All Forum Posts by: Lenny Smith

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.

There's nothing wrong with starting in real estate to see how you like it. I'd look for a 2-4 unit place and use your W-2 income to leverage and only use a small portion of your inheritance. You can hire a manager or do it yourself to figure it out. I'm a big believer of "you'll never know until you try." I'd also put a bit in the stock market (Roth IRA) and just let it marinate. Can you roll over the inheritance into your own IRA a bit at a time to save on taxes? Talk to an accountant ASAP and ask for help. It shouldn't cost very much and you can learn from somebody who isn't in a position to gain from your inheritance. There's also nothing wrong with walking away from a job and using a bit of the money to help invest in yourself and figure out your life. Just be intentional about your actions and please don't blow it on a new vehicle.

Now you are sounding like you are beginning to listen to the advice that people are giving you.  

Generally, I would say find something part-time or keep your full-time job for now.  When you are not working, develop a hobby or business you can do on the side that you enjoy.  There is a need everywhere for handymen, gardeners, etc.  Get that business up and running so that it covers your expenses plus some for the unexpected.  Once you are consistently making that from your new endeavors, then quit your present job.   

In today's economy with so many people that have lost their jobs is not the time to voluntarily walk away from a job. In the meanwhile read the book I suggested earlier.  I read the book and have given one to each of my teenage grandchildren.   Once you have read the book you will have a much better idea of what to do with your inheritance.  A financially sound person has 5-7 different streams of income.  

Before day trading and hoping you will be one of the few great successes, make sure you are secure and sound financially.  Also, make sure you isolate your vulnerable day trading money from the rest of your resources. In other words, make sure each income stream can only use the money set aside for that business and not touch your other resources.  People today are sue-happy.  You do not want to have all your resources vulnerable to some unfortunate unexpected incident. 

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.

@Lenny Smith The idea that you are trying to achieve financial independence is a costly idea in terms of time and effort which many people seem to overlook. To be blunt, if you can not figure out how to manage your time to begin this process, you will not make it. I work 84 hours a week at the moment, have a wife and two kids, and am beginning to invest in real estate on the side. I learned everything about the stock market on my own and am doing my best on the real estate side right now (with help from others on this site). My circumstances are not normal and I fully understand that but not having enough time is a complete cop out. If you watch tv, netflix, play video etc, you have time. If you spend time on social media, you have time. If you sleep more than 6 hours, you have time. It is all about time management and if you don't have the courage, willpower, and time management skills to simply begin at this point in your life, you will not magically have the grit to succeed just because you quit your job. You can do this so do not doubt yourself. But you need to push yourself right now given the current circumstances to mold yourself into someone who is a time management expert and someone who will stop at nothing. Quitting your job and using the "not enough time" excuse is a simple cop out that everyone uses on a daily basis but I guarantee it is not a question about time but it is a question about priorities. 

@Lenny Smith I would advise against stocks as many others have already said. I have been successfully trading stocks for a few years now but on the side. I have made about $10k in the last two months and have probably averaged about $2k a month for the last 4-5 years. I use $30k in my account and rinse and repeat. With that being said, I highly discourage this and I am personally trying to stop day/swing trading and get into real estate. Day/swing trading can be done and can be possible but you will soon learn that it is more time consuming than you think, analysis does not really mean as much as people think, and it is stressful. If you are determined to do this, then do it but I would be comfortable with losing $5-10k off the bat and hopefully you learn from the early mistakes quickly. I also highly highly recommend you use the thinkorswim paper trading platform for a minimum of three months. It has its flaws but if you can trade successfully with paper money of the same amount you would use with real money, for a minimum of one month, then you could try real money. If you have questions about analysis or anything at all about stocks, feel free to message me. Just be aware that if playing the stock market was so easy, everyone would do it. Also, carefully listen to all the "wealth gurus" on youtube. What you'll notice, besides the useless private groups and subscriptions they offer for a price, is that all day traders have real estate investments. ALL OF THEM. I would argue that 99% of the stock guys have built their wealth through real estate, not the stock market. Then look at all the real estate people on youtube. Very few talk about the stock market except to make comparisons to the returns you get through real estate. I HIGHLY recommend you stay on this website and learn everything you can about real estate and put your money there, not the stock market. This is just my two cents as someone who has played the stock market game with reasonable but not overabundant success. Again, feel free to message me with any questions and I can gladly answer them. I am 27 myself so we are at about the same age and can probably relate on a few levels.  

People have already said it, but I will say it more plainly.  Day trading is playing Russian Roulette.  It is basically gambling on trends.  The fallout from this COVID-19 will get a lot worst before it gets better.  

You said that presently you are unemployed.  Use this time to learn about how money really works.  I recommend reading How Money Works, Stop Being A Sucker.  Yes, you have been blessed.  I recommend investing in cash flowing real estate. Once you have made lots, and I mean lots of money with a constant stream of excess money coming in, then do you da trading gig.  

With all the answers you have provided thus far, it sounds like you have made up your mind to gamble your money in hopes of making lots of money in a very short time.  This is like becoming the number one athlete in the world.  It is one in a million.  But then you don't see all the hard losses, etc. Two birds in the hand are better than one in the bush. 

If you decide to gamble your money in day trading, I wish you lots of luck. 

@Lenny Smith - I noticed that you joined BP today.  Welcome.  I'm curious why you're asking about this on two fronts.  First, you realize this is an RE site, not a Wall St. investing site, right?  You've confused podiatrist with dentist.   Second, it seems by your comments that you're relatively sure it can be done and that you can do it.  GO FOR IT!!!  Unless you are Peter Lynch reincarnated, someone out there can use that $150K+ you inherited.  I recall a fellow telling me that most people win in a casino; as I recall he had to borrow rent money after that experiment.  

I don't believe you mentioned what you do.  No idea how bad it could be; change!  You said you're off at present.  I hope you've taken some time to attempt to learn about some jobs you might like.  Or perhaps taken time to watch Mike Rowe's Dirty Jobs.  Seriously, there are a lot of great RE pod-casts. 

Clearly, this is a RE site and yes, I play in RE.  RE can be very lucrative, but there are often bumps in the road. Some avenues of RE requires a fair amount of capital, some don't. But the folks that WIN have very positive attitudes and a lot of drive.  

Given you are asking on the Wall St side of the fence, I would find an advisor that you can trust. I assume you are referring to an non-spousal inherited IRA (they now have a 10 year RMD clock). I would pull most/all of it now while the market is down, pay the tax, and get it reinvested to allow it to ride the market back up. Pay the tax now when it is smaller and taxes are lower (Trump's taxes are lowest in my lifetime!). Once you have allowed it to climb, you have studied and learned about something (Wall St or RE or something) then work you way into that when you have a clue.

Get a job you can stand and keep it while you figure out what you want to do.  If you can work close to your target area, do it.  Figure out how to FLY before you step off the cliff.

Regards from a Grumpy Old Man,

Charles LeMaire

This isnt going to end well.....................................Ninja Trading.  These companies make their money by choosing the right name.  I bet they spend millions focus grouping .

Tasty Trade.....yum yum yum.

Of the Planets 8,000,000,000 inhabitants how many have made it trading the day?

@Lenny Smith you can only make 3 day trades a week before being flagged as a pattern day trader which puts the $25k restriction in place, the account probably lets you open it with as little as $400 but they are expecting you to do buy and hold investing.  

When I say you are behind the algorithms, you the day trader are trying to do the same thing the computer is, but you will likely have delayed information, slower reaction times, and the computer will make math based decisions 100% of the time, not to mention the computers that do this are right next to the NYSE and have maxed out their internet connections so that they can beat out other trading computers.