Serious Money Advice Wanted (US)

[Aabraxan]

Re: Serious Money Advice Wanted (US)

Originally posted by Barinthus
I am about to receive a huge sum of money from a state government that was awarded to me as per a decision made by a state-appointed panel. . . . .

B. How do I hide this money so I can still be eligible for college loans?

No offense here, but might a better start have been to consult a tax advisor rather than to advertise on the internet that you're looking for a way to hide money?

[Japher]

I don't think this is right. I'm not in the tax field, but I think you pay taxes on the front end with Roth IRAs.

yeah, I mean't aren't not are

[Skanky Burns]

The best advice I can give is that you get the level of financial advice that you pay for.

[Japher]

NO! Listen to me!

BUY LOTTERY TICKETS!!!!!!!!!!!!!!!!!

[Arrian]

The lottery: the tax for those who failed statistics.

-Arrian

[Ming]

Originally posted by Colonâ„¢


You think so? IIRC real estate prices fell by 50% in Japan the past 15 years or so.

And even with that fall, they are still probably 100% better than prices were 30 years ago

Actually, Japan is not your typical situation. There are a lot of factors that came into play that really wouldn't happen most places.

[JohnT]

Re: Serious Money Advice Wanted (US)

Originally posted by Barinthus
I am about to receive a huge sum of money from a state government that was awarded to me as per a decision made by a state-appointed panel.

I don't want to squander this opportunity. What should I do? Stocks? Mutual funds? Stuff it in my mattress?

On the other hand, I am about to start graduate school and I don't want to miss out on financial aid. Ok I'm a greedy smuck who want my cake and others. I'm thinking of putting the money into a bank account (credit union if it makes any difference) which also happens to have my mother's name on it along as well as mine. Then I take my name off. I trust my mother explictly and I am not concerned about her screwing me over.

Would this work since I'm not 24 years old or younger so therefore would be considered financially independent for purposes of FAFSA?

So there are several parts here...

A. How do I make best out of this opportunity to make even more money? Or to retire comfortably? Or even make a nest egg for a house to take advantage of equity (I'm a California resident and house market here is nuts - I will never be able to afford a house on my salary).

B. How do I hide this money so I can still be eligible for college loans?

For starters, you don't "hide" anything from the IRS/state revenue agencies. I'm assuming you're asking us how to minimize your tax hit rather than asking us how to put the money in your mother's name - that's illegal. And impossible: you can be sure that the paying party will ask you to fill out a W-9 as they are required to do for all vendors to whom they pay more than $600 to. They might even file a 1099-MISC (or variant).

Secondly, if you are able to afford your college tuition, than you are morally obligated to pay for it, especially if the scholarship you are taking is need based, doubly so if the money you are taking is from the government. However, if your scholarship is ability-related (sports, grades, etc), that's likely another issue.

In short: If somebody wants to shell out for you to go to school because they feel we need more people working on X, or playing sport Y, then take it. If they want to shell out because they think you're poor and can't afford it, don't be a jerk and take the scholarship - pay.

Believe it or not, what you should do depends upon the amount that you are receiving, post-taxes. If you are getting high five, lower six figures after you pay the government, you should invest in rental real estate where you go to college, live in one unit, and rent out the rest. Buy a few books about repairs, learn, and do. You should easily make enough to pay the mortgage, perhaps more. Make sure that your mortgage is paid with a 60% occupancy rate - with college kids, some won't pay, some checks will bounce, you'll deal with summer break, etc. Prepare for that.

[Colonâ„¢]

Originally posted by Ming


And even with that fall, they are still probably 100% better than prices were 30 years ago

Same thing with stocks.

Actually, Japan is not your typical situation. There are a lot of factors that came into play that really wouldn't happen most places.

Real estate bubbles can happen anywhere, and they can pop anywhere.

Point being, real estate is just as prone to boom and bust cycles as most other assets.

[Whoha]

buy some gold with some of the money.

[Barinthus]

That's what I want to do with the money - real estate but since I'm about to start college I won't have time and also it's in San Diego which is one expensive property market.

Guess I have no alteratives but to accept the fact I'll not be able to live off handouts for the next two years.

That's the bit. If I was to receive this award 3 years from now, I'd be eligible for SSI and perhaps even SSDI which I can use to support myself. I have no qualms about working but the program I'm about to start do not allow us to work even part-time.


Just for clarification - I am not interested in doing anything illegal and if things I mentioned are illegal, it's because I didn't know. I just want to exploit any legal loopholes

For most of my life I've seen my parents doing things the honest way and getting shafted while people who take advantage of loopholes getting ahead. Same as for me. For only this once I just want to take a bit advantage.

*shrug*

[Jon Miller]

doing realestate makes a lot of sense..

than you rent out to others.. and live there yourself...

you can probably make as much money as the morgage is from the rent, plus you are living for free and gradually buying a hosue

win/win

JM

[MRT144]

im waiting for this real estate thing to blow up in his face. its not as easy as you all make it out to be.

[:) Smiley]

I'd say this would be a bad time to enter the California real estate market.

I would buy oil on the commodity market. While real estate has a finite supply, oil has a shrinking supply. Later on, you can gouge consumers and get flamed in future Poly threads.

[MRT144]

Originally posted by Smiley
I'd say this would be a bad time to enter the California real estate market.

I would buy oil on the commodity market. While real estate has a finite supply, oil has a shrinking supply. Later on, you can gouge consumers and get flamed in future Poly threads.

wait for oil to go back down a lil bit. and then drown kidicious in it.

[One_more_turn]

Roth contributions are not tax deductable.

You don't pay any taxes on any capital appreciations. In a traditional IRA, you will pay income taxes once you begin to withdraw.

You can withdraw from a Roth IRA after 5 years without penalty, where you have to wait until 59 before you can withdraw from a traditional IRA without penalty.

For me, Roth IRA trumps traditional IRA easily. It's even more beneficial for someone who has a low current income and is sitting in the lowest tax bracket.