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Question for the Money Doctors

Question submitted on Jul 1, 2014.

Question

I just inherited $100,000. What is best thing to do with it? I have $100,000 ira account, $15,000 in savings and owe $101,000 on a townhome. I am divorced.

Answer

Hi.  I am always a fan of paying of debt, especially when you have an unexpected windfall.  There are 2 reasons.  First, paying off debt is a sure thing.  When you pay off debt, you increase your monthly cash flow and increase your long term wealth by the interest savings.  The second reason is that you may never get the chance to pay off your house again.   Good luck!


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