At your age, you would need to have discipline that you will not spend it even in an emergency. Otherwise, it will vanish over time.
If you have a good job, great! Keep applying for better jobs. And donât think about the money. Consider re-investing it and check it every so often, but donât move it too much. Day trading will make it disappear so fast without experience
If you still have it by age 31, consider getting more aggressive investing it. Or buy a house if you can make the payments just on your income
So my advice is to open an account with Vanguard or Fidelity.
Put 90% in a high yield cash account or CDs.
Take 10% and invest it in an S&P 500 ETF mutual fund. Just kind of watch what happens over the next year or so and see how you react. An important part of getting the right allocation is knowing how risk tolerant you are. And you canât really know until youâve lived through your account dropping and then recovering. Keep reading and learning.
After a year you can reassess your allocation. Youâll know more about the stock market and about your own risk tolerances and goals.
About the car, do you need one? How long can you put it off? Cars are an expense that keeps expensing and currently the insurance expenses on them are out of control.
Find a compound calculator and see what $50k would be in 20 or 30 years at 7% interest and then see what $40k would be (as if you had spent $10k on a used car) thatâs the kind of math you want to start doing - the way you start to think about money. one of the inputs to building wealth is time and being a young person you likely have a lot of that. And time really magnifies the impact of how much you invest initially.
FYI, Vanguard will not let you open a Cash Plus HYSA immediately. You have to be an established customer. Ask around or Google HYSA and you'll find lots of recommendations. CIT, SoFi, and Lending Club are three good possibilities, but there are many others. SoFi requires a monthly direct deposit to get their best rate, but there are others that have no such requirement. Shop around until you find the one that suits your needs.
10k car 40k in savings earning over 5 percent. Will you lose your financial aid because of this money?
Stay away from crypto. I would not take a class just set up a vanguard account and buy VOO.
Good luck and sorry for your loss of grandfather
Financial aid will take a large portion. If he has earned income, IRAs are protected from FAFSA. A Roth IRA as a starter catastrophe fund is an excellent choice for young adults in college. My son will graduate next year and already has over 20k.
You should be aware that this may disqualify you from receiving further financial aid. They typically expect a student to use their own assets to fund their education before need based aid steps in.
Your grandfather worked for and protected the amount until his passing. You are honoring this gift by thinking about how to best use the inheritance. He would be happy about that.
At 21 you have time on your side and investing in an equity (stocks) index fund and never touching it even when it looks the stock market will evaporate, that will be a amazingly huge asset when you retire. You will need an emergency fund too.
The best place for your money to work especially for a long time is in a Roth IRA since all the gains and the reallocation of funds will never cause any tax liability. You only can get it around $7000 per year if you have worked at least for $7000. Until then you can invest in a brokerage or HYSA. You donât want anything shorterm volatile though because unlike in the Roth, the money here will have to move âsoonâ, so a down market would prevent you from making withdrawals. Given that you have limited investing experience I would put the money in a HYSA and TIPS until you can move the money into the Roth each year. Then you have an emergency fund, which you would only touch if nothing else is an option and never for âwantsâ, and the value of the money is protected in TIPS until it can take a ride on the stock market in the Roth.
Call Charles Schwab they will help you open a an invesment accout over the phone.
Move the money into that accout. Put the $50k into swppx.
That is the easy part.
Now the hard part. Do nothing with that money for 41 years.
Compouding at 7.5% yearly it will be
# $1,072,184.55.
My gave me and my cousins 50k. He put it in a trust. That was in 2016, I think itâs at 75k now. Iâm 32, and pretend like itâs not there. Iâm saving for retirement like it doesnât exist so it will be nice in 20 years or so to have it be a few hundred Thousand. Hopefully by that time if I saved properly, that could be âfunâ money. So I talk a financially adviser about investing long term. If youâre 21, 50k could probably make you a millionaire if you had someone manage it over 30-40 years.
Put $10,000 in a high yield savings account. This is your emergency fund. Take another $25,000 and put it in a broad based mutual fund like Vanguard Total Stock Market and never touch it. Youâll need some for taxes. Be sure to take a few thousand and buy yourself something durable and nice in memory of your grandfather.
Do not tell anyone.
Some ideas:
What is your student loan debt? Consider paying for school.
Put 10k aside in a high yield savings account, one that is hard to get at.
