I have a somewhat unique situation and I wasn't able to find a post in the forums that specifically covered it. I apologize if this reads like a repeat of a common topic (lots of the general windfall advice will likely apply here). However, the situation is just different enough for me to still have questions after reading up on other windfall posts.
In 1998 my dad was encouraged by his financial advisor to invest $5,000 in a stock in my name as a way to offset his taxes that year. I'm not sure the logistics of that, but he did indeed make the investment. He chose to invest the $5,000 into O'Reilly Automotive stock (ORLY). He then FORGOT that he had done this until a couple months ago. The result is that, after 23 years and several splits, I am now the owner of 738 shares of ORLY at a current value of $440,733.60. This is not an inheritance nor is it a stock transfer. It was purchased under my name and the first shares have already hit my Merrill Lynch account (my father uses Merrill so the cleanest solution was for me to also open a Merrill account).
I am a novice when it comes to investments and financial literacy. However, I finally had a decent amount of money in savings and I was on the cusp of beginning my investment journey. The Bogle method seemed perfect for me. And then this windfall happened and things went from "novice" to "advanced" very quickly.
I have some very basic questions and would love any feedback and advice:
- Are there any tax implications I need to be aware of now that I am in full possession of these shares?
- What steps do I take to re-invest these shares in index funds, other stocks, bonds, etc? I legitimately do not know the basics of buying and selling stocks
- Is there a way to use a Roth IRA to my advantage in this situation? I do not currently have one.
- Are there any benefits to opening a Vanguard or Fidelity account rather than using Merrill? If so, are there fees for transferring between these accounts?
- In general, what would your strategy be given this situation? I've listed goals and personal information below for context
Financial goals: Buy a home in 5-10 years and begin legitimately saving for retirement
Life status: Early 30s. Married. Wife gainfully-employed. No children. Currently renting in very high cost of living Los Angeles. We would either look to buy a home here (wishful thinking even with the windfall) or buy a home in the midwest and move back. I work in the volatile film production world, which is a "feast or famine" financial lifestyle (hence my late entry into the world of investing).
Emergency funds: Three to six months of expenses
Debt: No current debt
Tax Filing Status: Married Filing Jointly
Tax Rate: 22% Federal, 9.3% State
State of Residence: California
Age: Early 30s
Savings: $27k
Investments: No investments or stock portfolio outside of the new ORLY stock
Retirement: No IRA or 401k (wife has a 401k through her employer)
Annual income: Income fluctuates between $60k and $75k/year. Wife makes roughly $100k/year
Desired Asset allocation: 70% stocks??? / 30% bonds???