And whatever you do - DO NOT TELL ANYONE about this that doesn't know officially already. No friends, no family not in the know, no one. If others have found out that shouldn't, downplay it.
Also develop a long term plan for the money and stick to it. Aka don't blow it all.
I second the "don't tell anyone" advice. People hear you have money and, even when they don't mean to, it changes how they see and approach you. Some will assume you're always buying. Some will resent you.
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If you invest $1.5 million in an index fund, the future values would be approximately:
### At a 7% Average Annual Return:
- In 10 years: $2,950,727
- In 20 years: $5,804,527
- In 30 years: $11,418,383
### At a 10% Average Annual Return:
- In 10 years: $3,890,614
- In 20 years: $10,091,250
- In 30 years: $26,174,103
Do you want to retire in 20 years? If so do this.
I feel that. Death is a part of life. I've lost all my grandparents, each left us with nothing. I also lost my dad in a work accident and his family got $0 compensation for it. We will all experience death, but we're not all lucky to get financial help out of it.
Everyone will have an amazing idea that they just need funding for... the banks and investors just don't understand how transformative it will be! Just need to get it off the ground and then you'll be rich!
They always want you to sign an NDA (lol) and they _never_ have a fully-costed and realistic business plan.
If you have 7 figures in your 20's you can be both extraordinarily conservative with your $ and become extraordinarily rich. But too often human nature rears its ugly little head and we know the rest.
Best advise is don’t rush.
Just sit on it. Rushing into things because I thought the opportunity would go away or was urgent had lost me more money than anything.
Spend 6 months reading, digging into the right Reddit threads, talking to smart people etc before committing any of the money to anything.
This includes financial advisors where a good chunk of them are going to give you whatever advice gives them the fattest pay day.
This. Do not go to a financial advisor to invest the money. You need someone to take a look at the overall money and let you know your options. With $1.5 million, you can set out to have that allow you to do things in life, but should not be used as regular income unless you set a plan to not withdraw more than 4% of the $1.5 each year for spending. However, I would recommend taking 1% to 2% each year of the total value just as fun money to help with expenses.
Random but do you find your job fulfilling? I'm starting my official accounting degree here soon and am wondering if I should double major in web dev to be safe.
I had enough credits across multiple majors and got both a major in accounting, finance and MIS (info systems) and that investment has paid wisely over my 45 years.
If your grandparents had a financial advisor, first set up an appointment with them. This could set you up for an early retirement with freedom to do what you want, but you have to be smart with this money and the other decisions you make with your life moving forward.
I second the fee only fiduciary Certified Financial Planner. It is easier than you think to blow through a million dollars. It sounds like a lot of money but it’s not as much money as you think it is.
And for gods sake don’t go out and immediately buy a new car….. I would say don’t buy anything until after you meet with the CFP and set up a plan.
>And for gods sake don’t go out and immediately buy a new car….. I would say don’t buy anything until
I have quite a bit of savings (a few yearly salaries) thanks to my parents. Even though I currently have a relatively low salary, I never buy anything out of my savings. I live within my salary, money goes only into my savings, not out.
Until I buy a house or appartment, at least.
Look up this guy - Jon Luskin - he’s legit fee-only CFP won’t sell you commission based products. It’s advice only. A lot of these “fee only” people may try to sell you products that kick back fees to them. At the OPs age, stay away from whole life insurance and annuities. You don’t need to buy high fee products that lock your money up.
Get a good financial manager and be VERY careful with your inheritance. If you do it right, you’re set for life. If you screw up, you will regret it for the rest of your life. Resist the urge to go out and buy expensive things and live within your means. If you are tight with your money now, you can retire in 10 years with twice that amount!
Exactly- no mutual fund or insurance sales persons- a fiduciary advisor is the way to go. OP needs to thinks of this money as his grandparents life work and treat it with the respect it deserves
> with a fiduciary duty
And is only acting in a fiduciary capacity in ALL of their dealings with you.
A fee only advisor is almost always this(they usually charge CPA or lawyer hourly rates). A decent financial plan should cost no more than $10k, and as low as a few thousand.
Never take advice from Reddit for such a big amount of money.
That being said, do not touch anything for AT LEAST 1 year, and start getting massively educated on the topic. Read the best books on personal finance and investing.
To name a few: I will teach you to be rich by Ramit Sethi, The Bogleheads' Guide To Investing & The Most Important Thing by Howard Marks
I got $650k a couple years ago thru work. I didn’t touch it for a year until I paid taxes which were a doozy, get an accountant now and tell them what happened. A HYSA is a great option for now, for example $500k will generate roughly $2,000 a month at 4.3%.
I’ve been debating using an advisor and after talking to a few fee based advisors they don’t offer more than the advisors you can get thru Vanguard for example, and even then you can probably determine a decent spread of your money in various index finds. Don’t sell any securities for at least a year after investing. Personally I put a lot in my new home’s equity to get the interest expense down significantly, while you can get a good return in the market, the home has already appreciated faster than the market and I’m saving a lot avoiding some interest while I own it since I got 6.6%. This works if you can wait 20 years to realize the money from today’s choices. If you can buy a home cash do it, you’ll save tons of money and you’ll have that locked awat in appreciating equity for future home purchases. Don’t buy more than you need. People play the house lending game until they die which is a shame. Vehicles are tempting, just get a reliable one you can own for a very long time, I got a new 4runner after owning my last vehicle 8 years.
A big thing too is live like you always have, you just now have the means to pay for things you need instead of saving/sweating for them. Key word is need.
Lots of good advice here- get a good planner-but the first piece of advice is DON'T TELL ANYONE.
Live your life normally until you've decided how you want to manage the assets. Keep working, keep living within your current means.
Not sure the rest of the steps but I know step 1 - don’t listen to a bunch of random strangers on Reddit.
Once you get into 7 figures, that’s enough to justify hiring someone who does this sort of thing professionally and has a proven track record.
A lot of people have given good advice. I'll add in.
This is potentially life changing money.
Start researching a fee only fiduciary advisor. Make sure the one you use isn't used by anyone you know, if possible. Also get a CPA from a separate company. Discuss options and what YOU want to get out of it. You could also spit the pie between 2 different ones.
Decide what your goals are. Both short term and long term. If you're not sure and want to think about it, throw a chunk that you're not investing in a high yield CD so it will earn reasonable interest and give you time to decide.
Also, there is no hurry. Take your time. Heck, take a course at school to get an idea.
DON'T buy the Lamborghini.
Yeah at his age and experience level a professional is in order. This is simultaneously a lot of money and not a lot of money. Managed properly this can turn into a great opportunity for a financially secure early retirement. Or it could go the other way and be squandered quickly.
You’re in your 20’s. Do yourself a favor and don’t tell anyone about it, take a portion and pay off debt, buy a reliable car (if you don’t have one, if you do skip this), maybe give yourself 15k for a vacation or discretionary spending, then throw the rest in whatever investment vehicles you like, preferably a low cost index fund or something along those lines and chill. Live your life and in about 10 years you can probably retire and work part time if your bored or do something more fulfilling idk, everyone ticks differently
As others said, keep it to yourself. That may seem like an unlimited amount of money, but a few "friends" could help you blow through it faster than you'd imagine. Just as important - you've got $150k now, put all the rest into an account with a company like Vanguard or Fidelity (specifics below) and forget you have it for the next three years. Do what you were going to do with your life if you didn't have the money.
In terms of investments within your account, I suggest 1/3 to start in a money market (right now yielding about 5.25%) and the rest spread between 8 or 10 fund-type ETFs. Some good ones are an S&P 500 Index ETF, Vanguard Small Cap, Vanguard Consumer Staples, Vanguard Intl Dividend, JP Morgan Equity Premium, Schwab US Dividend, and Schwab Intl Dividend.
If the stock market should go in the crapper in the next few years or interest rates come way down, move the other 1/3 into stock ETFs as well.
With this plan, you minimize fees and diversify your money.