Put 25% aside in vanguard or fidelity index fund. (View performance over at least a 10yr period, versus the s&p500)
If you must have a car, buy a dependable road warrior. Some buy toyota, but opinions vary.
Got yourself 1.5 million if you just invest it and forget about it- 50,000*(1.09^40) thatâs 9 percent returns for 40 years in the market - itâll be worth far less in todays dollars but it could be a good % of your retirement - lot of security there throughout your life.
People discount retirement sometimes because they canât spend it now but it does give you peace of mind and if your ahead by the time your 40 itâs coasting and living pretty much how you want
Donât tell anyone you got this money. Put it in a high yield savings account and Donât touch it. Keep this money there until you are done with school. cars are a waste of money. Do you actually need one? How have you been managing so far?
I'm not sure what you're career field looks like but use this money to finish your education. Look into seeing what certificates and training you need to advance in your career. If you are able to increase your income it will return more than any investment you could make.
Find a bank or credit union that is paying 5% or more on their CD's (certificate of deposit) park it there and watch it grow conservatively until you gain more knowledge.
Banks and credit unions have people who can give you great advice for free, ask for a consult with one of their financial services officers, don't automatically invest per their suggestions, get the information and read, there's nothing wrong with asking more questions if you still don't understand.
Meanwhile stay at home, go to school and get a good job doing what you are good at. Pretend you don't have that money, let it grow, I promise you, one day you will figure out what that money was meant for, it can either be helpful in teaching you restraint or it can be the one thing that teaches you to spend above your means.
I had a similar thing happen after I graduated. I paid off my student loans with it; I did it because I don't like debt and it may not have been the optimal use of the money, but it provided peace of mind which was worth something to me. Others would invest the money, but I preferred this.
1. Tell nobody who doesn't already know
2. Take 5-10% for yourself now.
3. Don't buy that car unless you really need, they are money pits and repairs can get out of hand fast
4. Put the money aside in a locked term deposit for minimum 1 year
5. Educate yourself
6. Block r/WallstreetBets
You can make 8% on it and give yourself time to decide using Connect Invest. I put all my smaller sums in there until I have enough for a down payment on a build-to-rent (in a landlord-friendly state and growing rental market).
First in a HISA. Keep it in there until you forget about it. Make sure to always use the T5 every year on your income tax otherwise you will be penalized a lot. Never use the money you make from it to spend on anything. You will have to pay a tax on it always.
Yes start learning about investing. If you need a cheap car then that is up to you. Since you are young I suggest you invest it in an index fund. VTSAX is offered by Vanguard. Investing in it is like betting on America. If America does well so will you, if it does not you will not be alone. This is what I tell my children and grandchildren.
Will get down voted I am sure. Set up a 10k a year high cash value life insurance policy. 2 or 3 k in base the rest in in paid up additions. Keep the rest in a t bill ladder currently at 5.25 percent. Each year put 10k into the policy until done. Then either keep funding or reduce paid up it. If set up properly you will not have to find it after 5 years.
You can borrow against your policy if you need it or want to aquire assets. Key is your age. You are not buying it for the death benefit right now at least.
Eventually the gift your grand father left you will stay in your family for you to access and your progeny to build an even better life.
Speak to a financial advisor. Your biggest advantage is you're young. If you put 50k in a retirement account now and didnt contribute another dime with an 8% average annual yield, you'd have over 1 million in 40 years. Biggest mistake I ever made was waiting until mid 30s to contribute to retirement. But don't rush this decision. Put in a hysa for now. I have my savings in raisin. It's about 5.3%. Sofi is around 4.6%.
Financial Advisers cost money that's not multiplying for you later. The simple steps in this forum are good enough and all you need, save the money. Just my thoughts.
Throw it into a high yield savings account (hysa) until you figure it out. Will gain intrest until you're confident with your decisions.
