that I buy houses for cash rather than financing them I get a TON of e-mails asking me to partner with them on some "really great deals".  

    They seem to think that someone who buys properties for cash would want to give an unknown entity cash.  Or would really want to partner with an unknown entity rather than buying on their own.  In these e-mails they have a 'deal' but either no money to buy the property or no money to fix it.

    I just block them.  

  • Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    6y
    Originally posted by @Lenny Smith:
    Originally posted by @Account Closed:

    Just read Dave Ramsey’s “the total money makeover” and follow the plan in the book. Do not try to be a day trader or a real estate investor or you will part with your inheritance very quickly.

     Man, I will look into that book!  I have a ton of other books I am trying to get through but I love listening to his radio program when I catch it in the car. 

     Well make sure you prioritize lol this book first is the most important to start with

  • Rental Property Investor · DFW TX · Member since 2018 · 179 posts · 260 votes
    6y

    Put the TAX QUESTION to rest! Assuming it is an inherited non-spousal traditional IRA, a non-minor must distribute the contents with in 10 years. It is taxable at your earned income rates. There is an exception for spouses, minors, person less that 10 years younger than the originator, and for disabled persons. Roths are distributed tax free. The basis reset does not apply.
    https://www.nerdwallet.com/blog/investing/inherited-ira-options/

    If you have heard of Dave Ramsey, even listened to him, where did you come up with "Day Trader".  For persons that are unskilled with money, follow Dave Ramsey's rules!  Another good info source if you have some money skills is The Money Guys; they follow the FOO (Financial Order of Operations).
    https://www.moneyguy.com/

    The big difference I find is emotion based vs math based, for example, some folks should not have a credit card, some folks know to pay it off each month...

    None of us out here in BP land have a clue about your situation, except you seem to thing Day Trading is a reasonable path.  

    Use the Ramsey site to find an "advisor with the heart of a teacher" or maybe hit up the Money Guys.  Your concern about education help is real.  Let the advisor coach you on the numbers.  I am not hearing that you are currently up to the task by yourself.

    C.

  • Member since 2020 · 14 posts · 1 vote
    6y
    Originally posted by @Charles LeMaire:

    Put the TAX QUESTION to rest! Assuming it is an inherited non-spousal traditional IRA, a non-minor must distribute the contents with in 10 years. It is taxable at your earned income rates. There is an exception for spouses, minors, person less that 10 years younger than the originator, and for disabled persons. Roths are distributed tax free. The basis reset does not apply.
    https://www.nerdwallet.com/blog/investing/inherited-ira-options/

    If you have heard of Dave Ramsey, even listened to him, where did you come up with "Day Trader".  For persons that are unskilled with money, follow Dave Ramsey's rules!  Another good info source if you have some money skills is The Money Guys; they follow the FOO (Financial Order of Operations).
    https://www.moneyguy.com/

    The big difference I find is emotion based vs math based, for example, some folks should not have a credit card, some folks know to pay it off each month...

    None of us out here in BP land have a clue about your situation, except you seem to thing Day Trading is a reasonable path.  

    Use the Ramsey site to find an "advisor with the heart of a teacher" or maybe hit up the Money Guys.  Your concern about education help is real.  Let the advisor coach you on the numbers.  I am not hearing that you are currently up to the task by yourself.

    C.

    I honestly saw a couple things about day trading on the internet after making simple searches involving making investments.  I knew nothing about stocks or trading anything prior my searches.  I wish I knew what everyone has told me about trading prior to asking for advice because it has left me with very little advice regarding my actual situation and tons of opinions about me being ignorant for ever considering day trading.  I get it. It is not a reasonable thing to even consider, sometimes people are unaware of things. Now I am aware and we can move on, but seeing as this is the internet and first impressions are so strong my best bet at getting any further advice would probably be to go back to the drawing board, incorporate what I've learned and rephrase my questions.  I will check out Ramsey's site. thanks 

  • Rental Property Investor · Corona, CA · Member since 2015 · 46 posts · 8 votes
    6y

    Lenny use your time to focus.....on how to convert the earned income from the job you hate into passive income that will eventually allow you to leave the job you hate

  • Real Estate Agent · Murfreesboro, TN · Member since 2019 · 194 posts · 181 votes
    6y

    @Lenny Smith you can make a killing day trading. You can also lose everything, which is why money management and risk management are the most crucial elements of successful day trading and more importantly those are why nearly all day traders fail.

    I personally say if your job makes you miserable you better quit, you got one life and running around wasting it doing **** you hate is a bad idea.

    I own some contracting businesses, and day trade everyday. Start a paper account with Think or Swim and learn all the terminology and how to use the platform, place bracket orders, etc. Then after about 2 weeks of that and deep understanding of charts and risk management learning, developing a plan, fund an account with 1000 dollars. And trade real money.

    Treat this as a business and mever risk more than 10$ on your first few months of trades. If you develop a plan and learn deeply, and follow that plan every single trade, you will be successful.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.