Here in the UK you can invest up to £20,000 per year. Over the years, your liability for tax diminishes (I’ve had mine for over 7 years, so now pay no tax.)
The interest rate varies according to economic circumstances…
There are all kinds of complexities between qualified and non-qualified IRA beneficiaries. And it has changed several time in the last couple of years. If anyone is googling for answers, make sure you know the date each cite you’re reading was written.
I guess no. If anything my wife and I have the opposite problem in the sense of “what the fuck do we do with this money?”
I’m not working at the moment, but normally both me and my wife have relatively high incomes. But I don’t think we are particularly extravagant and we live within our means. So cash just sort of piles up.
We just don’t think like “if I had $100k I’d buy a Porsche”. It’s more like “I have $100k, we should probably set that aside for college funds or emergencies or something more practical than a fancy car.”
FWIW my wife and I both drive reliable 10+ year old shitboxes.
So after 7 years, you can have an ISA with £140,00 in it ?!
I never knew that.
Thanks, I’ll look into doing that. I was thinking maybe an annuity.
My late wife was an attorney who did a lot of wills, trusts, and estates over the years.
One thing she learned was that heirs are very bad at estimating how large an estate really is. Because lots of people are good at lying to their kids about money. There have been innumerable blow-ups where the kids were expecting an estate of e.g. 1 meeelion dollars to be divided x ways, and it was really $100K before final expenses and 75K after expenses. The heirs are shocked to find their share of the pittance is a mini-pittance.
Cue huge recriminations and a lingering suspicion that somebody looted the estate before Mom died. Typically the suspect is whoever of the heirs was physically or emotionally closest to Mom or had management authority over her money while she was alive. Sometimes these suspicions are justified. Often they are not. Mom had been carefully hinting of her wealth for years as a tool to ensure loyalty to her, and ensure somebody would care about her and for her in her dotage.
There’s nothing sexist meant here. Could as easily be Dad as Mom, or Uncle versus Aunt. As a matter of statistics, most elderly married couples have the man die first leaving his (few) separate assets to her. So it’s more likely that the next-generation (“real”) inheritance passes through Mom or Aunt.
But it’s sure not a requirement. The divorce and remarriage rate skyrocketed in the 1970s and has remained fairly steady since. As the currently elderly folks are increasingly from blended families with multiple marriages and layers of step-kids involved, those neat statistics and simple bloodline inheritances of yore will increasingly be the exception, not the rule.
Bottom line to the OP: You might be surprised in either direction about how much your share turns out to be. If your family already has drama, rest assured there will be a large helping of drama attached to the estate process. Good luck and I hope you it comes out well for you.
For me, there’s no way I wouldn’t think about it. But I’d try to treat those thoughts as “fun mental exercises”. Heck, almost every day I play “What used sports car would I buy with $50k?”
Me, I’d come up with a plan where I CAN’T spend it all at once, like setting up a trust for myself. Or multiple CDs that mature six months apart…
The plan right now is (and these things are non-negotiable, AND there will definitely be enough money for them)
*Pay off current car on which we have a loan ($5k ish)
*Pour Mom’s ashes in New Orleans, then board a cruise ship ($5k ish)
*A few months later, dream trip to London ($10-15k)
IF there’s more money:
Used Porsche $20k
This & that: Furniture, kitched equipment, etc. $10k ish
IF there’s still more money:
Put it back for a rainy day.
What happened to the MR2? Used Porsche for $20k IS fantasizing!
Sounds like a fun way to use the money. But you may need to plan for ongoing expenses for:
Maintenance of a Porsche can burn through cash pretty quickly.
They get bad reviews. Everyone says if you’re going to buy a low-end sports car, buy a Miata. Mrs. Homie says that she will divorce me if I drive around in a Miata. So I’m getting a Porsche (if the money is there).
Can you elaborate on this? Like, oil changes cost a lot of money? They go through parts quickly? The reviews I read praised their durability and reliability.
First, you need to define which Porsche, unless you already have and I missed it.
in any case, for the models I can think of that you can currently get for $20k that are not basket-case restoration projects, $20k is still right on the edge of end-of-life. But the parts and maintenance costs will be the same (or higher if parts are less available) as for a $100+k car, which is to say substantial.
A Miata is really the right answer in this case. I’ve been really lucky in life and have owned a small fleet of performance cars and motorcycles, including some semi-exotics. But my ‘94 Miata was by far the most fun in the day-to-day world. And cheapest to maintain.
