Windfall, what to do?

[Buckwheet]

So to keep a super long story short.

Bought just over 80,000 Gillette Razor blades last weekend for $7,000. Retail value on them is around $100,000.

I sold them all in two hours through E-Bay, already shipped them and the wire transfers came through and everything so I don't have to worry about fraud.

So, the choices I have already made are:

1. New roof for the house
2. New HVAC system for the house with air purifiers and ductwork.
3. Remodel our sunroom with heated flooring(I live in MN)
4. A couple electronic devices I want.

Anyways that leaves me with quite a bit left over, about half I would imagine.

Is it better to continue to invest in our home with things like a bathroom remodel, new windows and siding etc, or should I open an after tax investment account and dump the money in that, or just pay the balance on our mortgage?

I should point out that we have tried to control all our spending over the past 8 years so that we can live off the lowest income makers salary without much issue, so its not like we are underwater on the mortgage or paying for multiple car loans.

The only debt item we have is our mortgage, no credit cards or student loans.

The interest rates look like a wash between investing and getting a home equity line of credit to do a bathroom or kitchen remodel, but we can easily afford the monthly payments on such a thing so maybe its better to invest the money now, then save the cash up over a couple years and just pay cash for the upgrades then?

I am way over thinking this I know, but it seems like we can't go a day without some home improvement company sending us a flier that we used to get a couple years ago and pricing is way way down from a few years ago.

So any ideas or thoughts would be appreciated.

[waywardgs]

Did they fall off the back of a truck?

[Buckwheet]

Nope.

Bankruptcy auction. I have been going to a bunch of them, just never turned the profit margin like this before.

I usually roll the profits into the next buy and so fourth.

This result came from a $155 investment and I just have been re-investing ever since.

But I don't think I will see this rate of return on a $100,000 investment. So I am going to keep about $10k liquid for the next auction and invest the rest.

[BriarFox]

Are you going to make more on the investment account than you would pay in interest on the mortgage? Would you lose enough on your tax write-offs for not having a mortgage that it would make sense to keep it?

On another note, congrats! That's an awesome turn-around.

[Archigeek]

Well the house stuff should really depend on need.

If you have roof leaks, or if your roof is past its waranty period, replace the roof. That should be a priority if it needs work as a lousy roof leads to a bunch of other problems.

Similar deal with the HVAC. A nice central air system with a good purifier is pretty great, and if your current HVAC is an energy hog, or pretty old, that's not a bad place to put your funds. Not as high a priority as a good roof though, unless the thing is on its last legs.

Nice bold move by the way. Glad it worked out for you.

[Buckwheet]

Are you going to make more on the investment account than you would pay in interest on the mortgage? Would you lose enough on your tax write-offs for not having a mortgage that it would make sense to keep it?

On another note, congrats! That's an awesome turn-around. I'd love to know how you found the Gillette deal in the first place if you want to PM me. :P

We have a 4.75% mortgage, I believe my investment guy said he thought 5-6% was doable in an account that wouldn't be tied to retirement.

So for the tax issue, I will admit we sort of scam the system. So one trick I learned years ago is that if you get something for free that doesn't mean the intrinsic value is zero according to the IRS.

So my wife finds crazy deals where things end up being free and we just donate them, we would donate money and such to the causes, but we feel with can supply more product than our money would get through this.

So an example of this was Target had a $1 off Chef Boyardee coupon. Con Agra the maker of Chef Boyardee had a buy any 10 Con Agra food products and get $2.50 off a ground beef purchase. Target was running a sale on Chef Boyardee with most of them being 98 cents.

All I can tell you is that I sent 400 cans of Chef Boyardee to a local food shelf. Two different tax guys put it in our taxes as a donation with a value at the 98 cents per can price.

Another example is these white t-shirts from target called Boyfriend T-shirt.

Champion was running a $5 off coupon on any purchase. Target put the shirts on sale for $3.50 for two of them. We are getting ready to send out 500 or more shirts to charity.

On top of that we participate in Toys for Tots, other food drives, and I purchase wholesale lots of computers to fix up in my spare time and donate all the remaining working ones to charity.

We usually end up owning at most $100-500 at the end of the year.

Edited to add:

For the auction I just read the local newspapers, not the Minneapolis/St. Paul ones but the local city papers. You can find auction announcements in them. I also drive around some of the areas that are getting run down near me and get the names of the auction companies that do things like houses or cars. I show up and bid or buy a few things and chat with them. Another place I have found that I have done a lot of computer stuff through is called proxibid.com.

[Buckwheet]

Well the house stuff should really depend on need.

If you have roof leaks, or if your roof is past its waranty period, replace the roof. That should be a priority if it needs work as a lousy roof leads to a bunch of other problems.

