How should I manage my small fortune of privilege?
July 28, 2011 8:28 AM Subscribe
I have the random fortune of being raised in a wealthy family. As I prepare for life after university I want to make sure I understand personal finance and properly manage the money that I've thus far received from parents and grandparents. Can you please help me? Snowflake details inside.
posted by anonymous to Work & Money (18 answers total) 13 users marked this as a favorite
I am a 21 year old student preparing for my final year of college and my departure into life after formal education. As the question mentions, I have the random fortune of a wealthy family. Consequently, I have a fair amount of money in my account that I am looking to properly manage / allocate. Even to me I sound like a spoiled brat, but while spoiled, I'm not a brat, just a result of circumstance.
Specifically, my personal finances to my knowledge are as follows:
$50k in a savings account
$15k in a checking account
$15k in an online stock broker that I personally manage
$20k in stocks chosen by my father, managed by myself and a money manager
$30k in mutual funds chosen by my father, managed by myself and the same money manager.
-Mostly domestic and I'm in the process in looking for funds in international and emerging markets, do you have any recommendations? I'm currently thinking Vanguard. How about funds in renewable energies - wind and solar?
Perhaps more importantly, no debt from credit cards or education.
This totals to $130 thousand, quite a fair amount...I'm quite lucky, and I understand that. But moving forward, how might you suggest I manage this money? Would you recommend I invest a greater amount of my savings in mutual funds? Simply leave it as is? Invest a greater amount in stocks? Invest a smaller amount in stocks? I understand that investing in stocks is generally a losing game compared to mutual or index funds but I think it to be a worthwhile endeavor for learning the market and such. Do you agree?
I realize that what you say is to be taken with a grain of salt for you don't know the market nor does anyone else, but I just feel a bit lost and could use some input. I know I also have the resource of the money manager but I would like some additional opinions. I also know to max out 401(k) contributions, but I don't yet have an employer, so that's not an option. I've done fairly thorough browsing and know not to maintain credit debt, buy things out of my budget, etc., so basic personal finance measures such as those don't really need to be discussed, I'm more looking for personal advice.
I also ask this question because I'm that privileged kid that says I don't want to pursuit making great amounts of money in life because money doesn't = happiness, though only because I had the luxury of not having to worry about money growing up. I plan to do what makes me happy which will likely be something that doesn't entail a great amount of money, and as a result, I want to see that this small fortune I've been graced with is properly managed into the future.
So perhaps I have everything under control, perhaps you think something should be tweaked a little, perhaps you think I'm well articulated and happy for my good grace, or perhaps you think I'm a spoiled brat - please let me know what your thoughts are.
You can email me at email@example.com