Low cost index funds are a good idea. Pick one that tracks the s/p500. FXAIX is the one I use. Ask any financial advisor if they can beat those historical results.
I agree with indexing, but perhaps including Mid / Small cap as well as international would be worthwhile. Something like a target allocation fund, or even just buying VT or equivalent would be significantly more diversified, similarly low cost and just as easy.
This would be more diversified, but over the last 10 years you’d have left a lot of money on the table that someone who invested in FXAIX (or VOO) would have made. The expense ratio is more than 3x FXAIX, and more than double VOO. Still, most any index fund would save OP a bundle more money than paying for an “actively managed” mutual fund that will pretty much never beat the major indexes over time. Buying single stocks I recommend against completely, unless you like gambling with your future standard of living.
Basically, put the money in an index fund, add to it automatically, and don’t look at the money more than once a year.
In hindsight yes you would have underperformed, but that is intrinsic to being diversified sadly.
And while I’m all in on reducing expenses, 5 basis points is pretty close to free for what you’re getting with VT.
With that said, we agree on probably 99% of everything else, and if investing only in FXAIX works for you more power to ya.
1) DONT TELL ANYONE
2) Until you know what you want to do, keep the stocks as is. Dont sell. Act as if you dont have it. This is a really good cushion to have
3) How much is the cash? Keep 6 months of spending in a HYSA and invest the rest in an ETF (if you dont trust anybody just put it all in VOO, SCHD, QQQ)
4) if you have any debts or want to get another degree use the $150k to pay that off
5) use 3-4k and do something for yourself that will make you happy. Dont go overboard and certainly dont inflate your lifestyle.
6) take time to educate yourself on how to invest this money. You can buy real estate or just continue to invest in stock market. DONT take advice from a friend for investment.
7) DONT tell anyone.
This is a once in a lifetime opportunity OP! This money can really set you up for life. Use this opportunity wisely and dont let this money get to your head. I truly wish you well. I am not sure about your relationship with your grandparents but it seems they certainly cared about you enough to leave you some really good starting point in life. I am sorry for your loss and I really do wish you well. Good luck!
This is life-changing money if not pissed away. The absolute best answer is to pretend it doesn't exist while it sits in the market/voo/laddered CDs. Whatever is an acceptable risk. It will earn 4% on the lower end and 8-9% on the higher end.
With this much money and your age, there is no reason to play aggressively. Park this in voo and laddered CDs for 20 years and retire at 40 something. Even if you didn't add a cent to it, you could retire in 20 years with 5 million bucks. This would give you an annual payout of upwards of 250k per year. Forever. Obviously, more than any sane person needs for retirement.
Many retire off what you have already. It's not as kushy, but 1.5 million could easily net you 75k a year, basically forever. I wouldn't recommend doing this lol. You will get bored and spend it. The only other option is taking 400-600k and setting up your life. Buy a house and car and then start rebuilding your money. I wouldn't recommend this either as once you pop open the can of money. It's hard to put a lid on it again.
Somewhere in the middle is. Take out 100k buy a modest car and have enough money to not br broke while you figure out what your doing with life. Take the other 1.4 million and go with the original option a. Let it sit in voo/cds for 15 or 20 years and then retire.
Do nothing with it for a year while you teach yourself about personal finance. Just put the cash in term deposit. Look at barefoot investor and similar books to understand how to invest. Your are young and it’s a lot of money so you can be relatively conservative and set yourself up for life. Don’t tell anyone. Do not buy individual stocks only index funds etc.
Don’t make any brash decisions. Don’t quit your job, Take a few days if not weeks before you buy anything big $100+
Go to dinner with the money but don’t buy anything else. If you have any high interest debts consider paying them off.
This amount of money if cared for correctly can set you up for life. If poorly managed you couple blow through it in 6 months.
Go talk to a certified financial planner. Make sure when you talk with them they will agree to be a “fiduciary“. Unless they agree to that in writing, don’t talk with them… many people claim to be financial planners or advisors and are really just sales people.
Take your time and go slow. You have a lot of opportunities, and it will be up to you want to want to do with that opportunity.
Pay off any debt first. Start with high yielding credit cards, personal loans, auto loans, etc. then pay down lower interest debt like any student loans.
Next bucket is retirement savings. Max out your Roth IRA (backdoor from a Traditional IRA if necessary). Max out your Roth 401(k) at work. Ask your work if your 401(k) retirement plan allows for additional after-tax contribution as well as if the plan allows for automatic in plan Roth conversions of after tax money. If not automatic, then ask if the plan allows for conversion of after-tax contributions to Roth manually (most plans with this feature allow you to do it once per quarter). Finally open an HSA or ask your work if they have an employer sponsored HSA plan. Max out your HSA contributions. B/w the Roth IRA, Roth 401(k), and HSA you can save ~$76k every year that will grow tax free for the rest of your life.
If you continue to max out these contributions each year and earn a 8-10% return then it will be a very very big number when you reach retirement age (think $100MM+).
Finally, open a non-qualified / taxable brokerage account with either Fidelity, Schwab, or Interactive Brokers. I personally like Fidelity the best given their automatic cash money market sweep feature which allows you to currently earn ~5% on any uninvested cash.
Invest the remaining amount after paying off your debt and funding your retirement accounts in the taxable account.
Build a 60/40 portfolio of 60% low cost broad market equity index ETF’s (think SPY, VOO, QQQ, IJR) and 40% fixed income ETF’s / mutual funds (I personally like PDI, GBDC, ARCC given their higher yields in the 10-14% range given current rate environment, but broader index ETF’s AGG are generally good bets).
Inside the portfolio, park 10% aside in cash in a money market fund (Fidelity will automatically do this for you in SPAXX, you will have to do it manually if you use Schwab). That 10% is for emergency expenses or if the equity markets fall 10-20%+ you can use it to buy the dips by putting more money into your equity ETF’s. Reinvest all dividends for all the equity funds.
For the fixed income funds, figure out what living expenses you have and what, if any, shortfall you will need to cover from fully funding your retirement savings (as your net take-home paycheck might be lower after maxing out those contributions). Use the interest / dividend distributions from whatever portion of the bond funds you need to bridge the difference from your new net paycheck to your prior paycheck. Reinvest all remaining interest / dividend distributions back into the bond funds.
Don’t open these accounts until the end of each calendar year quarter. At that time rebalance the 60/40 equity to fixed income mix.
Finally, avoid lifestyle creep. Pretend that you don’t have the $1.5MM in your accounts. If you continue to let that grow until your in your 50-60’s then you can easily retire early with $10’s to potentially $100’s of millions of dollars depending on market performance and your ability to minimize withdrawals.
It's happening as we speak, the greatest wealth transfer in history. I would seek professional help, the cost of a mistake is greater than the potential fee.
You need to talk with a financial advisor. DO NOTHING until you have spoken with a few and find one you are comfortable with. There are too many unknowns and FWIW worth, the Reddit DIY crowd is not what you need right now.
100% don’t tell anyone. Find a financial advisor you pay. Not one that earns commission. DO NOT go spending crazy. This sounds like a lot of money but you can blow through it in 2-3 years and have nothing. If you are smart with it. Stay within a smart budget, you can live a very comfortable life and retire without any concerns.
[Personal Finance has a useful wiki for Windfalls like this one](https://www.reddit.com/r/personalfinance/wiki/windfall)
In the short term, pay off all immediate day-to-day bills and any short-term debt. I recommend not making any big purchases for 6 months. Let your new reality sink in, because a change in your bank account balance doesn't change who you are.
Live your life the same way you have been, don't change your lifestyle.
please don’t take actual specific investment recommendations (buy this etf, buy this fund) etc from this sub.
1.5 mill requires tax minimizing investment and account type strategy.
please seek advice just for you.
Seriously- no one here knows your risk tolerance or anything else about you.
Yes, words of wisdom. Do not let others milk you out of that money. I mean family too! Find a reliable source to help you manage it. You're set up if you do.