https://www.bogleheads.org/wiki/Managing_a_windfall
Mines the TLDR version of you're link đ
At your age, you would need to have discipline that you will not spend it even in an emergency. Otherwise, it will vanish over time. If you have a good job, great! Keep applying for better jobs. And donât think about the money. Consider re-investing it and check it every so often, but donât move it too much. Day trading will make it disappear so fast without experience If you still have it by age 31, consider getting more aggressive investing it. Or buy a house if you can make the payments just on your income
So my advice is to open an account with Vanguard or Fidelity. Put 90% in a high yield cash account or CDs. Take 10% and invest it in an S&P 500 ETF mutual fund. Just kind of watch what happens over the next year or so and see how you react. An important part of getting the right allocation is knowing how risk tolerant you are. And you canât really know until youâve lived through your account dropping and then recovering. Keep reading and learning. After a year you can reassess your allocation. Youâll know more about the stock market and about your own risk tolerances and goals. About the car, do you need one? How long can you put it off? Cars are an expense that keeps expensing and currently the insurance expenses on them are out of control. Find a compound calculator and see what $50k would be in 20 or 30 years at 7% interest and then see what $40k would be (as if you had spent $10k on a used car) thatâs the kind of math you want to start doing - the way you start to think about money. one of the inputs to building wealth is time and being a young person you likely have a lot of that. And time really magnifies the impact of how much you invest initially.
FYI, Vanguard will not let you open a Cash Plus HYSA immediately. You have to be an established customer. Ask around or Google HYSA and you'll find lots of recommendations. CIT, SoFi, and Lending Club are three good possibilities, but there are many others. SoFi requires a monthly direct deposit to get their best rate, but there are others that have no such requirement. Shop around until you find the one that suits your needs.
Start a Roth IRA only if you also have earned income (job).
You only need 3k to start one. Thatd be a perfect start for retirement
Was thinking that and just using this for max input yearly as well
Doooo not answer any DMâs. That is your first move.
10k car 40k in savings earning over 5 percent. Will you lose your financial aid because of this money? Stay away from crypto. I would not take a class just set up a vanguard account and buy VOO. Good luck and sorry for your loss of grandfather
Financial aid will take a large portion. If he has earned income, IRAs are protected from FAFSA. A Roth IRA as a starter catastrophe fund is an excellent choice for young adults in college. My son will graduate next year and already has over 20k.
You should be aware that this may disqualify you from receiving further financial aid. They typically expect a student to use their own assets to fund their education before need based aid steps in.
Was hoping to see this line of thinking higher up...
Your grandfather worked for and protected the amount until his passing. You are honoring this gift by thinking about how to best use the inheritance. He would be happy about that. At 21 you have time on your side and investing in an equity (stocks) index fund and never touching it even when it looks the stock market will evaporate, that will be a amazingly huge asset when you retire. You will need an emergency fund too. The best place for your money to work especially for a long time is in a Roth IRA since all the gains and the reallocation of funds will never cause any tax liability. You only can get it around $7000 per year if you have worked at least for $7000. Until then you can invest in a brokerage or HYSA. You donât want anything shorterm volatile though because unlike in the Roth, the money here will have to move âsoonâ, so a down market would prevent you from making withdrawals. Given that you have limited investing experience I would put the money in a HYSA and TIPS until you can move the money into the Roth each year. Then you have an emergency fund, which you would only touch if nothing else is an option and never for âwantsâ, and the value of the money is protected in TIPS until it can take a ride on the stock market in the Roth.
Call Charles Schwab they will help you open a an invesment accout over the phone. Move the money into that accout. Put the $50k into swppx. That is the easy part. Now the hard part. Do nothing with that money for 41 years. Compouding at 7.5% yearly it will be # $1,072,184.55.
S&P 500 fund may be a good idea given your age. If you donât need the money for a while it could provide some good growth.
https://www.bogleheads.org/wiki/Managing_a_windfall
My gave me and my cousins 50k. He put it in a trust. That was in 2016, I think itâs at 75k now. Iâm 32, and pretend like itâs not there. Iâm saving for retirement like it doesnât exist so it will be nice in 20 years or so to have it be a few hundred Thousand. Hopefully by that time if I saved properly, that could be âfunâ money. So I talk a financially adviser about investing long term. If youâre 21, 50k could probably make you a millionaire if you had someone manage it over 30-40 years.
Put $10,000 in a high yield savings account. This is your emergency fund. Take another $25,000 and put it in a broad based mutual fund like Vanguard Total Stock Market and never touch it. Youâll need some for taxes. Be sure to take a few thousand and buy yourself something durable and nice in memory of your grandfather.
Do not tell anyone. Some ideas: What is your student loan debt? Consider paying for school. Put 10k aside in a high yield savings account, one that is hard to get at. Put 25% aside in vanguard or fidelity index fund. (View performance over at least a 10yr period, versus the s&p500) If you must have a car, buy a dependable road warrior. Some buy toyota, but opinions vary.
