Spouse inherited $3 million

[Anonymous]

I keep telling myself an extra $1500 isn’t going to mean a thing in our taxable account and it could well mean something fun we decide on as a family, even if that’s a donation to charity!

[Anonymous]

After DH and I finished grad school and had real jobs (earning like 8x our grad stipends), we set a minimum monthly entertainment spending goal. When we reviewed our budget, we would actually consider it a negative if our date/entertainment spending was too low. You might benefit from trying this.

[Anonymous]

OP, the point of your spouse deciding is to shake up your lives a little. With you deciding it will just be more of the same. Major yawn fest.

(And this is not giving her the opportunity. It is her money)

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would start taking better vacations.

+1, fly private!

private? with 5M NW

LOL

add a zero..

the comments on this forum amaze me. Most Americans really do think they have more money than they actually have. 5 million is the new 1 million.

[Anonymous]

I would take some memorable vacations with my child who will be going away to college. I would want to do this regardless of whether there was an inheritance or not but may do something more expensive that we may not normally do.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would start taking better vacations.

+1, fly private!

private? with 5M NW

LOL

add a zero..

the comments on this forum amaze me. Most Americans really do think they have more money than they actually have. 5 million is the new 1 million.

Right?!

5M is obviously great but all it does is buy security and minimal "luxuries." You should not be driving a flashy car, flying intl first class, staying at Four Seasons, etc.

You begin to afford this once you cross 10M. Why? a 5% withdrawal on 10M gets you 500k a year to screw around with, 5% on 5M is 250k --- hardly a lavish life.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Thank you for the very solid comments here. I also did a double take at “income producing prostitutes.” Hilarious. I do like the idea of taking some set amount of money and deciding to spend it each year. We are financially conservative, although not for any particular reason. Like many, we have saved regularly and our investments have done well over the past two decades. We were unable to have additional children so that kept our expenses low. That said, we don’t deny ourselves anything. It would take some thought to spend an extra $50,000 a year. I think I’d like to put us on a waiting list for a new car. There are a few new electric cars coming out that interest us.

I know there are some software programs that model how much you can spend, I like to do my own research rather than hire help. My experience with hired financial advisors has not been great. Our estate documents will funnel this money to our child so that has been done. Spouse is already basically retired, working one or two days a week for pure pleasure.

If this is the case, the inheritance isn't fully commingled...just FYI.

Something about your posts suggests to me that even the amount of money you had pre-inheritance is more than you are prepared to handle, which makes me think some kind of financial or wealth management training might be of value to you even if you don't want to hire anyone. (And I agree that it's hard to find good financial planners these days, as most of them are moving away from fee-based models.) You might simply not care at all if money is wasted etc, which is fine. But you should think about it and affirmatively decide that. I wish I had a good recommendation, but I don't. I've heard "Rich dad, Poor dad" is good, but I haven't read it.

I’ve read “Rich Dad, Poor Dad”. It’s great for inspiring people to get out of the rut of putting their extra money in a bank savings account at the end of the month like it’s the be-all and end-all of financial planning. It’s provides bupkis in the way of nitty gritty advice.

OP and spouse need to spend a weekend going through the Bigger Pockets website to decide if they want a second job as real estate investors. If the answer to that is no, then they’ll get by just fine with Bogleheads and a good Estate lawyer.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would start taking better vacations.

+1, fly private!

private? with 5M NW

LOL

add a zero..

the comments on this forum amaze me. Most Americans really do think they have more money than they actually have. 5 million is the new 1 million.

Right?!

5M is obviously great but all it does is buy security and minimal "luxuries." You should not be driving a flashy car, flying intl first class, staying at Four Seasons, etc.

You begin to afford this once you cross 10M. Why? a 5% withdrawal on 10M gets you 500k a year to screw around with, 5% on 5M is 250k --- hardly a lavish life.

Eh, all that depends on personal factors. Let's say you have $5 million invested but also don't have any debt (i.e. own your cars, home, etc outright). That $250K less 15% capital gains tax = $212,500 or just shy of $18,000/month.

Even if you took $10K and put it towards saving for your next car, repairs around the house, house cleaning, lawn care, saving for kids' college, etc that's $8,000/month without any debt service. Spend some extra on clothes, a few fancy meals out, high quality groceries, etc - call it another $5K - you're left with "only" $3K/month. That's $36,000/yr and surely you can take a nice trip or two each year for that, right?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I would start taking better vacations.

+1, fly private!

private? with 5M NW

LOL

add a zero..

the comments on this forum amaze me. Most Americans really do think they have more money than they actually have. 5 million is the new 1 million.

Right?!

5M is obviously great but all it does is buy security and minimal "luxuries." You should not be driving a flashy car, flying intl first class, staying at Four Seasons, etc.

