How to invest a $75,000 inheritance
August 8, 2011 1:09 PM Subscribe
I am about to inherit a significant, but not enormous, amount of money. How do I manage this process without making myself insane or losing it all? Help me set up a basic investment plan.
posted by fancypants to Work & Money (19 answers total) 5 users marked this as a favorite
These questions get asked a lot on AskMe, but here are my special snowflake details:
I am about to receive a mid-to-high five figure check (exact number TBD, but let's call it $75,000) following the sale of a property that I inherited a share of after my father's and grandfather's deaths in 2003. I am totally and completely clueless about money and a little bit freaked out about this.
I am a renter in a very pricey east coast city and I earn about $50,000 a year. I'm single and in my late 20s and I don't intend to stay in this city longer than the next couple years. I have no debt of any kind and a five year old car that's paid off and in good condition.
My current savings are around $12,000 in a TSP account (the federal government version of a 401k) invested in a lifecycle fund, $3,000 invested in index funds in an etrade account and a couple grand in a "high interest" savings account for emergencies. I have maxed out the matching contribution to my TSP and I feel like I am in decent, but not spectacular, financial shape.
My question is what the heck do I do with all this money? I know literally nothing about investing. Should I pay to talk to a financial planner? A tax accountant? Bonus points if you have recommendations for good people in the DC metro area.
Start me at the very simple basics. I don't even know whether I will owe taxes on this money.
I'd like to peel off a few thousand dollars from this windfall for fun (new laptop etc) and for some charitable and political contributions. After that I'm really at a total loss. I'd like to put some away for retirement and some for an eventual home purchase. What's the best way to do this?
Watching the ride the market has been on for the past week has not filled me with a zeal for investing. Ideally, I'd like to dump the money somewhere and not really mess with it much. Given the current economic volatility is there anything in particular I should be aware of or watch out for?
Finally, when the check actually arrives, what do I do with it? I've never dealt with anywhere near this sum of money. Do I put it in my checking account? My high interest (ha!) savings account? Go to the bank and open some kind of new account with it? I mean it when I say that I am totally clueless about this stuff.
TL;DR Version of My Saga: I somehow made it to nearly 30 without knowing anything about money. I need the MeFi Investment Squadron to help me turn an unexpected windfall into a manageable portfolio.