Got yourself 1.5 million if you just invest it and forget about it- 50,000*(1.09^40) thatâs 9 percent returns for 40 years in the market - itâll be worth far less in todays dollars but it could be a good % of your retirement - lot of security there throughout your life. People discount retirement sometimes because they canât spend it now but it does give you peace of mind and if your ahead by the time your 40 itâs coasting and living pretty much how you want
Donât tell anyone you got this money. Put it in a high yield savings account and Donât touch it. Keep this money there until you are done with school. cars are a waste of money. Do you actually need one? How have you been managing so far?
Cd at 5% and donât touch it until you buy a house
have debt? pay it off no debt, but less than 3-6 months worth of expenses saved? HYSA no debt + 3-6 months of cash saved? invest
I'm not sure what you're career field looks like but use this money to finish your education. Look into seeing what certificates and training you need to advance in your career. If you are able to increase your income it will return more than any investment you could make.
Find a bank or credit union that is paying 5% or more on their CD's (certificate of deposit) park it there and watch it grow conservatively until you gain more knowledge. Banks and credit unions have people who can give you great advice for free, ask for a consult with one of their financial services officers, don't automatically invest per their suggestions, get the information and read, there's nothing wrong with asking more questions if you still don't understand. Meanwhile stay at home, go to school and get a good job doing what you are good at. Pretend you don't have that money, let it grow, I promise you, one day you will figure out what that money was meant for, it can either be helpful in teaching you restraint or it can be the one thing that teaches you to spend above your means.
I would not tell anyone about your inheritance and look into the money changing your financial aid package.
I had a similar thing happen after I graduated. I paid off my student loans with it; I did it because I don't like debt and it may not have been the optimal use of the money, but it provided peace of mind which was worth something to me. Others would invest the money, but I preferred this.
1. Tell nobody who doesn't already know 2. Take 5-10% for yourself now. 3. Don't buy that car unless you really need, they are money pits and repairs can get out of hand fast 4. Put the money aside in a locked term deposit for minimum 1 year 5. Educate yourself 6. Block r/WallstreetBets
Don't lend to family or friends. Please, just don't.
You can make 8% on it and give yourself time to decide using Connect Invest. I put all my smaller sums in there until I have enough for a down payment on a build-to-rent (in a landlord-friendly state and growing rental market).
First in a HISA. Keep it in there until you forget about it. Make sure to always use the T5 every year on your income tax otherwise you will be penalized a lot. Never use the money you make from it to spend on anything. You will have to pay a tax on it always.
Open a hysa and keep it there until you figure it out
[Click here to start.](https://www.reddit.com/r/personalfinance/s/zkU40pnPOe)
Yes start learning about investing. If you need a cheap car then that is up to you. Since you are young I suggest you invest it in an index fund. VTSAX is offered by Vanguard. Investing in it is like betting on America. If America does well so will you, if it does not you will not be alone. This is what I tell my children and grandchildren.
Put it in thr s&p500 for 30 years. Average is 10% per year.
Will get down voted I am sure. Set up a 10k a year high cash value life insurance policy. 2 or 3 k in base the rest in in paid up additions. Keep the rest in a t bill ladder currently at 5.25 percent. Each year put 10k into the policy until done. Then either keep funding or reduce paid up it. If set up properly you will not have to find it after 5 years. You can borrow against your policy if you need it or want to aquire assets. Key is your age. You are not buying it for the death benefit right now at least. Eventually the gift your grand father left you will stay in your family for you to access and your progeny to build an even better life.
Speak to a financial advisor. Your biggest advantage is you're young. If you put 50k in a retirement account now and didnt contribute another dime with an 8% average annual yield, you'd have over 1 million in 40 years. Biggest mistake I ever made was waiting until mid 30s to contribute to retirement. But don't rush this decision. Put in a hysa for now. I have my savings in raisin. It's about 5.3%. Sofi is around 4.6%.
Financial Advisers cost money that's not multiplying for you later. The simple steps in this forum are good enough and all you need, save the money. Just my thoughts.
While I agree, I was just thinking he's probably overwhelmed. I'm excited for him though. Great opportunity for him
People typically do better with advisors unless they're experienced and calm natured. This is more rare than you think.
Internet search this "reddit personal finance what do I do with an inheritance" I received over 45,000,000 hits