With a car like this, you should go to a specialized mechanic rather than a Quickie Brake and Lube place. Routine maintenance may be costly. Oil changes may be $200+ and brake jobs $1000+. There are more specialized engine and suspension parts which enable the higher performance, and those parts may break. Parts will be generally be more expensive than a budget car. The design of the car is built around performance. Things like ease of repair and cost savings are a more minor concern. The expectation is that Porsche owners go to the dealer for maintenance. It will be relatively difficult for you to work on the car since they are designed around having trained technicians fix things rather than the car’s owner.
So what does this mean to you? Are you still working or retired?
Other than this soon-to-be inheritance, what other assets and liabilities do you have? You posted that you own your home free and clear due to an inheritance. Putting the money in appreciating assets was a good move. Now, with this (I assume) second inheritance, all you are talking about is spending it on depreciating assets. Nothing wrong with doing that with a portion of the money, but come up with a plan to invest the remaining funds.
Sorry about your mom.
A risk worth taking. Especially compared to buying an old Porsche.
Point taken!
My family has seen this. When my grandfather died he had a ton of money that no one even suspected. Millions and millions. My grandmother lived a few more years and was able to get good in home care at least. Then my father inherited it and decided it wouldn’t be a good idea to leave so much to his kids and gave almost all of it away to a worthy cause. So, he left a little help for his grandchildren’s college fund, but not much else. No resentment, and maybe it was a good decision. None of us starved and we continued to work hard and prosper.
'Zactly. A new Porsche 911 series costs between $150K & $300K depending on which sub-model & options.
An old runout Porsche you might get for $20K still has 100% of the parts and labor costs of a new one. And the unreliability. And the difficulty of working on. You need a big city Porsche specialist; those aren’t shade tree cars.
Funny enough, a decently restored 1980s or early 1990s Porsche might be a better choice than an unmaintained early 2010s model with 150K miles on the clock. The sophistication (read “expen$e”) of hot cars of all brands really went nuts in around 2010 and hasn’t looked back. Buying on the early side of the curve might be the smart budget option.
At least, a used Porsche has a good chance of retaining or even increasing its value. That will never happen with a new car. If the maintenance costs become burdensome, you can recoup your purchase price just by finding another dreamer with an inheritance.
Well it looks like I’ll (probably, if the money is there) getting a Miata, Mrs. Homie will just have to live with it.
IF you know what you’re looking at and for, you can definitely get a decent used Porsche for less than $20K, but you really have to know the cars. OTOH, it’s far easier to get burned on a $20K piece of junk with a Porsche badge on it, though. If I were looking for another Porsche for a fun, sunny day driver, I’d be looking for a mid/late 2000s Boxster/Cayman or Boxster/Cayman S, preferably a 987 variant. Look for one that is relatively low miles and has never been tracked. Professionally maintained is important, because there’s not a lot a shade tree mechanic can do with them other than fuck them up.
Porsches do get expensive to maintain, but they’re really well engineered and well constructed too. There have been some pretty significant (read: costly) problems with several models over the years - IMS bearings come to top of mind - but if you avoid the problem year models, you’re pretty safe. Having a factory-trained mechanic change the oil and give it a once-over annually isn’t cheap, but that will likely be your only maintenance cost other than replacing tires and wipers. And if it’s a sunny day driver, you probably don’t need to change the wipers very often.
Of course, if your sporty car of choice will be driven a lot, a Miata is a smarter choice. Cheaper to buy, cheaper to maintain, cheaper to insure, and probably at least 98% percent of the Fun Factor of a Boxster/Cayman.
I grew up in Porsches. My dad bought his first one when I was barely a month and half old, and it was the car in which I learned to drive. I’ve owned Porsches from four major eras: a ‘63 356, an ‘86 Carrera, an ‘06 Boxster S, and an ‘07 Carrera. I inherited my dad’s first Porsche, and tracked my brother’s ‘78 911 a couple of times. All fun cars. BUT…..
My son bought a late ‘90s Miata and prepped it for mild track use (autocross). Aside from being a real kidney-buster on account of the stiffer suspension, it was a riot to drive. Plus, knowing that it was cheaper to repair meant I worried less about breaking it when I drove it. He eventually moved to other hobbies and sold it to his childhood best friend, who tracks it pretty regularly. The Miata is a much better bang for the buck car than any Porsche IME. Plus, they’re a dime a dozen, relatively speaking.