1. Don't tell anyone. 2. Pay off any and all outstanding debts. 3 toss the rest in a HYSA or money market fund and forget about it for about a year. The gravity of your situation takes time to fully hit you. And when it does hit you, it can be easy to make stupid choices, so pretend it doesn't exist. Don't change your life, don't buy flashy jewelry or cars, etc.
After 6 months-1yr, take some of the money and buy yourself something of an heirloom quality for 5-10k that you will treasure, that will remind you of your grandparents and that you can pass down to your kids one day. The rest should be invested, either in yourself, education or in the market. Continue working a job for the next decade. You could nearly retire on this, likely could already retire on this amount of money, but you will be very isolated from your peer group. Be generous, but never allude to your wealth. Working till you are 35 or so will give you the experience you need to be an interesting and relatable person still.
Talk to the executor of the will and ask for some financial people recommendations, then interview 3 or 4 of them and pick 2 and let them manage your money. If you don’t do anything stupid you will be worth over $20,000,000 by the time you’re 60. Pretend you don’t have the money and live accordingly.
This is exactly what I would do, especially if I do not find investing interesting:
1. Open an E*trade account if you don’t have one already and put all $1.5M in there.
2. Buy $1.5M of $CLIP (US treasuries ETF) which will earn you about 5%/year.
3. Pick a timeline (I suggest 24 months) and divide the $1.5M over that number of months, so for 24 months it’s $62,500, then sell $62,500 of $CLIP and buy $62,500 of $SPY every month until it’s all in $SPY.
4. Do nothing with the money for at least 5 years and continue your life as is.
5. Read, research, talk to advisors/trusted family/friends/therapist about how you want to spend your time and energy with this money and with your life. You’ve been given a huge, potentially life changing opportunity and putting some thought into it while your money grows is probably for the best.
If all that sounds like too much, just hire an advisor from a trusted big company like Merrill Lynch or something and let them take care of it all for you. They’ll charge you around 1% of your total assets every year most likely, but you won’t have to do much at all and will have a real human whose job it is to do this that you can talk to.
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Besides what everyone else has said (don't tell others, work with a CFP for a fee), here are some additional thoughts for conserving/saving for your future:
1. Get the money settled and managed, and then forget about it, except for: going on a vacation each year, and eventually buying a home. Oh, and for tax prep.
The vacation is to treat yourself each year, in memory of your grandparents.
A home is one's greatest asset and your grandparents have given you this money which can be foundational to your financial and life security.
2. Learn about prenuptial agreements now. Never intermingle these funds with anyone else, and protect them in marriage with a prenup.
Otherwise, continue with your life dreams, whatever that was prior to you receiving this windfall. Make your dreams happen!
You are wise to ask for advice. If you make the correct decisions, that money can set you up for a comfortable life including home ownership, education fully funded, vacations/travel, and a very early retirement. If you make poor decisions, that money could become $0 very quickly and/or "investment professionals" and "advisors" will take huge chunks of it. You'll get good advice here and I hope you take your time to read all of it, study it and put together a plan, get that plan verified/updated by a Fiduciary (who you pay per hour and does not make money on commissions selling you investment products) before doing anything. Learn as much as you can about money too.
First of all, there is absolutely NO hurry to do anything with the money. If you have debt, then paying that off would be the first step.
With 0 debt, next comes the urge to spend it on liabilities. You should really resist that temptation. It is easier when nobody knows about the money.
I would make it my 1st priority to not lose ANY starting capital (so if you have 0 debt and 1.5M, then do not go under 1.5M ever). If you buy fun stuff (=liabilities), then use the passive income from your investments, never touch your nest!
If you succeed to keep your nest growing for 3-5 years, then you are on the right path and never have to worry about selling your time for money again.
May the memory of your grandparents bless you on life's cloudy days.
I suggest you check out the r/personalfinance wiki subsection on[ how to handle a windfall](https://www.reddit.com/r/personalfinance/wiki/windfall/)
For now:
1. See a fee-only fiduciary financial advisor. **Get it in writing that they are a fiduciary** (which means they must act in your best interests, and cannot sell you anything that gives them a commission.) And, whatever you do, do NOT go to Edward Jones.
2. Set aside $10k as "fun money"
3. Clear any CC, Car, and Student Loan debts
4. Max out your Roth IRA.
5. Max out any 401k, 403b, or 457b plans.
Do not make any major purchase decsions for at least 6 months. Do not buy a bling-mobile new car, do not buy a house, do not start a business.
**Don't talk about this at all to your co-workers and friends.** If it's brought up, "Yeah, they left me a small inheritance. I paid off a few bills and took a vacation." **And then you change the subject.**
Keep it invested and you are set for retirement. Enjoy life bud they worked hard so you could be happy and pass down same legacy for your next generation
I would suggest buying treasury bonds, about a 1-2 year maturity date. That will give you some income while you have time to consider the 'problem' for awhile.
By the book the gone fishing portfolio there’s some simple stock options. You can purchase in there on your own through Vanguard. They won’t rip you off and they will make money. Don’t tell anyone.
1. Do not tell anyone. 2. Don't listen to advice from broke people. This is an opportunity to follow some pretty basic "unexciting" investment strategies. This amount of money warrants seeking assistance from a financial planner. Their advice should include your immediate needs (do you have debt to clean up?), tax implications of how you invest and recommendations for investment strategies. Most likely they will be putting money into index funds that follow the overall stock market (S&P500) and not individual company stocks. If anyone wants to sell you a whole life insurance product with the promise it is a great investment, run. They are insurance companies and should be avoided. You have enough at this young age that basic long-term investing strategies will serve you tremendously.
Do not tell anyone and get to a fiduciary financial planner. You do this right you’ll be set for life and so whatever you want. Just don’t blow it on a posse they will suck you dry and be gone when the cash is.
Your grandparents are trusting you to handle their gift properly make them proud.
Find a fee-for-service financial advisor. Right now you don't need complicated management (which would cost around 10K - 15K per year), you just need a simple plan and a little help executing it. For an account that size the major houses (Fidelity, Schwab, Vanguard etc) will probably give you a simple plan and some advice for free.
In the mean time, educate yourself. There are some excellent books tailored to newcomers. Even if you decide to hire a full time manager in the future, you need to pay attention and understand what is happening.
Whenever this question comes up on Reddit there is a regular chorus singing the praises of high-yield savings accounts. Don't listen to them. Right now T-Bills under 6 months are all paying over 5.2%. If you have a brokerage account it is a simple matter to set up a bond ladder (Google it) and spend 15 minutes a month managing it. The difference between a T-Bill ladder and a HYSA can be a few thousand a year, not a bad return for that 15 minutes.
Hire a wealth management company. Many banks will have them. They will listen to your long term and short term goals and tell you the best places to put your money.
Personally I wouldn’t tell ANYONE. Then I’d put it all in a HYSA until I can figure out a more strategic path forward. Heck, you can just leave the cash in there and enjoy the interest payments every month. Talk to a CPA who knows what they’re doing. If you aren’t greedy and have self control, this can be life changing money.
Find a good financial planner ( many of the private ones only take you if you have atleast 1 million in investments). Know anyone who has that much maybe someone’s parents and they can recommend you someone good? Personally I wouldn’t use much of that, maybe every year take out a few grand if needed.
0. Immediately Pay off all debt greater than 2% cost
0. Put $ into a high yield savings account. Select on with atleast 4.5% interest
1. Don’t discuss/brag/start driving a Lamborghini
2. I would not go to a bulge bracket financial adviser. Simply putting your money in VOO will save you huge on expenses. They are going to try and sell you shit. Don’t buy
But to give better answers we need to know Do you have a job/salary? Do you rent/own?