You begin to afford this once you cross 10M. Why? a 5% withdrawal on 10M gets you 500k a year to screw around with, 5% on 5M is 250k --- hardly a lavish life.

Fortunately, I don’t think I could spend $500k a year if I tried! My family has zero desire for flashy cars or the Four Seasons. We spend about $120k/year right now. Planning a beach vacation after school gets out with teen. I agree that $5M is secure, but not crazy rich. Maybe we can bump spending up to the $150-175k level. Fancier vacations, home projects, newer cars. That seems doable and enjoyable.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Thank you for the very solid comments here. I also did a double take at “income producing prostitutes.” Hilarious. I do like the idea of taking some set amount of money and deciding to spend it each year. We are financially conservative, although not for any particular reason. Like many, we have saved regularly and our investments have done well over the past two decades. We were unable to have additional children so that kept our expenses low. That said, we don’t deny ourselves anything. It would take some thought to spend an extra $50,000 a year. I think I’d like to put us on a waiting list for a new car. There are a few new electric cars coming out that interest us.

I know there are some software programs that model how much you can spend, I like to do my own research rather than hire help. My experience with hired financial advisors has not been great. Our estate documents will funnel this money to our child so that has been done. Spouse is already basically retired, working one or two days a week for pure pleasure.

If this is the case, the inheritance isn't fully commingled...just FYI.

Something about your posts suggests to me that even the amount of money you had pre-inheritance is more than you are prepared to handle, which makes me think some kind of financial or wealth management training might be of value to you even if you don't want to hire anyone. (And I agree that it's hard to find good financial planners these days, as most of them are moving away from fee-based models.) You might simply not care at all if money is wasted etc, which is fine. But you should think about it and affirmatively decide that. I wish I had a good recommendation, but I don't. I've heard "Rich dad, Poor dad" is good, but I haven't read it.

I’ve read “Rich Dad, Poor Dad”. It’s great for inspiring people to get out of the rut of putting their extra money in a bank savings account at the end of the month like it’s the be-all and end-all of financial planning. It’s provides bupkis in the way of nitty gritty advice.

OP and spouse need to spend a weekend going through the Bigger Pockets website to decide if they want a second job as real estate investors. If the answer to that is no, then they’ll get by just fine with Bogleheads and a good Estate lawyer.

We have zero, repeat ZERO, desire to own real estate as an investment. I don’t doubt there is a good situation to be had there but I do not have the time or energy to deal with it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am not sure there is anything a tax planner can tell us. The investments are in tax-efficient index funds and we are maxing out all tax-preferred savings options.

What is the advantage of I-Bonds? I guess I need to research those more, but I'm hesitant to complicate our portfolio. We have everything at Vanguard except for one 401(k) which is at Fidelity and the HSA at HealthEquity.

I found a podcast "I will tell you how to be rich" that seems to focus several episodes on moving to a mindset where saving is not the ultimate goal. "What are you saving for?" and all that. I feel that way with this additional money. Since I don't want to retire, I may need to work on spending money for enjoyment more.

It doesn't sound like you really want advice. None of us know enough about your portfolio to tell you if a tax planner could be helpful, and you have convinced yourself that you know everything. It's just strange to me and sounds very much like the mindset of someone who isn't used to the potential pitfalls of having a large sum of money. At the end of the day, the biggest risk is that you make decisions that significantly increase your tax liability and/or you get a much lower return on your funds than you could, neither of which are a catastrophe. But there are other concerns with whether your money is protected from law suits and stuff.

I grew up with more money than you I'm guessing, and I suspect that informs our different attitudes. Personally, I would at least talk to a tax advisor in case they see something I don't. There is no obligation to following their advice. Think of it like consulting a doctor when you are on the fence about whether something is benign. What's the harm in getting an expert opinion?

I agree. And unlike financial advisors, tax advisors are not angling to skim of 1% of your assets a year in management fees.

I don't get the utter contempt many have for financial advisors. I don't use one, but there are many people who don't spend their free time on money forums and value assistance in navigating what can be a very complex topic. Yes, an index fund will usually outperform after considering the advisor's fees, but having someone to talk to when the market is down 25% can be helpful for many people to stay invested. If you don't like their fees, don't use them. Just like if you don't like the cost of housekeepers, you can clean your own house! If you don't like the cost of an oil change, you can do it yourself! And yet no one says Jiffy Lube is "angling to skim money" from your bank account. Sheesh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am not sure there is anything a tax planner can tell us. The investments are in tax-efficient index funds and we are maxing out all tax-preferred savings options.

What is the advantage of I-Bonds? I guess I need to research those more, but I'm hesitant to complicate our portfolio. We have everything at Vanguard except for one 401(k) which is at Fidelity and the HSA at HealthEquity.

