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No More Alternative Income Reports

April 1, 2010 by Lazy Man 14 Comments

Today, I’ve decided to formally end my Alternative Income reports. I don’t think too many people will miss them since I haven’t done the reports in around months. Some might wonder why I stopped doing them. Well, a wise friend of mine once said that if he ever hit the lottery, he wouldn’t tell a soul for six months, while he set up proper estate planning. Nearly six months ago, I found myself in that exact situation. So behind the scenes here , I’ve been taking his advice and implementing his plan.

With that fortunate bounce of the ping-pong balls, I had been more preoccupied with making sure that it was protected than blogging about my Alternative Income. The few thousand a month that I make is really just a drop in the bucket in the grand scheme of things.

As for the overall estate planning, I should give some details on how I managed it. First, I opted to take the money as a lump sum payment and of course significant taxes were taken from it. The rest of it was divided up in the following ways:

  • Spending Spree – 5% – Earlier this week I had a problem of not being able to figure what I wanted for my birthday. This is a direct result of that spree. Once I got a new computer and a few other toys it was time to be a little more responsible.
  • Speculative Investing – 5% – This is the money that I put into speculative investments. For instance, some of that money went to Lending Club and some of that money will be used for me to expand this website and expand my web presence elsewhere.
  • Annuity – 30% – Putting 30% of the money in an annuity gives us a guaranteed stream of income which will help us live our lifestyle. Think of it as an emergency fund on steroids
  • Domestic Stocks – 20% – A simple purchase of Vanguard’s Total Market Index ETF (VTI) filled this easily
  • International Stocks – 20% – A simple purchase of Vanguard’s All-World ex-US ETF (VEU) covered this well with no duplication of the above
  • Various Bonds – 20% – The Vanguard investing tripod stands strong with the purchase of Vanguard Total Bond Market ETF (BND).

One of the more challenging issues was making sure that I didn’t put too much money in one banking institution. The reason I wanted to spread it around was in the rare circumstance of bank failure, I could still count on FDIC insurance to help out.

How would you have handled a sudden windfall like winning the lottery?

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Comments

  1. kosmo @ The Casual Observer says

    April 1, 2010 at 5:09 pm

    Regarding FDIC, some banks will offer you a financial instrument that entails THEM splitting the the amount between banks. Basically, you give Bank A a million dollars. Bank A puts 100K into an account in Bank B for you, 100K in Bank C, etc. This keeps the amounts under the FDIC max with no extra work for you. I forget the exact name if it.

    Something to look into.

    Reply
  2. Andy Hough says

    April 1, 2010 at 5:40 pm

    Hmmm?…Interesting day to post this.

    Reply
  3. Investor Junkie says

    April 1, 2010 at 8:19 pm

    @kosmo @ The Casual Observer

    You are referring to CDARS

    http://www.cdars.com/

    Reply
  4. Josh says

    April 1, 2010 at 11:27 pm

    @Andy

    Nice I forgot about what day it was and was thinking i should start buying lottery tickets

    Reply
  5. Lazy Man says

    April 2, 2010 at 5:48 am

    At least I got someone ;-).

    Reply
  6. Cos says

    April 2, 2010 at 6:25 am

    did you use any of your lottery winnings to get your tank back out on the road?

    Reply
  7. Lazy Man says

    April 2, 2010 at 6:34 am

    I realized that I didn’t really want a tank anyway.

    For those wondering what Cos is referring to see:
    Budgeting for a Tank

    Reply
  8. kosmo @ The Casual Observer says

    April 2, 2010 at 9:42 am

    @ Investor Junkie – Yeah, that’s it.

    I’ve always wondered why the FDIC didn’t just impose a global limit per investor, regardless of how many accounts they have. Using CDARs or manually opening accounts at several banks is a pretty obvious workaround.

    Reply
    • Lazy Man says

      April 2, 2010 at 10:24 am

      I think the FDIC wants you to strongly encourage you to diversify your holdings in case a bank does fail.

  9. Brandy says

    April 2, 2010 at 10:27 am

    We won back in July. We spent the money by paying the house off and paying off our two cars. And we spent some on fixing our house up. We also gave alot to charity. And of course the govt got about 1/3 of it.

    Reply
  10. Jon says

    April 2, 2010 at 11:13 am

    As I was reading, I was thinking how ironic it was that a guy who writes about careful planning, budgeting, and gradually accumulating wealth would hit the lottery. Then it hit me just what day it was. Perfect deadpan delivery!

    Reply
  11. Lazy Man says

    April 2, 2010 at 11:26 am

    Thank you, Jon. Steven Wright is one of my favorite comedians – I learned the deadpan from him :-).

    Reply
  12. Brandy says

    April 2, 2010 at 11:34 am

    aahhhh mannn I just realized I was had. Durn. Forgot what day you posted this on.

    Reply
  13. The Digerati Life says

    April 8, 2010 at 10:29 am

    Alternative income reports are the win. You need them here man, thanks for the prank!

    Reply

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