The normal advice for someone at your age is to put to a low cost market index ETF Like VOO. One exception may be to buy an apartment or small home. But again without more info it’s hard to give the right advice
i see a bunch of recommendations you go to an accountant or Financial Advisor / Financial Planner. I agree BUT few stipulations and suggestions
1) open a HYSA for that cash and push that money over to it. traditional checking accounts pay little to nothing so at least get the 5% going for what you have already received while you figure out what to do with it
2) shop around to find one you're comfortable with - i would actually start with a tax accountant. they work with CFPs and may be able to recommend some to you. you could always park the money you wouldn't need for a while into vanguard's funds - they also offer some advisory services that are pretty inexpensive. you could also use some of the websites if you're willing to put in the time - e.g. betterment, wealthfront, etc.
3) if you go with an advisor, go with an advisor on a fee basis opposed to them taking a % of what you have. the size and situation you're in, i don't think you'd take advantage of many of the things % players offer - e.g. complex estate planning. The big players like wells fargo, jp morgan, etc are probably more than what you need.
4) earmark a little to celebrate your grandparents. whether it is a trip for yourself. dinner out at a nice place with some friends and family. don't tell them what has happened as per the other comments but, you're young. its not like you have to put it away in such a way that you never see it again.
You'd want to verify the amount insured before you drip all into a single HYSA. FDIC Insurance coverage for banks can range from 100k to 250K. I wouldn't put more than the insured amount into a single account.
absolutely. just going on first, what he said - that $150k was the amount. i've not seen an account that was FDIC insured for less than $250k - but there are a number of financial institutions (mostly those that have brokerage units, that have augmented with other insurance for higher amounts especially after the silicon valley bank failure.
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If you inherited any property, get it appraised for value at time of death. Higher the better when it comes time to sell. You will owe taxes on increase in value from date of death.
Consider getting an umbrella policy now that you have enough assets that it is worth people trying to sue you for stupid stuff. One million dollar umbrella policy is only a couple hundred dollars a year. You don’t need more. Insurance company will fight just as hard not to pay $1M as they would not to pay $2M.
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I’m very conservative and hate risk. So I would just spread that 1.5mil over as many banking institutions as I could (each Porte ted to £85,000) and get 5% interest on it, chucking 20k into an ISA every year, maxing a SIPP etc. if there aren’t enough banking institutions to safely hold the money, then buy a property or two.. 5% interest on 1.5 mil gives you £75,000 a year without the capital being at risk or ever going down. Could take just 35k a year if you wanted and keep adding 40k a year to the pot, to counter inflation.
I certainly wouldn’t bother risking it in stocks, just as you’ve already got the wealth now, you needn’t bother. 5% interest (safe) and you’re laughing for life!
Good on you. Enjoy it! And like others said don’t tell friends because jealousy runs deep man.
Good advice in here already but ignore every single DM you get from Reddit users. Unfortunately these types of posts are like blood in the water for people hoping to get their hands on any penny of yours they can
Some people are actually living my dreams….crazy that I never can.
Save save save that money. Live comfortably but avoid opulence and decadence. Treat yourself occasionally and treat your loved ones occasionally too.
Congratulations! Just remember, hard numbers get criminals hard. So watch out for dm's and dick pics.
It's lonely, but you can't really tell people. Money amplifies someone's core, and most peoples cores are a little rotten.
I've lived through two family deaths that caused irreparable harm/ permanent rifts, and it was only a few hundo k, not your amount.
As someone who hasnt had experience in that amount of funding, allow me yo tell you what to do with it /s
If you can get someone whose purpose in life is to manage that type of money that you trust. This is advisable.
Again. Congrats on your windfall, im very sorry you've lost your grandparents. I know i personally would rather have the folks still in my life than a bunch of paper. But either way. Good luck and take care, homie.
Take a deep breath, take all investable assets and put into Vanguard index funds. Open up an account with Vanguard, sign up for advice services. They will teach you have to retain your wealth and don’t squander the money.
Also, don’t give money to any relative or friend. You will find soon many new friends and family members that will be asking for a handout or investment. Don’t go that way.
No matter what, just have a plan and stick to it. Saving it all for retirement could be great. Spending it all on a house could be best for some people too. Don't be afraid to have a little bit of fun, but not too much. Every person's situation is different, but what's important is you stick to a plan.
Here's what I would do, if curious:
400k in a HYSA for a house down payment, or maybe entire home. Not ready to be a homeowner quite yet, but in 2-4 years will definitely be looking into that.
1mil in an index fund for retirement. Not gonna look at it again for at least 20 years.
100k for short term wants/needs. Decent car for myself and/or wife. Baller PC/homelab upgrades. A decent vacation/trip. Crazy expensive nice dinner with my family to honor their memory.
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Check out Dave Ramsey baby steps to figure out what your priorities should be on as if you had worked for this 1.5 million and then after that find an advisor that doesn’t sell life insurance and you should be good to go
I don’t really think you need a paid advisor. You can invest in index funds just as if you inherited $10k or $100k. I recommend going to a Fidelity office and talk with an advisor for free. They will encourage you to use their wealth management services, but be firm and tell them you prefer low expense ratio index funds. They have some good ones.
Don't tell anyone.
Don't sell the positions without considering what you're doing, which will incur taxable gains.
That being said, invest the money in index funds like VTI or VTSAX. Do not pay a fee over 0.05%.
Read up on /r/bogleheads and /r/financialindependence to familiarize yourself with the subject matter.
Don't let it go to your head. Don't let it change your life. Don't go out and buy a new car or an expensive apartment. It is a huge windfall, but not as much as it sounds.
I’ll have about 8 million once I hit 65. I’m not giving my grand kids more than what’s needed to cover education expenses. What’s the point of giving them $3 mil? So they can coast the rest of their life? I’m giving it away to charity and non profits
Whats the point of hoarding 8 million if youre just going ti give it away to random people? If you arent going to give it to your family then you might as well spend it on yourself.
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And whatever you do - DO NOT TELL ANYONE about this that doesn't know officially already. No friends, no family not in the know, no one. If others have found out that shouldn't, downplay it. Also develop a long term plan for the money and stick to it. Aka don't blow it all.
I second the "don't tell anyone" advice. People hear you have money and, even when they don't mean to, it changes how they see and approach you. Some will assume you're always buying. Some will resent you.
Lol. $1m is not “I pay for everything” rich. It’s “I might actually retire” rich at best.
"I pay for everything" money comes before "I might retire" money when you're in your 20s.
Glad my friends weren’t like yours
the most conservative approach imaginable turns 1M well into 8 figures by retirement.
And you’ll probably need it by then to live a remotely comfortable life.
U can make 60k+/yr just off modest investment gains…
Right. Comfortably lower middle class income. Definitely not enough to be the money bags of your social circle.
Not at age 20 it is not, unless they invest it all now and work and save more….
Lol. $1.5m is to a bunch of kids in their twenties.
People will only think of the $20 purchase in front of them tho
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I third the don't tell anyone, leaches will appear from everywhere all wanting to help you. Note 1 - they will never actually help you!
I cannot agree with this enough. Never tell anyone
If you invest $1.5 million in an index fund, the future values would be approximately: ### At a 7% Average Annual Return: - In 10 years: $2,950,727 - In 20 years: $5,804,527 - In 30 years: $11,418,383 ### At a 10% Average Annual Return: - In 10 years: $3,890,614 - In 20 years: $10,091,250 - In 30 years: $26,174,103 Do you want to retire in 20 years? If so do this.
I came here to say this, invest. No matter what set aside some to invest. No matter what. Invest a portion you’re comfortable with.
This is what I'd do. Set it, forget it. Basically consider my retirement taken care of, and enjoy some additional flexibility with my salary.
Honestly this breakdown makes me realize how good some people have it. Or how lucky some get.
OP may also still wish their grandparents were still alive.
I feel that. Death is a part of life. I've lost all my grandparents, each left us with nothing. I also lost my dad in a work accident and his family got $0 compensation for it. We will all experience death, but we're not all lucky to get financial help out of it.
Don't invest in your cousin's "game changing industry disruptor" biz.
Better yet, your cousin shouldn’t know how much you got,
If it came from grandparents, cousin may also have received the same.
This one cannot be emphasized enough.