I found a podcast "I will tell you how to be rich" that seems to focus several episodes on moving to a mindset where saving is not the ultimate goal. "What are you saving for?" and all that. I feel that way with this additional money. Since I don't want to retire, I may need to work on spending money for enjoyment more.

It doesn't sound like you really want advice. None of us know enough about your portfolio to tell you if a tax planner could be helpful, and you have convinced yourself that you know everything. It's just strange to me and sounds very much like the mindset of someone who isn't used to the potential pitfalls of having a large sum of money. At the end of the day, the biggest risk is that you make decisions that significantly increase your tax liability and/or you get a much lower return on your funds than you could, neither of which are a catastrophe. But there are other concerns with whether your money is protected from law suits and stuff.

https://www.buyupside.com/calculators/feesdec07.htm

I grew up with more money than you I'm guessing, and I suspect that informs our different attitudes. Personally, I would at least talk to a tax advisor in case they see something I don't. There is no obligation to following their advice. Think of it like consulting a doctor when you are on the fence about whether something is benign. What's the harm in getting an expert opinion?

I agree. And unlike financial advisors, tax advisors are not angling to skim of 1% of your assets a year in management fees.

I don't get the utter contempt many have for financial advisors. I don't use one, but there are many people who don't spend their free time on money forums and value assistance in navigating what can be a very complex topic. Yes, an index fund will usually outperform after considering the advisor's fees, but having someone to talk to when the market is down 25% can be helpful for many people to stay invested. If you don't like their fees, don't use them. Just like if you don't like the cost of housekeepers, you can clean your own house! If you don't like the cost of an oil change, you can do it yourself! And yet no one says Jiffy Lube is "angling to skim money" from your bank account. Sheesh.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am not sure there is anything a tax planner can tell us. The investments are in tax-efficient index funds and we are maxing out all tax-preferred savings options.

What is the advantage of I-Bonds? I guess I need to research those more, but I'm hesitant to complicate our portfolio. We have everything at Vanguard except for one 401(k) which is at Fidelity and the HSA at HealthEquity.

I found a podcast "I will tell you how to be rich" that seems to focus several episodes on moving to a mindset where saving is not the ultimate goal. "What are you saving for?" and all that. I feel that way with this additional money. Since I don't want to retire, I may need to work on spending money for enjoyment more.

It doesn't sound like you really want advice. None of us know enough about your portfolio to tell you if a tax planner could be helpful, and you have convinced yourself that you know everything. It's just strange to me and sounds very much like the mindset of someone who isn't used to the potential pitfalls of having a large sum of money. At the end of the day, the biggest risk is that you make decisions that significantly increase your tax liability and/or you get a much lower return on your funds than you could, neither of which are a catastrophe. But there are other concerns with whether your money is protected from law suits and stuff.

I grew up with more money than you I'm guessing, and I suspect that informs our different attitudes. Personally, I would at least talk to a tax advisor in case they see something I don't. There is no obligation to following their advice. Think of it like consulting a doctor when you are on the fence about whether something is benign. What's the harm in getting an expert opinion?

I agree. And unlike financial advisors, tax advisors are not angling to skim of 1% of your assets a year in management fees.

I don't get the utter contempt many have for financial advisors. I don't use one, but there are many people who don't spend their free time on money forums and value assistance in navigating what can be a very complex topic. Yes, an index fund will usually outperform after considering the advisor's fees, but having someone to talk to when the market is down 25% can be helpful for many people to stay invested. If you don't like their fees, don't use them. Just like if you don't like the cost of housekeepers, you can clean your own house! If you don't like the cost of an oil change, you can do it yourself! And yet no one says Jiffy Lube is "angling to skim money" from your bank account. Sheesh.

The smartest and wealthiest people I know use financial advisors. The people that disparage them (the ethical advisors) either don’t have money, are cheaper than dirt, or think they are better at investing (hence not as smart as they think).

There are terrible advisors out there, but many are very ethical and good. It’s not all
About performance..and if you know that then you actually have money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am not sure there is anything a tax planner can tell us. The investments are in tax-efficient index funds and we are maxing out all tax-preferred savings options.

What is the advantage of I-Bonds? I guess I need to research those more, but I'm hesitant to complicate our portfolio. We have everything at Vanguard except for one 401(k) which is at Fidelity and the HSA at HealthEquity.

I found a podcast "I will tell you how to be rich" that seems to focus several episodes on moving to a mindset where saving is not the ultimate goal. "What are you saving for?" and all that. I feel that way with this additional money. Since I don't want to retire, I may need to work on spending money for enjoyment more.

