Quote:
Originally posted by phredgreen
throw the mil into an interest bearing account and live modestly off of it for the rest of my life.
oyeah.. and pay off my car, my sweetehart's car, my mom's house, all of our debts, and probably invest in some property in a secluded yet accessible place.
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By intrest bearing account I hope you mean mutal funds and NOT a money market account. You would never make enough money of the intrest to cover inflation that way. I would take about 50,000 put it as a down payment towards a home. Take another 30K towards my college education and spend about 15K on a car. The rest would be invested not to be touched for atleast 10 years. Then I would go from there.
Edit: I feel the need to elaborate on that last statement. To educate the uneducate masses if you will. Along with history and philosphy another thing that I really like is finances. Don't ask me why but I spend hours a day (not every day but probably atleast twice a week) mapping out what exactly I would do with money (if I had any) to make more. I could easily be a finanical planner or just someone who gets a small large sum of money and invests all the time to make money... If I didn't think those people were just scum who exploit money market to make a profit for themselves and never offer anything real to society. But at any rate. Just to let you all know why a money market (or local bank savings account) is a bad idea in the long run. Lets say you took 100,000 dollars and put in a bank account making 2% intrest (thats about right...) and left it alone for one year. In one yours time you would have 102,000 dollars. Now when you first look at it it LOOKS like you have made 2000 dollars. However, When you factor in inflation rates of between 4 and 8 percent (thats about right for any given year) for this example lets say there was 5 percent inflation rate in the same year that you had your 100,000 dollars in the savings account. That means this year to buy exactly the same things you could last year for 100,000 dollars you NOW need 105,000 dollars. So you have in effect actully LOST 3000 dollars just by not spending it! I am not saying that saving accounts are all bad. They are a great temporary (less then a year) place to put your money. Had you left that 100,000 dollars in cash you would have lost the full 5000 dollars in value. I am just saying for long term (over 5 years) money you HAVE to put it in mutal funds (or directly into stocks and bonds if you want but thats alot more work) Sorry about the mostly off topic rant.