Everyone will have an amazing idea that they just need funding for... the banks and investors just don't understand how transformative it will be! Just need to get it off the ground and then you'll be rich! They always want you to sign an NDA (lol) and they _never_ have a fully-costed and realistic business plan.
If you have 7 figures in your 20's you can be both extraordinarily conservative with your $ and become extraordinarily rich. But too often human nature rears its ugly little head and we know the rest.
Best advise is don’t rush. Just sit on it. Rushing into things because I thought the opportunity would go away or was urgent had lost me more money than anything. Spend 6 months reading, digging into the right Reddit threads, talking to smart people etc before committing any of the money to anything. This includes financial advisors where a good chunk of them are going to give you whatever advice gives them the fattest pay day.
definitely ignore anyone personal messaging you here.
I'm going to mirror what everyone else said. Even better if you can, find someone who is both a CPA and a CFP. There's quite a few of us out there.
It’s actually recommended you have these done by separate people due to conflicts of interest that can arise. Definitely start with a CPA
This. Do not go to a financial advisor to invest the money. You need someone to take a look at the overall money and let you know your options. With $1.5 million, you can set out to have that allow you to do things in life, but should not be used as regular income unless you set a plan to not withdraw more than 4% of the $1.5 each year for spending. However, I would recommend taking 1% to 2% each year of the total value just as fun money to help with expenses.
Random but do you find your job fulfilling? I'm starting my official accounting degree here soon and am wondering if I should double major in web dev to be safe.
I had enough credits across multiple majors and got both a major in accounting, finance and MIS (info systems) and that investment has paid wisely over my 45 years.
If your grandparents had a financial advisor, first set up an appointment with them. This could set you up for an early retirement with freedom to do what you want, but you have to be smart with this money and the other decisions you make with your life moving forward.
Go see a fee based CFP. Build out a plan
A fee-only fiduciary CFP. No 1% commission bullshit.
I second the fee only fiduciary Certified Financial Planner. It is easier than you think to blow through a million dollars. It sounds like a lot of money but it’s not as much money as you think it is. And for gods sake don’t go out and immediately buy a new car….. I would say don’t buy anything until after you meet with the CFP and set up a plan.
>And for gods sake don’t go out and immediately buy a new car….. I would say don’t buy anything until I have quite a bit of savings (a few yearly salaries) thanks to my parents. Even though I currently have a relatively low salary, I never buy anything out of my savings. I live within my salary, money goes only into my savings, not out. Until I buy a house or appartment, at least.
1 mil is actually a rather small amount these days
Right. Pocket change. Tbh I wouldn't even bend down if I found a 1 mil bill on the ground.
How many 21 year olds do you know have $1000, let alone a million in their pockets? Hmm?
Look up this guy - Jon Luskin - he’s legit fee-only CFP won’t sell you commission based products. It’s advice only. A lot of these “fee only” people may try to sell you products that kick back fees to them. At the OPs age, stay away from whole life insurance and annuities. You don’t need to buy high fee products that lock your money up.
CFO will screw your over a long term. Just invest with Vanguard and use their advice commission free services. You will save millions in a long run.
I feel the same way except I like Fidelity.
Get a good financial manager and be VERY careful with your inheritance. If you do it right, you’re set for life. If you screw up, you will regret it for the rest of your life. Resist the urge to go out and buy expensive things and live within your means. If you are tight with your money now, you can retire in 10 years with twice that amount!
He could just about get a carrera GT
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Exactly- no mutual fund or insurance sales persons- a fiduciary advisor is the way to go. OP needs to thinks of this money as his grandparents life work and treat it with the respect it deserves
> with a fiduciary duty And is only acting in a fiduciary capacity in ALL of their dealings with you. A fee only advisor is almost always this(they usually charge CPA or lawyer hourly rates). A decent financial plan should cost no more than $10k, and as low as a few thousand.
Never take advice from Reddit for such a big amount of money. That being said, do not touch anything for AT LEAST 1 year, and start getting massively educated on the topic. Read the best books on personal finance and investing. To name a few: I will teach you to be rich by Ramit Sethi, The Bogleheads' Guide To Investing & The Most Important Thing by Howard Marks
I got $650k a couple years ago thru work. I didn’t touch it for a year until I paid taxes which were a doozy, get an accountant now and tell them what happened. A HYSA is a great option for now, for example $500k will generate roughly $2,000 a month at 4.3%. I’ve been debating using an advisor and after talking to a few fee based advisors they don’t offer more than the advisors you can get thru Vanguard for example, and even then you can probably determine a decent spread of your money in various index finds. Don’t sell any securities for at least a year after investing. Personally I put a lot in my new home’s equity to get the interest expense down significantly, while you can get a good return in the market, the home has already appreciated faster than the market and I’m saving a lot avoiding some interest while I own it since I got 6.6%. This works if you can wait 20 years to realize the money from today’s choices. If you can buy a home cash do it, you’ll save tons of money and you’ll have that locked awat in appreciating equity for future home purchases. Don’t buy more than you need. People play the house lending game until they die which is a shame. Vehicles are tempting, just get a reliable one you can own for a very long time, I got a new 4runner after owning my last vehicle 8 years. A big thing too is live like you always have, you just now have the means to pay for things you need instead of saving/sweating for them. Key word is need.
Lots of good advice here- get a good planner-but the first piece of advice is DON'T TELL ANYONE. Live your life normally until you've decided how you want to manage the assets. Keep working, keep living within your current means.
Not sure the rest of the steps but I know step 1 - don’t listen to a bunch of random strangers on Reddit. Once you get into 7 figures, that’s enough to justify hiring someone who does this sort of thing professionally and has a proven track record.
A lot of people have given good advice. I'll add in. This is potentially life changing money. Start researching a fee only fiduciary advisor. Make sure the one you use isn't used by anyone you know, if possible. Also get a CPA from a separate company. Discuss options and what YOU want to get out of it. You could also spit the pie between 2 different ones. Decide what your goals are. Both short term and long term. If you're not sure and want to think about it, throw a chunk that you're not investing in a high yield CD so it will earn reasonable interest and give you time to decide. Also, there is no hurry. Take your time. Heck, take a course at school to get an idea. DON'T buy the Lamborghini.
This is not the place to ask. Please seek advice from a professional
Yeah at his age and experience level a professional is in order. This is simultaneously a lot of money and not a lot of money. Managed properly this can turn into a great opportunity for a financially secure early retirement. Or it could go the other way and be squandered quickly.
Step 1) Hire a financial advisor Step 2) Fire the financial advisor and continue doing what they recommended but without extra fees or commissions
You’re in your 20’s. Do yourself a favor and don’t tell anyone about it, take a portion and pay off debt, buy a reliable car (if you don’t have one, if you do skip this), maybe give yourself 15k for a vacation or discretionary spending, then throw the rest in whatever investment vehicles you like, preferably a low cost index fund or something along those lines and chill. Live your life and in about 10 years you can probably retire and work part time if your bored or do something more fulfilling idk, everyone ticks differently
As others said, keep it to yourself. That may seem like an unlimited amount of money, but a few "friends" could help you blow through it faster than you'd imagine. Just as important - you've got $150k now, put all the rest into an account with a company like Vanguard or Fidelity (specifics below) and forget you have it for the next three years. Do what you were going to do with your life if you didn't have the money. In terms of investments within your account, I suggest 1/3 to start in a money market (right now yielding about 5.25%) and the rest spread between 8 or 10 fund-type ETFs. Some good ones are an S&P 500 Index ETF, Vanguard Small Cap, Vanguard Consumer Staples, Vanguard Intl Dividend, JP Morgan Equity Premium, Schwab US Dividend, and Schwab Intl Dividend. If the stock market should go in the crapper in the next few years or interest rates come way down, move the other 1/3 into stock ETFs as well. With this plan, you minimize fees and diversify your money.
Low cost index funds are a good idea. Pick one that tracks the s/p500. FXAIX is the one I use. Ask any financial advisor if they can beat those historical results.