It doesn't sound like you really want advice. None of us know enough about your portfolio to tell you if a tax planner could be helpful, and you have convinced yourself that you know everything. It's just strange to me and sounds very much like the mindset of someone who isn't used to the potential pitfalls of having a large sum of money. At the end of the day, the biggest risk is that you make decisions that significantly increase your tax liability and/or you get a much lower return on your funds than you could, neither of which are a catastrophe. But there are other concerns with whether your money is protected from law suits and stuff.

I grew up with more money than you I'm guessing, and I suspect that informs our different attitudes. Personally, I would at least talk to a tax advisor in case they see something I don't. There is no obligation to following their advice. Think of it like consulting a doctor when you are on the fence about whether something is benign. What's the harm in getting an expert opinion?

I agree. And unlike financial advisors, tax advisors are not angling to skim of 1% of your assets a year in management fees.

I don't get the utter contempt many have for financial advisors. I don't use one, but there are many people who don't spend their free time on money forums and value assistance in navigating what can be a very complex topic. Yes, an index fund will usually outperform after considering the advisor's fees, but having someone to talk to when the market is down 25% can be helpful for many people to stay invested. If you don't like their fees, don't use them. Just like if you don't like the cost of housekeepers, you can clean your own house! If you don't like the cost of an oil change, you can do it yourself! And yet no one says Jiffy Lube is "angling to skim money" from your bank account. Sheesh.

The smartest and wealthiest people I know use financial advisors. The people that disparage them (the ethical advisors) either don’t have money, are cheaper than dirt, or think they are better at investing (hence not as smart as they think).

There are terrible advisors out there, but many are very ethical and good. It’s not all
About performance..and if you know that then you actually have money.

Not PP, but I think that the issue is that financial advisors when you're in the 7-figure wealth category are a mixed bag. Above that threshold, it's just a lot of work to manage your money. But in the 7-figure range, you can pretty easily put together a diverse portfolio of index funds, RE, and a few more specialized assets. We are in this range, and we talked to a couple of financial advisors who just felt like more time and expense than value. Maybe others don't want to do even the minimal amount we do, but at some point even the time you spend talking to the FA needs to be taken into account.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I am not sure there is anything a tax planner can tell us. The investments are in tax-efficient index funds and we are maxing out all tax-preferred savings options.

What is the advantage of I-Bonds? I guess I need to research those more, but I'm hesitant to complicate our portfolio. We have everything at Vanguard except for one 401(k) which is at Fidelity and the HSA at HealthEquity.

I found a podcast "I will tell you how to be rich" that seems to focus several episodes on moving to a mindset where saving is not the ultimate goal. "What are you saving for?" and all that. I feel that way with this additional money. Since I don't want to retire, I may need to work on spending money for enjoyment more.

It doesn't sound like you really want advice. None of us know enough about your portfolio to tell you if a tax planner could be helpful, and you have convinced yourself that you know everything. It's just strange to me and sounds very much like the mindset of someone who isn't used to the potential pitfalls of having a large sum of money. At the end of the day, the biggest risk is that you make decisions that significantly increase your tax liability and/or you get a much lower return on your funds than you could, neither of which are a catastrophe. But there are other concerns with whether your money is protected from law suits and stuff.

I grew up with more money than you I'm guessing, and I suspect that informs our different attitudes. Personally, I would at least talk to a tax advisor in case they see something I don't. There is no obligation to following their advice. Think of it like consulting a doctor when you are on the fence about whether something is benign. What's the harm in getting an expert opinion?

I agree. And unlike financial advisors, tax advisors are not angling to skim of 1% of your assets a year in management fees.

I don't get the utter contempt many have for financial advisors. I don't use one, but there are many people who don't spend their free time on money forums and value assistance in navigating what can be a very complex topic. Yes, an index fund will usually outperform after considering the advisor's fees, but having someone to talk to when the market is down 25% can be helpful for many people to stay invested. If you don't like their fees, don't use them. Just like if you don't like the cost of housekeepers, you can clean your own house! If you don't like the cost of an oil change, you can do it yourself! And yet no one says Jiffy Lube is "angling to skim money" from your bank account. Sheesh.

The smartest and wealthiest people I know use financial advisors. The people that disparage them (the ethical advisors) either don’t have money, are cheaper than dirt, or think they are better at investing (hence not as smart as they think).

There are terrible advisors out there, but many are very ethical and good. It’s not all
About performance..and if you know that then you actually have money.

Not PP, but I think that the issue is that financial advisors when you're in the 7-figure wealth category are a mixed bag. Above that threshold, it's just a lot of work to manage your money. But in the 7-figure range, you can pretty easily put together a diverse portfolio of index funds, RE, and a few more specialized assets. We are in this range, and we talked to a couple of financial advisors who just felt like more time and expense than value. Maybe others don't want to do even the minimal amount we do, but at some point even the time you spend talking to the FA needs to be taken into account.

I agree with this. Not worth it at 7 figures. A tax accountant and estate lawyer are worth it.