|Quoting IFACN (Thread starter):|
What will be your strategies to use this money?
I mean, will you spend it all as fast as possibile or will you plan some investments (houses, financial investments, etc.) ?
I do quite a bit of investing (in fact, about 80% of my income comes from investments), so I feel qualified to reply.
First of all, 500K Euros is a quite decent amount of money. Not quite enough to live on alone (sorry, but you'll have to keep working), but enough to set up for a very nice retirement, especially at your age.
The most important thing is education. If you know something about valuation of securities (stocks and bonds) you can make a hell of a lot more money trading than you can by simply giving it to a bank. Last year, I made about 45% return on my portfolio. I did it by setting up an account with a discount broker and setting up a balanced portfolio which I watch on a daily basis. I spend my weekends and some of my evenings examining the market and finding new opportunities.
Giving your money to the bank to manage will end up costing you a lot in fees, and in order to minimize the fees you will be largely restricted to funds, which incur their own fees and will never match the agressiveness of managing your own portfolio, which is just professionalism, as they will never go for the big-risk/high-return possibilities that pop up when managing other people's money. If I were managing other people's money, I would do the same.
And of course your bank will try to sell you its own funds, which might not be as good as other options.
As far as buying or paying off a home, that requires a bit more calculation. If you are now renting, or if you have a mortgage, can you afford to keep up with your payments without dipping into your capital? Also, if you manage your own portfolio, you can make a lot more money by continuing to pay a mortgage (which costs you 4% or so) and making a bigger return on your investments. In other words, paying down your mortgage will allow you to save 4%, but you can no longer make 10-20% on that money (a return that almost anyone can do).
If you don't know much about the securities market, but would like to learn, here is what I would suggest. For now, park your money at your bank, and buy a few funds - at least 5 of them. Spread them around the world. Make sure you have an Indian fund - that country is just exploding. Morgan Stanley and Fidelity have a couple of good Indian funds.
Then, start learning about the markets. Take courses and read books. Sign up with a virtual stock exchange, like this one.
This gives you a fictional sum of money to invest, and you can cut your teeth on that and make your mistakes here before venturing out with your real money.
After a year or two, open an account with Internaxx, a discount broker based in Luxembourg. They deal in all the major markets, and their fees are far, far less than a bank's. They are the ones I use.
I'd go further, but I have to run. I'll check back later if you have questions.
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