WSOP Windfall... What is a boy to do?!?!

[Kneel B4 Zod]

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Jurollo, I couldn't quite tell what your plan was, but paying down most of your house now sounds like a pretty terrible plan IMO. You want some liquidity to your cash and real estate is like a black hole to the accessibility of your cash.

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Good advice generally, but Jurollo rents and is still up in the air about housing after Sept 1.

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this, but liquidity is only 1 issue. you need to consider what you could do with your money (say $100k) instead of paying down a mortgage. the historical appreciation of equities, and even bonds, is much higher than real estate.

I have a friend who made a few million at a young age, and bought his house in cash b/c he didn't want to be "in debt". he's a smart guy, but despite how great using 'other people's money' can be, the word "debt" scares a lot of people.

[bigbootch]

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Right now I am leading towards buying a house with a very small mortgage. That way while my money may not grow exponentially in the house if poker went downhill I would have a hard asset which would be all but paid off, which would be super attractive to me. That way no matter what I really do after poker I wouldn't have to worry about huge living costs, so the decline in revenue wouldn't be such a huge hit to me.


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this, but liquidity is only 1 issue. you need to consider what you could do with your money (say $100k) instead of paying down a mortgage. the historical appreciation of equities, and even bonds, is much higher than real estate.


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Jurollo, KB4Z's point is a very solid one that you should consider. Yes, an almost-paid-off house is a solid hard asset that you would have if anything went bad. But remember that having 200k in a money market is no less solid, that's your money that no one can take away and it is earning you 5% (or whatever it may be in a few years) RISK FREE. Ditto for bond index funds, although those are not quite risk free.

Basically, this is the equation you should consider:

A = total EV from renting = Interest (or expected earnings) from the 200k that would not be tied in the house minus your rental payments

B = total EV from owning = Expected returns from the house appreciating minus property taxes minus assessments (or maintenance)

Now you compare A vs B, and see which one you think would be better. Note I'm talking strictly dollar EV right now, I'm not talking about the many personal factors that may come into play that I mentioned earlier.

If you consider that the expected returns from the real estate is historically poor, and that depending on where you live you can expect to pay 2%/year on property taxes and assessments, B is not looking so good.

Anyway, my real point is this: base your decision on the numbers, your own estimates of what you believe A and B are. Do NOT base it on a vague notion like "I don't want any debt" or "I want to own something solid and tangible."

[bigbootch]

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Take 50K, learn to daytrade. Take it slow, learn as much as you can. There are lots of great resources/boards on the web.

I'd buy real estate with the rest, buy a nice car and pay off debts.

Congrats btw.

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This would be an example of bad advice.

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Yes, this is BAD BAD advice. It's kind of like telling someone who has no experience with poker to play poker for a living. Yes, it's possible, but it's also very very difficult. The fact that Jurollo is a good poker player certainly makes it more likely that he would succeed as a daytrader than a random guy off the street, but in the same way that a successful stock analyst is more likely to succeed as a poker pro than a random guy off the street. In other words, it's still very difficult and unlikely to end with great success.

Not only does he not have to lose money, he can't even scratch because of transaction costs. And turning a little bit of profit won't be enough either, because you have to make MORE than 5% (or whatever the risk free money market rate is at the time) to make it +EV. And suppose you have the best case scenario of Jurollo consistently beating the market by 5%/year, that's still $2500/year on $50k. Trust me, this is just a losing plan.

['Chair]

Re: WSOP Windfall... What is a boy to do?!?!


uhhh...be smart and say hello to early retirement.

[SleeperHE]

Whatever you do... do not let your financial advisor sell you an annuity or insurance product...

[claudenm]

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Justin,

The max you can put in an IRA is $4,000.

Claude

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No, I'm not, I'm talking about the federal regulations placed on all IRAs, which is actually $5000, this year.

you are thinking about a Roth IRA, which is from earned income anyways.

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[geormiet]

Dunno if has been mentioned but you made too much to qualify for a roth ira

[anduril]

I really like the duplex idea. You own a home, allow the other unit to pay your mortgage for you, and you'd still have plenty of cash on hand to do whatever with.

[FakeKramer]

Wow there is some really terrible financial advice in this thread. Congrats on your win, Justin. The best thing I can say is: take financial advice from a professional financial advisor, and very very little from this thread.

[thatpfunk]

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JA or anyone,

The bit about hybrids being bad for the environment....leveling right?

If not, someone exlain plz.

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No leveling about the hybrids. Basically, PITTM's right - there is an enormous amount of energy that goes into making and properly disposing of the batteries. Batteries are horribly toxic and high-energy. This is not good. The batteries have an approximate lifetime of 100K miles. They are a fraud at this point. Of course, time may change this and one could argue that you are funding the development and improvement of battery/hybrid technology by buying them now. Then again, an efficient car or even a high-end diesel gets nearly the same mileage and most hybird owners get nowhere near the EPA MPG's quoted in real practice.

At a talk that I attended given by Nate Lewis (Caltech), probably the top electrochemist in the world and a global energy expert (adviser to many presidents), somebody asked about hybirds. He said that he wouldn't comment on the hybrids themselves (he was avoiding all political arguments in his talk, to his credit), but he would say that the additional energy required to MAKE a Prius (discounting the disposal, even), EXCEEDS THE AMOUNT OF ENERGY THAT A HUMMER H2 USES DURING 100K MILES OF DRIVING. That's pretty sick if you ask me.

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i believe sucker, cuz hes the man, but does anyone have any sort of link to anything that says anything remotely close to this?

if its true id obv like to people to point people towards some facts...