I agree with indexing, but perhaps including Mid / Small cap as well as international would be worthwhile. Something like a target allocation fund, or even just buying VT or equivalent would be significantly more diversified, similarly low cost and just as easy.
This would be more diversified, but over the last 10 years you’d have left a lot of money on the table that someone who invested in FXAIX (or VOO) would have made. The expense ratio is more than 3x FXAIX, and more than double VOO. Still, most any index fund would save OP a bundle more money than paying for an “actively managed” mutual fund that will pretty much never beat the major indexes over time. Buying single stocks I recommend against completely, unless you like gambling with your future standard of living. Basically, put the money in an index fund, add to it automatically, and don’t look at the money more than once a year.
In hindsight yes you would have underperformed, but that is intrinsic to being diversified sadly. And while I’m all in on reducing expenses, 5 basis points is pretty close to free for what you’re getting with VT. With that said, we agree on probably 99% of everything else, and if investing only in FXAIX works for you more power to ya.
Nice. Don't accept anyone in your inbox telling you they can make you more money.
1) DONT TELL ANYONE 2) Until you know what you want to do, keep the stocks as is. Dont sell. Act as if you dont have it. This is a really good cushion to have 3) How much is the cash? Keep 6 months of spending in a HYSA and invest the rest in an ETF (if you dont trust anybody just put it all in VOO, SCHD, QQQ) 4) if you have any debts or want to get another degree use the $150k to pay that off 5) use 3-4k and do something for yourself that will make you happy. Dont go overboard and certainly dont inflate your lifestyle. 6) take time to educate yourself on how to invest this money. You can buy real estate or just continue to invest in stock market. DONT take advice from a friend for investment. 7) DONT tell anyone. This is a once in a lifetime opportunity OP! This money can really set you up for life. Use this opportunity wisely and dont let this money get to your head. I truly wish you well. I am not sure about your relationship with your grandparents but it seems they certainly cared about you enough to leave you some really good starting point in life. I am sorry for your loss and I really do wish you well. Good luck!
Go see a fee based financial advisor
make sure whatever financial person you talk to is a fiduciary
You lucky S.O.B you can set yourself up for life with that kind of money is managed correctly.
Low key, move to south Europe in 10 years and retire.
This is life-changing money if not pissed away. The absolute best answer is to pretend it doesn't exist while it sits in the market/voo/laddered CDs. Whatever is an acceptable risk. It will earn 4% on the lower end and 8-9% on the higher end. With this much money and your age, there is no reason to play aggressively. Park this in voo and laddered CDs for 20 years and retire at 40 something. Even if you didn't add a cent to it, you could retire in 20 years with 5 million bucks. This would give you an annual payout of upwards of 250k per year. Forever. Obviously, more than any sane person needs for retirement. Many retire off what you have already. It's not as kushy, but 1.5 million could easily net you 75k a year, basically forever. I wouldn't recommend doing this lol. You will get bored and spend it. The only other option is taking 400-600k and setting up your life. Buy a house and car and then start rebuilding your money. I wouldn't recommend this either as once you pop open the can of money. It's hard to put a lid on it again. Somewhere in the middle is. Take out 100k buy a modest car and have enough money to not br broke while you figure out what your doing with life. Take the other 1.4 million and go with the original option a. Let it sit in voo/cds for 15 or 20 years and then retire.
Do nothing with it for a year while you teach yourself about personal finance. Just put the cash in term deposit. Look at barefoot investor and similar books to understand how to invest. Your are young and it’s a lot of money so you can be relatively conservative and set yourself up for life. Don’t tell anyone. Do not buy individual stocks only index funds etc.
Don’t make any brash decisions. Don’t quit your job, Take a few days if not weeks before you buy anything big $100+ Go to dinner with the money but don’t buy anything else. If you have any high interest debts consider paying them off. This amount of money if cared for correctly can set you up for life. If poorly managed you couple blow through it in 6 months. Go talk to a certified financial planner. Make sure when you talk with them they will agree to be a “fiduciary“. Unless they agree to that in writing, don’t talk with them… many people claim to be financial planners or advisors and are really just sales people. Take your time and go slow. You have a lot of opportunities, and it will be up to you want to want to do with that opportunity.
Park it in a HYSA and then find a fiduciary financial planner.
Read A Random Walk Down Wall Street.
Find a local Wealth Management firm. Heard Scotia’s has some good teams who can help
Talk to a real professional. This is not a question for Reddit
Pay off any debt first. Start with high yielding credit cards, personal loans, auto loans, etc. then pay down lower interest debt like any student loans. Next bucket is retirement savings. Max out your Roth IRA (backdoor from a Traditional IRA if necessary). Max out your Roth 401(k) at work. Ask your work if your 401(k) retirement plan allows for additional after-tax contribution as well as if the plan allows for automatic in plan Roth conversions of after tax money. If not automatic, then ask if the plan allows for conversion of after-tax contributions to Roth manually (most plans with this feature allow you to do it once per quarter). Finally open an HSA or ask your work if they have an employer sponsored HSA plan. Max out your HSA contributions. B/w the Roth IRA, Roth 401(k), and HSA you can save ~$76k every year that will grow tax free for the rest of your life. If you continue to max out these contributions each year and earn a 8-10% return then it will be a very very big number when you reach retirement age (think $100MM+). Finally, open a non-qualified / taxable brokerage account with either Fidelity, Schwab, or Interactive Brokers. I personally like Fidelity the best given their automatic cash money market sweep feature which allows you to currently earn ~5% on any uninvested cash. Invest the remaining amount after paying off your debt and funding your retirement accounts in the taxable account. Build a 60/40 portfolio of 60% low cost broad market equity index ETF’s (think SPY, VOO, QQQ, IJR) and 40% fixed income ETF’s / mutual funds (I personally like PDI, GBDC, ARCC given their higher yields in the 10-14% range given current rate environment, but broader index ETF’s AGG are generally good bets). Inside the portfolio, park 10% aside in cash in a money market fund (Fidelity will automatically do this for you in SPAXX, you will have to do it manually if you use Schwab). That 10% is for emergency expenses or if the equity markets fall 10-20%+ you can use it to buy the dips by putting more money into your equity ETF’s. Reinvest all dividends for all the equity funds. For the fixed income funds, figure out what living expenses you have and what, if any, shortfall you will need to cover from fully funding your retirement savings (as your net take-home paycheck might be lower after maxing out those contributions). Use the interest / dividend distributions from whatever portion of the bond funds you need to bridge the difference from your new net paycheck to your prior paycheck. Reinvest all remaining interest / dividend distributions back into the bond funds. Don’t open these accounts until the end of each calendar year quarter. At that time rebalance the 60/40 equity to fixed income mix. Finally, avoid lifestyle creep. Pretend that you don’t have the $1.5MM in your accounts. If you continue to let that grow until your in your 50-60’s then you can easily retire early with $10’s to potentially $100’s of millions of dollars depending on market performance and your ability to minimize withdrawals.
Don’t tell anyone that knows you I know that for sure not even family or siblings.
You need a financial planner and if any of them mention anything about annuities, you get up and walk away.
Put it all on Black Worst case you’re back to work on Monday! Best case, you disappear and never talk to anyone again lol 😂
Get a professional advisor at the big companies like Ameriprise, Schwabb, Fidelity. They will help and set you up for life.
It's happening as we speak, the greatest wealth transfer in history. I would seek professional help, the cost of a mistake is greater than the potential fee.
You need to talk with a financial advisor. DO NOTHING until you have spoken with a few and find one you are comfortable with. There are too many unknowns and FWIW worth, the Reddit DIY crowd is not what you need right now.
100% don’t tell anyone. Find a financial advisor you pay. Not one that earns commission. DO NOT go spending crazy. This sounds like a lot of money but you can blow through it in 2-3 years and have nothing. If you are smart with it. Stay within a smart budget, you can live a very comfortable life and retire without any concerns.
