^^^^ most of those points are not too far of the mark in terms of what is considered responsible advice (in the UK at least). I would say they are a touch conservative but not massively so.

I'm speaking as a fully qualified investment adviser - though not actively advising clients any longer.

....except the last point you made. That's bang on. Hence my advice being to seek professional advice.

I'm not sure where you got all that from. I'm assuming your own personal experience where you have had either run bad finding a good advisor or you have a terrible eye for finding a good advisor.

I agree a lot of advisors won't beat a vanguard fund over 30 years, but if you find a good FA he will be a favorite to do so.

I agree with bahbah on this.

Remember what OP said, he's 34 with a good job, a kid and a wife. 200k sounds like a lot but it could easily be squandered or used incorrectly. Many of the suggestions so far don't do much to help him.

I'm 5 years older than OP and if the same thing happened to me, I'd follow almost none of the advice in this thread. I 100% would NOT pay off my mortgage, and an 8 month emergency fund sounds really out of line.

+1

Unless you're able to contribute aggressively along with this sum,to retire by 50 you will have to take on a lot of risk. If you plan on really holding it for that long risk is diminished over time and is negligible. If you haven't invested in stocks or bonds before you need to figure out your own personal risk profile.

Everybody knows and will tell you that obviously stocks are the best way to go here. I agree. But, even so some people understand and handle large fluctuations in their portfolios differently. There will be volatility in a portfolio and if a 40% downturn even temporary keeps you from sleeping at night the investments don't match your risk appetite. If a 40-50% drawdown In your entire portfolio would make you want to sell vs buy more your risk appetite is lower.

I would figure this out before you put this money to work. Here is a super basic risk profile questionnaire. There are better ones out there this is just one I found.Wells risk profile questionnaire.

I would stay away from investment properties right now. Maybe some year down the road if you know what you're getting into a duplex or something with a property management company handling the day to day. I was a co-owner of a rental property and one week my cousin switched the phone calls from tenants going to the prop management company we paid to him. He literally got 5-10 tenant calls that one week.

Well said, Jupiter0.

Thank you all for the advice. Please keep it coming. The house situation is a whole other ball of wax. Basically I will be buying my sibling out of their 50% of a 600K house which has a 100k left on the mortgage. I will likely take a loan to pay of the estimated 250K I would owe. Figure the payments will be far less than the 1.7k I pay in rent now. If things as planned I will also be able to continue adding to my savings via my salary.

I am trying to locate this, but Jeremy Seigel included survivorship bias in his research. He had Australia and South Africa on top leading the pack over 7%. Virtually every country showed positive real returns.

I would take the 200K open an account at IB. It has to IB for the low margin rates. Take the 200K and go on seeking alpha or other places and just buy about 15 equities with about 15K in them. The average yield should be 4%. You should add you other assets.

Then if you want you can buy the 50K property in cash at present 1.65% interest. Then over time in about 5 years the property will be free due to portfolio asset appreciation. Thus as time goes on the dividends will eat away at the principal. About every 3 years use the democrats and Fed force the poor to buy you the rich a car for free. You can even deduct the margin interest. Own some foreign stocks and they even let you take a foreign tax credit. Crazy, but thank IB for trying to help the small investor.

Use at own risk and avoid margin if you can.

Put the money in a savings account and do nothing for the next 6 months with it. Do a bunch of research about money. I'd recommend consulting the Bogleheads forum.

In the end, I suspect you're best bet is paying off any debt over say 2-3% interest, setting aside an emergency fund that you're comfortable with, and then putting the rest in an appropriate Vanguard Target Date Fund.

Be wary of taking advice from people itt. We don't know anything about you or your financial situation. We would need to know your income, debts, future plans, insurance, etc. to give any kind of real advice.

Put the money away for now and do your own research.

This is really good advice. Six months doesn't matter at all on $200K. Take some time to get used to the fact that you have this money, think about what you want to do with it. A $200K mistake is a big mistake, but $200K left in the bank for 6 months or a year is no mistake at all. There's 0% chance OP will take this advice though, given this:

Yikes. Possibly the worst way to spend this money; putting it all on red at the roulette table has much higher EV and about the same downside variance over a 5+ year period.

Don't compare to inflation-adjusted because cash held would then have to be compared to the inflation rate and losing value.

You need to compare all options to the same baseline.

The downside to this advice is he decides to become a baller and start spending like no tomorrow since the money is easily accessible.

200k on red does sound sexy, though.

One time, dealer.

Buy and hold low cost index funds like VTSAX. Also, if you're not doing this already, save a part of your income and buy consistently over time.

https://www.youtube.com/watch?v=0r8fn4-wrvI

What's your advice in regards to an emergency fund? (how many months? and/or even have one at all?)

This is the opposite of what you should be doing if early retirement is a goal.

Early retirees don't think like this. Savings/investments should take the lion's share of your income, not individual living expenses. A high savings rate isn't optional for early retirees unless they're making a lot of money.

It depends so heavily on an individual's personal & financial situation that this is hard to answer. For example, under normal circumstances (which will probably be 95+% of my living days) I usually keep $2,500 or less in a checking (and/or savings) account. I have credit cards (& I could probably get a home line of credit at the bank) that I can use that will cover any just in case situations temporarily until I can withdraw funds from my taxable investment account (takes about 3 business days). So for myself I keep less than 1 month's income in my "emergency fund", but I don't really look at it as x month's of income in my checking account - I look at it as a whole dollar amount that I want in there.

I think for a lot of people with taxable investment accounts having a large E-fund is unnecessary. For a lot of people it is a good idea to come up w/ a number you want in your checking account and anytime you get significantly over that amount you send money to your investment account and if you get significantly less than that amount you pull from your investment account (hint: you shouldn't be pulling money back and forth that often).

However, everyone's situation is different than everyone elses so I'd have to know more about that persons personal & financial situation to really give a recommendation for them. I will say this, the ratio of people who can afford an emergency fund that have too much in the E-fund (IMO) to people who don't have enough in it (IMO) I'd guess is somewhere around 100 to 1.

An emergency fund need not be in cash. It just has to be relatively liquid.

there seems to be 2 interesting things going on itt

people are criticizing a lot of posts while providing no advice at all or no explanation

the second is that people are giving investment advice that seem to have no real goal in mind. if the goal is to be old and have more money in your accounts then theres a lot of ways to achieve that and good advice itt but it just seems to be a weird goal

i think a lot of people get caught up in the thoughts of growth and returns and put life in the back seat. imo the idea of retiring at 50 is silly. if you hate your job that much put the money towards tuition or something. if your goal is to retire at 50 to travel it also sounds silly. by 50 youre likely going to be able to handle only one or two month-long (or less) trips a year as long as your health holds up. if you want a warm place on the golf course to spend your winters you can pick that up now for a fraction of the 200k

others have said it would be smart to sit on the money and think about it. i agree. i think theres a lot of things to consider when you talk about retiring at 50 that are problematic and to be honest probably very ignorant assumptions

The fallacy in trying to do this is most people have insufficient skills to find the good FAs (even assuming they exist). They will end up with the best salesman.

In ev terms they are best of choosing a low fee tracker even if a good FA would do better.

And the ones with the skills necessary to find a good FA don't need a FA.

Indeed. This only ceases to be true if it's sufficient wealth to make it worth finding someone else to do the work for you (and sufficient income to make it worth the good FAs valuable time)

For 200k it can't be close to that.

Yeah what percentage of financial advisors would try to foist some kickbacked nonsense like lock-in annuities on small fish OP, to add to their volume, vs those who actually outperform Vanguard with their advice?

I'm guessing it's 80% to 2% or so.