The question is not as simple as it seems. 120k, lump sum. The guy wants investment ideas, but there are a few rather large challenges that he will face:
1) Outstanding Debts: Years old, unsettled credit card debt. The debtors have not sued or contacted him in years, but this could be a factor.
2) Tax implications: The revenue is coming from the sale of inherited property. He has no idea what the potential tax ramifications will be. For that matter, neither do I.
My read on the situation is that getting the money into his name with any sort of legitimacy is going to be tough. Banks will report the rather large deposit into his accounts directly to the IRS and any potential investments may be subject to lean by the creditors.
My advice was to put the money into a coffee can and bury it. Spend the cash as he needs it. Really, I see no way to integrate the capital into his name without collection attorneys and others lining up to get their piece. Perhaps a better way to secure the cash while still being able to access it is for him to divide the money up and put it into several safe deposit boxes. But even then, I am not sure if interested parties will have the ability to attach the boxes.
Of course, he wants to invest it in CD's or Blue Chips for his retirement...but I don't see any way to accomplish that without raising a ton of flags.
At the end of the day, it is a great problem to have, but has a good chance of becoming bittersweet. If it was me I would try and store the cash and either buy bonds or deposit it into many different bank accounts in small chunks over time. It is risky, but really, what good is a bunch of cash if you can't deposit, invest, or spend it?
In any case, this guy is climbing the walls and actually looking to me for meaningful advice. There are some smart guys on here......Any ideas?
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