For this exercise, you have just received an inheritance of $500,000. The only s
ID: 2565330 • Letter: F
Question
For this exercise, you have just received an inheritance of $500,000. The only stipulation is that you can’t spend the money for 10 years. Post a 250-300 word financial plan on how to invest that money using the following questions as your guide?
Who are you going to ask for help with this? What should you look for when hiring a financial advisor?
What will your asset allocation be? (Stocks, bonds, mutual funds, real estate, CD’s.)
How much money will you need to accumulate to maintain wealth if the inflation rate averages 3% per year for the next ten years.
How would an inheritance like that affect your taxes this year? If the value of the investment doubled to 1 million over 10 years, how would the $500,000 gain be taxed?
Explanation / Answer
<<See Answers highlighted in Bold>>
Who are you going to ask for help with this? What should you look for when hiring a financial advisor?
I will take help of a certified financial advisor for proper utilization/investment of this inheritance. Key qualifications that I will look for are –
What will funds, real your asset allocation be? (Stocks, bonds, mutual estate, CD’s.)
Investment in assets will be a mix of debt and equity instruments. I would also prefer a diversified portfolio having a mix of commodities like gold and real estate as well apart from bonds and stocks.
How much money will you need to accumulate to maintain wealth if the inflation rate averages 3% per year for the next ten years.
$116,792, computed as $500000- $500000*(1/1+3%)^9
How would an inheritance like that affect your taxes this year? If the value of the investment doubled to 1 million over 10 years, how would the $500,000 gain be taxed?
Inheritance is not considered income for federal tax purposes however the any subsequent earning on that inherited asset is taxable. It will be taxed as per local taxes of that country.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.