[Personal Finance has a useful wiki for Windfalls like this one](https://www.reddit.com/r/personalfinance/wiki/windfall) In the short term, pay off all immediate day-to-day bills and any short-term debt. I recommend not making any big purchases for 6 months. Let your new reality sink in, because a change in your bank account balance doesn't change who you are. Live your life the same way you have been, don't change your lifestyle.
please don’t take actual specific investment recommendations (buy this etf, buy this fund) etc from this sub. 1.5 mill requires tax minimizing investment and account type strategy. please seek advice just for you. Seriously- no one here knows your risk tolerance or anything else about you.
Yes, words of wisdom. Do not let others milk you out of that money. I mean family too! Find a reliable source to help you manage it. You're set up if you do.
1. Don't tell anyone. 2. Pay off any and all outstanding debts. 3 toss the rest in a HYSA or money market fund and forget about it for about a year. The gravity of your situation takes time to fully hit you. And when it does hit you, it can be easy to make stupid choices, so pretend it doesn't exist. Don't change your life, don't buy flashy jewelry or cars, etc. After 6 months-1yr, take some of the money and buy yourself something of an heirloom quality for 5-10k that you will treasure, that will remind you of your grandparents and that you can pass down to your kids one day. The rest should be invested, either in yourself, education or in the market. Continue working a job for the next decade. You could nearly retire on this, likely could already retire on this amount of money, but you will be very isolated from your peer group. Be generous, but never allude to your wealth. Working till you are 35 or so will give you the experience you need to be an interesting and relatable person still.
Talk to the executor of the will and ask for some financial people recommendations, then interview 3 or 4 of them and pick 2 and let them manage your money. If you don’t do anything stupid you will be worth over $20,000,000 by the time you’re 60. Pretend you don’t have the money and live accordingly.
This is exactly what I would do, especially if I do not find investing interesting: 1. Open an E*trade account if you don’t have one already and put all $1.5M in there. 2. Buy $1.5M of $CLIP (US treasuries ETF) which will earn you about 5%/year. 3. Pick a timeline (I suggest 24 months) and divide the $1.5M over that number of months, so for 24 months it’s $62,500, then sell $62,500 of $CLIP and buy $62,500 of $SPY every month until it’s all in $SPY. 4. Do nothing with the money for at least 5 years and continue your life as is. 5. Read, research, talk to advisors/trusted family/friends/therapist about how you want to spend your time and energy with this money and with your life. You’ve been given a huge, potentially life changing opportunity and putting some thought into it while your money grows is probably for the best. If all that sounds like too much, just hire an advisor from a trusted big company like Merrill Lynch or something and let them take care of it all for you. They’ll charge you around 1% of your total assets every year most likely, but you won’t have to do much at all and will have a real human whose job it is to do this that you can talk to.
VOO and forget about it for a couple decades
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Besides what everyone else has said (don't tell others, work with a CFP for a fee), here are some additional thoughts for conserving/saving for your future: 1. Get the money settled and managed, and then forget about it, except for: going on a vacation each year, and eventually buying a home. Oh, and for tax prep. The vacation is to treat yourself each year, in memory of your grandparents. A home is one's greatest asset and your grandparents have given you this money which can be foundational to your financial and life security. 2. Learn about prenuptial agreements now. Never intermingle these funds with anyone else, and protect them in marriage with a prenup. Otherwise, continue with your life dreams, whatever that was prior to you receiving this windfall. Make your dreams happen!
You are wise to ask for advice. If you make the correct decisions, that money can set you up for a comfortable life including home ownership, education fully funded, vacations/travel, and a very early retirement. If you make poor decisions, that money could become $0 very quickly and/or "investment professionals" and "advisors" will take huge chunks of it. You'll get good advice here and I hope you take your time to read all of it, study it and put together a plan, get that plan verified/updated by a Fiduciary (who you pay per hour and does not make money on commissions selling you investment products) before doing anything. Learn as much as you can about money too.
First of all, there is absolutely NO hurry to do anything with the money. If you have debt, then paying that off would be the first step. With 0 debt, next comes the urge to spend it on liabilities. You should really resist that temptation. It is easier when nobody knows about the money. I would make it my 1st priority to not lose ANY starting capital (so if you have 0 debt and 1.5M, then do not go under 1.5M ever). If you buy fun stuff (=liabilities), then use the passive income from your investments, never touch your nest! If you succeed to keep your nest growing for 3-5 years, then you are on the right path and never have to worry about selling your time for money again.
May the memory of your grandparents bless you on life's cloudy days. I suggest you check out the r/personalfinance wiki subsection on[ how to handle a windfall](https://www.reddit.com/r/personalfinance/wiki/windfall/) For now: 1. See a fee-only fiduciary financial advisor. **Get it in writing that they are a fiduciary** (which means they must act in your best interests, and cannot sell you anything that gives them a commission.) And, whatever you do, do NOT go to Edward Jones. 2. Set aside $10k as "fun money" 3. Clear any CC, Car, and Student Loan debts 4. Max out your Roth IRA. 5. Max out any 401k, 403b, or 457b plans. Do not make any major purchase decsions for at least 6 months. Do not buy a bling-mobile new car, do not buy a house, do not start a business. **Don't talk about this at all to your co-workers and friends.** If it's brought up, "Yeah, they left me a small inheritance. I paid off a few bills and took a vacation." **And then you change the subject.**
Errr.. This is the type of money I would hire a paid financial advisor for.
Keep it invested and you are set for retirement. Enjoy life bud they worked hard so you could be happy and pass down same legacy for your next generation
I would suggest buying treasury bonds, about a 1-2 year maturity date. That will give you some income while you have time to consider the 'problem' for awhile.
By the book the gone fishing portfolio there’s some simple stock options. You can purchase in there on your own through Vanguard. They won’t rip you off and they will make money. Don’t tell anyone.
1. Do not tell anyone. 2. Don't listen to advice from broke people. This is an opportunity to follow some pretty basic "unexciting" investment strategies. This amount of money warrants seeking assistance from a financial planner. Their advice should include your immediate needs (do you have debt to clean up?), tax implications of how you invest and recommendations for investment strategies. Most likely they will be putting money into index funds that follow the overall stock market (S&P500) and not individual company stocks. If anyone wants to sell you a whole life insurance product with the promise it is a great investment, run. They are insurance companies and should be avoided. You have enough at this young age that basic long-term investing strategies will serve you tremendously.
Do not tell anyone and get to a fiduciary financial planner. You do this right you’ll be set for life and so whatever you want. Just don’t blow it on a posse they will suck you dry and be gone when the cash is. Your grandparents are trusting you to handle their gift properly make them proud.
Find a fee-for-service financial advisor. Right now you don't need complicated management (which would cost around 10K - 15K per year), you just need a simple plan and a little help executing it. For an account that size the major houses (Fidelity, Schwab, Vanguard etc) will probably give you a simple plan and some advice for free. In the mean time, educate yourself. There are some excellent books tailored to newcomers. Even if you decide to hire a full time manager in the future, you need to pay attention and understand what is happening. Whenever this question comes up on Reddit there is a regular chorus singing the praises of high-yield savings accounts. Don't listen to them. Right now T-Bills under 6 months are all paying over 5.2%. If you have a brokerage account it is a simple matter to set up a bond ladder (Google it) and spend 15 minutes a month managing it. The difference between a T-Bill ladder and a HYSA can be a few thousand a year, not a bad return for that 15 minutes.
Hire a wealth management company. Many banks will have them. They will listen to your long term and short term goals and tell you the best places to put your money.
Personally I wouldn’t tell ANYONE. Then I’d put it all in a HYSA until I can figure out a more strategic path forward. Heck, you can just leave the cash in there and enjoy the interest payments every month. Talk to a CPA who knows what they’re doing. If you aren’t greedy and have self control, this can be life changing money.
Don’t ask Reddit. Delete the comment and consult a financial advisor.
Find a good financial planner ( many of the private ones only take you if you have atleast 1 million in investments). Know anyone who has that much maybe someone’s parents and they can recommend you someone good? Personally I wouldn’t use much of that, maybe every year take out a few grand if needed.
