-By a miraculous chain of events, we have a windfall coing of approximately $180,000.

We could pay off all debt - credit cards. student loans for kids, cars, and Y2K preps -OR- we could pay off our property/mortgage and about half the debt (leaving a few cards with "life of loan: rates of about 5.9% average).

We are really torn as to what is most prudent. Many see the market/economy heading south soon (that World News Headline in the post below was real convincing! ;o) ) I'd like some free advice - if you were coming into this kind of once-in-a-lifetime dough, what would you do with it (and I'm NOT buying the dips!)

-- Maeve (havesomebucks@ParkPlace.com), January 17, 2000

Answers

Maeve, let's get together and talk about this. The e-mail is real.

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-- Squirrel Hunter (nuts@upina.tree), January 17, 2000.

I am not going to say what to do. But the value of Japanese real estate dropped in half in the 90's due to their recession/depression. ( my brother lives in Japan). So IF there is the slightest chance you think you might be moving in the next ten years, it would be wise to at least get the mortgage down to half the present value,( and even less to account for moving and closing costs,) in case we go the same route Japan did. We recently needed to refinance and kept our debt to half the value of the home now, hoping that a depression wouldn't send the selling value any lower. Wouldn't hurt to give a little to the poor and needy somewhere too, God has a way of taking care of the generous.

-- princess (princess@sunshine.com), January 17, 2000.

Buy some gold. It will seriously appreciate relative to dollars. Make sure your home is secure. If it can be paid off, bear in mind it will likely not return the same level of dollars in the future after the great devaluation. Maybe pay off the property if it can sustain you. And then put the rest in gold. Take the money usually put into the mortgage and pay down the cc bills.

bona fortuna in millennia nova.

-- pliney the younger (pliney@puget.sound.com), January 17, 2000.

I cannot concur with the recommendation to pay down your mortgage to 50%. Let me relate my father-in-law's story about his family's experience during the Great Depression. His father was a wealthy farmer in Iowa, and owned several different business' in his town and across the county. In 1928, he made a substantial pay down on his debt, which was against his farmlands. Next year he planted popcorn as a cash crop, but when the stock market crashed he couldn't give the stuff away. Because his lands were still worth something, the bank quickly foreclosed on his properties and he was wiped out. Had he been either completely out of debt, or borrowed up to the max, he might have been to salvage something. As it was, he was a broken man, and never recovered. If I were in your situation, I would pay off all debt except for the mortgage. You would gain more financial flexibility, incease your net income (by not having to make monthly payments), and could deal with the house mortgage as best meets the unfolding situation. If there were any funds left over, I would be extremely cautious and try to hold on and wait to see what opportunities present themselves. My opinion, for what it's worth.

-- Sure M. Hopeful (SureM@hopeful.com), January 17, 2000.

Regarding debt and bankers....

If I owe you 10 dollars, you've got me. If I owe you 10 million, brother have I got YOU.

Either pay off your mortgage totally or not at all. Do not pay it down to a 50% level as that is an acceptable risk for a banker if he has a chance to forclose.

-- Lobo (atthelair@yahoo.com), January 17, 2000.

I know the stock market is considered the next great evil in this forum, now that Y2K is no longer a viable distraction, but I would suggest a nice portfolio of mixed blue-chips and high growth stocks or high return mutual funds - after paying off any high interest debts like credit cards.

Even if you don't follow that advice, do this - pick some stocks and mutual funds that show promise, and some good blue chippers, and then *pretend* that you invested in them. Keep track of what the purchase price was, keep track of any stock splits so you can adjust the purchase price and the number of stocks owned, and then check back every couple months to see what your gains could have been. I guarantee you that, if you didn't pick dogs (and a $150 consultation with a broker or fin. advisor can get you a fair portfolio,) you will be kicking yourself in a couple years if you kept your portfolio "pretend".

-- Bemused (and_amazed@you.people), January 17, 2000.

Gold (bullion that is, the mines are literally a MINE FIELD, you'll lose an arm or a leg; research carefully)

#2 Check on that mortgage fine print, under what conditions can it be recalled- thus forcing you to refinance at current rates (which may be way up there in the 30% or higher in the near future). Maybe a fixed rate mortgage is a good idea.

#3 Pay up all other d

-- hunchback (quasimodo@beltwor.com), January 17, 2000.

Buy bouillon, beef bouillon.

-- (howierrrruff@salt.lake), January 18, 2000.

Put in a CD for six or twelve months while you decide what to do.

Stop telling people about it.

Study your options while the money is parked somewhere and then decide.

Make sure whoever gives you actual help handling the money has no personal financial gain from the decision of what to do.

-- I'mSo (happy@prepped.com), January 18, 2000.

Give it to me! I'll take care of it!

-- Pikachu (zxcv@zxc.com), January 18, 2000.

Pay off the house and the student loans. If you can, invest what's left and use the profits to pay property taxes. The rest of your debt will be gone soon enough without those beasts on your back.

Btw, since I might be faced with the same 'problem' myself I've spent alot of time thinking about how to handle this situation. I have options in a software/web company that's going public sometime in the next 6-8 months and if the market doesn't crash before then (fingers crossed!) I will be able to pay off the house, put money away for the kids education and pay off all my debt. If the IPO goes real well I'll be able to retire (no joke!). Then I can spend the rest of my days chasing my wife around the house and working on a project I back-burnered a few years ago because I ran out of funds.

So to all you market mavens who are hoping for a crash...can you hold out just one more year? Please?

-TECH32-

-- TECH32 (TECH32@NOMAIL.COM), January 18, 2000.

Maeve...first make sure it is in a safe place and a little interest on it would be ok too. But nothing risky. Then sit back and take a deep breath and look carefully at your options.These are very nebulous times and I wouldn't be in a hurry to do anything re investments. I would certainly pay off the credit cards. I don't know about student loans. I feel that the students should be paying off their own loans, not mommy and daddy. I think that your mortgage should be an all or nothing deal. Either pay it all off or don't pay any of it off. And a lot of that depends on where you live and how long you think you will be there. If its a piece of land that can sustain you and you LIKE living the self sufficient life, and you are never going to move, then pay it all off. If its a house in the 'burbs, keep the mortgage. We are totally debt free. We have a lovely home, some land that can sustain us if necessary and the skills to do that. I have to tell you, we sleep real well at night knowing we don't owe anyone. And when my SS check comes in, I can spend it however I want. This month I bought a new rug loom using my saved up SS. Next month I am getting a dishwasher come hell or high water. So....get out of debt, with the exception of mortgage, and this is the clincher: DON'T GET BACK INTO DEBT NO MATTER HOW BAD YOU WANT SOMETHING. SAVE AND PAY CASH! Just thoughts from a pretty content old lady. Taz

-- Taz (Tassi123@aol.com), January 18, 2000.