Similar deal with the HVAC. A nice central air system with a good purifier is pretty great, and if your current HVAC is an energy hog, or pretty old, that's not a bad place to put your funds. Not as high a priority as a good roof though, unless the thing is on its last legs.

Nice bold move by the way. Glad it worked out for you.

Yes, the roof just passed the warranty period this year.

The hvac system is 18 years old, not much of an energy hog, but I heard 15-20 is the life of the system we have in there anyways. So those two things are going to get done.

So I figured those two were super important to get done.

[Archigeek]

Yes, the roof just passed the warranty period this year.

The hvac system is 18 years old, not much of an energy hog, but I heard 15-20 is the life of the system we have in there anyways. So those two things are going to get done.

So I figured those two were super important to get done.

Yep. Do them both if you can. And the HVAC may not seem like that much of an energy hog, but the advancements in efficiency have been pretty significant in the last 20 years. Also, you may still be able to get the tax credit for energy efficient expendatures on your house. It's a 15% kick back on materials only if I recall correctly. That's no small chunk of change if you're buying a new HVAC system. I'd double check to see if that program is still in effect and that furnaces are part of it.

In any case, I would put both of those high on your priority list considering the ages of both.

[BriarFox]

Yep. Do them both if you can. And the HVAC may not seem like that much of an energy hog, but the advancements in efficiency have been pretty significant in the last 20 years. Also, you may still be able to get the tax credit for energy efficient expendatures on your house. It's a 15% kick back on materials only if I recall correctly. That's no small chunk of change if you're buying a new HVAC system. I'd double check to see if that program is still in effect and that furnaces are part of it.

In any case, I would put both of those high on your priority list considering the ages of both.

For the furnace, you might look at the high-efficiency (90%+) systems. They're a bit more pricey, but they're better buys in the long run. Definitely buy a good brand-name - Ruud, for instance, is good but not overly pricey. You'll probably pay a bit over $1000 for the furnace itself, then you'll be paying mostly labor charges to the installer. If he has to run new gas lines or redo the ductwork, it'll be a bit more pricey. Do make sure that those things DO need to be done first, of course. And, as always, get a few bids.

[Drew]

If you think inflation is bound to rise (as I do) you'll want to hold off on paying the mortgage down.

[Sam]

This sounds like mechanics abuse.

[Buckwheet]

For the furnace, you might look at the high-efficiency (90%+) systems. They're a bit more pricey, but they're better buys in the long run. Definitely buy a good brand-name - Ruud, for instance, is good but not overly pricey. You'll probably pay a bit over $1000 for the furnace itself, then you'll be paying mostly labor charges to the installer. If he has to run new gas lines or redo the ductwork, it'll be a bit more pricey. Do make sure that those things DO need to be done first, of course. And, as always, get a few bids.

Yeah thanks for the info.

I know the ductwork needs to be redone in a couple areas as when we bought the house the runs were kind of jacked.

We shouldn't need new gas lines according to the couple installers we have had out, but I was kind of miffed they all tried to sell me duct cleaning and the OMGZ end of the world talk about bugs and disease was a bit over the top.

They wanted 3x more than just a duct cleaning company did so I told them to stuff it.

[BriarFox]

Yeah thanks for the info.

I know the ductwork needs to be redone in a couple areas as when we bought the house the runs were kind of jacked.

We shouldn't need new gas lines according to the couple installers we have had out, but I was kind of miffed they all tried to sell me duct cleaning and the OMGZ end of the world talk about bugs and disease was a bit over the top.

They wanted 3x more than just a duct cleaning company did so I told them to stuff it.

Er, you could clean your ducts yourself. Just get a high-powered blower, hook it up to the ductwork that comes out of the bottom of the furnace (the air out), then put catch bags around your vents. Turn the blower on, and boom! Clean ducts. Minor hassle, though, I suppose.

[Bobmuhthol]

If you think inflation is bound to rise (as I do) you'll want to hold off on paying the mortgage down.

National inflation doesn't really affect individuals. Your personal inflation rate is what matters. Interest rates, on the other hand, do matter, and I certainly expect that interest rates are going to rise.

[Stretch]

buy lots and lots of pr0n.

wait, what?

[Latrinsorm]

(more) Charity.

[Stanley Burrell]

Just keep mini-maxing and make absolutely certain to attend bankruptcy auctions where razors are being sold.

And buy the razors.

Eventually, you'll control the razor market. Then, you could sell enough to hire people to assemble either a huge razor domino track; video tape it in HD, and get like 10,000,000,000 YouTube hits.

Or, you could find a way to get compound explosives and make it rain razors over the Taliban. Uncle Sam will thank you.

[Kitsun]

You guys were all responsible and stuff. I told him to spend it on hookers and blow.