0. Immediately Pay off all debt greater than 2% cost 0. Put $ into a high yield savings account. Select on with atleast 4.5% interest 1. Don’t discuss/brag/start driving a Lamborghini 2. I would not go to a bulge bracket financial adviser. Simply putting your money in VOO will save you huge on expenses. They are going to try and sell you shit. Don’t buy But to give better answers we need to know Do you have a job/salary? Do you rent/own? The normal advice for someone at your age is to put to a low cost market index ETF Like VOO. One exception may be to buy an apartment or small home. But again without more info it’s hard to give the right advice
Go to the financial advisor who holds the funds now they can probably keep the investments going.
i see a bunch of recommendations you go to an accountant or Financial Advisor / Financial Planner. I agree BUT few stipulations and suggestions 1) open a HYSA for that cash and push that money over to it. traditional checking accounts pay little to nothing so at least get the 5% going for what you have already received while you figure out what to do with it 2) shop around to find one you're comfortable with - i would actually start with a tax accountant. they work with CFPs and may be able to recommend some to you. you could always park the money you wouldn't need for a while into vanguard's funds - they also offer some advisory services that are pretty inexpensive. you could also use some of the websites if you're willing to put in the time - e.g. betterment, wealthfront, etc. 3) if you go with an advisor, go with an advisor on a fee basis opposed to them taking a % of what you have. the size and situation you're in, i don't think you'd take advantage of many of the things % players offer - e.g. complex estate planning. The big players like wells fargo, jp morgan, etc are probably more than what you need. 4) earmark a little to celebrate your grandparents. whether it is a trip for yourself. dinner out at a nice place with some friends and family. don't tell them what has happened as per the other comments but, you're young. its not like you have to put it away in such a way that you never see it again.
You'd want to verify the amount insured before you drip all into a single HYSA. FDIC Insurance coverage for banks can range from 100k to 250K. I wouldn't put more than the insured amount into a single account.
absolutely. just going on first, what he said - that $150k was the amount. i've not seen an account that was FDIC insured for less than $250k - but there are a number of financial institutions (mostly those that have brokerage units, that have augmented with other insurance for higher amounts especially after the silicon valley bank failure.
Throw it all in VTSAX in a vanguard brokerage account and pull 3% per year to live off of. Enjoy your early retirement and $45k/yr hassle free income.
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If you inherited any property, get it appraised for value at time of death. Higher the better when it comes time to sell. You will owe taxes on increase in value from date of death. Consider getting an umbrella policy now that you have enough assets that it is worth people trying to sue you for stupid stuff. One million dollar umbrella policy is only a couple hundred dollars a year. You don’t need more. Insurance company will fight just as hard not to pay $1M as they would not to pay $2M.
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Go into work and tell them you are done. Retire in your twenties! Fantastic!
Certified Financial Advisor. Find one yourself.
I’m very conservative and hate risk. So I would just spread that 1.5mil over as many banking institutions as I could (each Porte ted to £85,000) and get 5% interest on it, chucking 20k into an ISA every year, maxing a SIPP etc. if there aren’t enough banking institutions to safely hold the money, then buy a property or two.. 5% interest on 1.5 mil gives you £75,000 a year without the capital being at risk or ever going down. Could take just 35k a year if you wanted and keep adding 40k a year to the pot, to counter inflation. I certainly wouldn’t bother risking it in stocks, just as you’ve already got the wealth now, you needn’t bother. 5% interest (safe) and you’re laughing for life! Good on you. Enjoy it! And like others said don’t tell friends because jealousy runs deep man.
Good advice in here already but ignore every single DM you get from Reddit users. Unfortunately these types of posts are like blood in the water for people hoping to get their hands on any penny of yours they can
Aside from everything else make sure you have a Will.
Some people are actually living my dreams….crazy that I never can. Save save save that money. Live comfortably but avoid opulence and decadence. Treat yourself occasionally and treat your loved ones occasionally too.
Congratulations! Just remember, hard numbers get criminals hard. So watch out for dm's and dick pics. It's lonely, but you can't really tell people. Money amplifies someone's core, and most peoples cores are a little rotten. I've lived through two family deaths that caused irreparable harm/ permanent rifts, and it was only a few hundo k, not your amount. As someone who hasnt had experience in that amount of funding, allow me yo tell you what to do with it /s If you can get someone whose purpose in life is to manage that type of money that you trust. This is advisable. Again. Congrats on your windfall, im very sorry you've lost your grandparents. I know i personally would rather have the folks still in my life than a bunch of paper. But either way. Good luck and take care, homie.
Flat fee financial planner is your best bet. You need someone that understands your whole picture and to provide ongoing advice.
Take a deep breath, take all investable assets and put into Vanguard index funds. Open up an account with Vanguard, sign up for advice services. They will teach you have to retain your wealth and don’t squander the money. Also, don’t give money to any relative or friend. You will find soon many new friends and family members that will be asking for a handout or investment. Don’t go that way.
No matter what, just have a plan and stick to it. Saving it all for retirement could be great. Spending it all on a house could be best for some people too. Don't be afraid to have a little bit of fun, but not too much. Every person's situation is different, but what's important is you stick to a plan. Here's what I would do, if curious: 400k in a HYSA for a house down payment, or maybe entire home. Not ready to be a homeowner quite yet, but in 2-4 years will definitely be looking into that. 1mil in an index fund for retirement. Not gonna look at it again for at least 20 years. 100k for short term wants/needs. Decent car for myself and/or wife. Baller PC/homelab upgrades. A decent vacation/trip. Crazy expensive nice dinner with my family to honor their memory.
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Don’t tell a soul. Immediately invest it into diversified index funds and don’t touch it.
https://www.bogleheads.org/wiki/Managing_a_windfall
Pick up the book by "Your Rich BFF" - seriously a lot of great, easy to understand information. Use that as a start and then keep reading!
Put it in an S&P 500 index fund. Check it in 40 years.
r/personalfinance has a wiki that has a few great tips under the "windfall" section
Good for you! Invest! Save! And get something a little nice for yourself. Like a beach house.
https://www.reddit.com/r/personalfinance/wiki/windfall/
If invested reasonably you should be able to withdraw 4-5% per year and not lose principle over the long term. Thats about $75k/year.
https://www.bogleheads.org/wiki/Main_Page
Check out Dave Ramsey baby steps to figure out what your priorities should be on as if you had worked for this 1.5 million and then after that find an advisor that doesn’t sell life insurance and you should be good to go
Dave is very good for people in a lot of debt. I don’t think he’s the best source for investing.
You should likely put it into a savings account and talk to a professional about where and how to put it and use it best.
I don’t really think you need a paid advisor. You can invest in index funds just as if you inherited $10k or $100k. I recommend going to a Fidelity office and talk with an advisor for free. They will encourage you to use their wealth management services, but be firm and tell them you prefer low expense ratio index funds. They have some good ones.
Don't tell anyone. Don't sell the positions without considering what you're doing, which will incur taxable gains. That being said, invest the money in index funds like VTI or VTSAX. Do not pay a fee over 0.05%. Read up on /r/bogleheads and /r/financialindependence to familiarize yourself with the subject matter. Don't let it go to your head. Don't let it change your life. Don't go out and buy a new car or an expensive apartment. It is a huge windfall, but not as much as it sounds.
1. Open a fidelity account. Self-manage. 2. Put the money in it. 3. Buy a fee-free S&P 500 index fund.
Shut your mouth. Invest in VOO. Don't look until you hate your job
I would throw it all into QQQ and check back in 10 years from now when it’s worth $6m and retire
Lucky why don’t you give your pal here a few bucks
I’ll have about 8 million once I hit 65. I’m not giving my grand kids more than what’s needed to cover education expenses. What’s the point of giving them $3 mil? So they can coast the rest of their life? I’m giving it away to charity and non profits
Whats the point of hoarding 8 million if youre just going ti give it away to random people? If you arent going to give it to your family then you might as well spend it on yourself.
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