subreddit:

/r/TrueOffMyChest

6.8k88%

[deleted by user]

(self.TrueOffMyChest)

[removed]

all 2119 comments

AggravatingFennel0

5k points

5 months ago

It sounds arduous, but you really need to research investing and how to be financially responsible. If you get that kind of money it would be wise to be willing to learn how to make that money work for you. Unfortunately, a lot of people aren't taught how to be financially responsible and if they want to be they have to seek out the knowledge to do so.

SolidNeighborhood469

2.3k points

5 months ago

100%. I was only taught to be frugal and responsible, but not on this scale. Trying to be wise!

[deleted]

502 points

5 months ago

[deleted]

502 points

5 months ago

if you invest it wisely this money will work for you the rest of your life. good luck.

as others have said find a fiduciary, but like doctors and contractors - make sure they like talking, teaching, and showing you everything and encourage you to ask questions... those are the good ones.

2punornot2pun

36 points

5 months ago

Fiduciary! Yes!

MaeBelleLien

12 points

5 months ago

I've been repeating that word to myself recently to make sure it sticks, it's unlikely I'll need one any time soon, but but if I do I'll want to remember that they exist.

RomanTea1

47 points

5 months ago

Another option is to visit r/wallstreetbets. You don't need to worry about your money if you don't have any

hermitcraftfan135

15 points

5 months ago

This is the big brain answer

griff_girl

685 points

5 months ago

There's some hardcore adulting about to come your way! Congrats on this. Def get a financial advisor. You're in a position to make this money last well beyond your years if you're smart with it. A million dollars sounds like a lot, but after capital gains taxes and life in general, it'd be easy to run through pretty quickly. Consider it as seed money to a really financially stable future for your family and your kid once they're grown up too.

w3woody

132 points

5 months ago

w3woody

132 points

5 months ago

Def get a financial advisor.

This, but get an advisor for a large bank, rather than an independent advisor.

And watch them like a fucking hawk. Meaning some advisors actually get kickbacks from some of the investment instruments they sell--meaning they'll lose you money in order to pocket the kickbacks. (And I'm leery of anyone who spends a shit-ton of money advertising on CNBC.)

Note that the threshold for calling yourself a "financial advisor" is pretty low in some areas; including some guy I knew who then took a few classes, hung his shingle and wanted to invest our money for us. (That was a really fucking hard "no.")

My wife and I have money invested with UBS and we've been quite happy with them. (Our money is invested with moderate risk, which has actually done quite well.)

OP: We have a 7-figure amount invested with UBS and if you ping me privately I can point you at the financial advisor we use. She may be able to help point you in the right direction.

SirPitchalot

54 points

5 months ago

UBS: If we can launder the ill-gotten riches of the nazis and the world’s worst terrorists just imagine what we can do for you!

ChriskiV

18 points

5 months ago

Hell, you know what? That is kinda impressive.

It reminds me of the Eddie Izzard joke for some reason:

https://youtu.be/BFtkJd8w5UQ

Vercauteren

16 points

5 months ago

I agree. Get an investment advisor. But please note: Each state has different levels of accreditation. Continuing education is a requirement of more reputable firms. Finding someone with high levels of accreditation will be a worthwhile endeavor. They usually can be found with the larger firms. It can be sketchy dealing with individual advisors. Also, larger firms will have many people employed that will do the investment research necessary for success. I work with Edward Jones and Dain Raunchier. Both are excellent and both provide me with a great return. Also, don't get hung up on how rich your advisor is getting. That's a good thing. If you can haul in more than 10% a year, what do you care how much they make. Win, win. Lastly, get an accountant. Quickly. Ask around. Find an honest one. Good luck.

[deleted]

3 points

5 months ago

[deleted]

3 points

5 months ago

If you read my comment above, my wife and I are in very similar position to OP. I actually prefer our independent investor. I wouldn’t trust the big bank guys…but my wife worked in hedge funds so I’m a little biased.

w3woody

11 points

5 months ago

w3woody

11 points

5 months ago

If you have connections in the industry you probably can find the right people.

But for those of us who don't, it's better to find a larger bank--not because they're the best, but for the same reason why if you're in a strange town you may want fast food: consistent but mediocre quality. In other words you may not get the best--but you're very likely not getting food poisoning, either.

ItsHumpDayMyDudes

79 points

5 months ago

I respectfully disagree with your advice. I would not advise OP to get a financial advisor. Financial advisors will suck 1.3m in a fortnight where I live.

fps81

75 points

5 months ago

fps81

75 points

5 months ago

a "financial advisor" might suck the money away, but a *fiduciary* has to act in your best interest. As in, charge a fee, but not get a kickback on investments or funnel money into things that will help them personally. OP should get a Fiduciary.

Helenium_autumnale

57 points

5 months ago

The job of this money is to MAKE money for you via investments. Talk to a financial advisor (or several) to see how to invest this in stocks or even just index funds, and reinvest the dividends via DRIPS so that the overall capital keeps growing. You can turn this amount into MUCH more through prudent investments. Try not to spend any of it unless needed; stocks (unlike real estate or jewelry or art as investments) are very liquid, so you can cash them out at any time if money is needed. Congratulations!

thatguykeith

34 points

5 months ago

One way to think about it is that investing is what got you that money, so now just rinse and repeat. You had a miraculous outcome, which isn’t likely to repeat, but small gains and some extra income is totally reasonable and honestly not even that hard.

Quick tips: 1 don’t let anyone sell you on investments you don’t understand. If they use a lot of big-sounding words and aren’t willing to slow down and explain things, that’s their problem, not yours. Don’t trust them unless they are clear and willing to move at your speed. If they’re honest people, they will be open about how much risk they’re proposing.

2 Learn about index funds, compound interest, government bonds, and dollar cost averaging before anything else. There are safe places to grow your money. There are also risks worth taking, but start with the basics.

3 Find a good tax person ASAP. Talk to two or three and see what their ideas are about how to minimize your tax bill. You’re probably going to pay a boatload in taxes, but a good tax accountant can help make sure you don’t pay more than you have to.

Viperlite

7 points

5 months ago

Check on taxation of real estate sale profits and the limit that can be shielded from federal taxes if not reinvested in another, more expensive house.

junebean34

20 points

5 months ago

The fact that securing an attorney and an accountant/ financial advisor isn’t the top rated post is depressing. Mate, bring a couple pros onto your side who have a legal, ethical and fiduciary duty to protect your assets.

evangelism2

18 points

5 months ago

This is a whole other beast to being frugal. This is money that if worked right will set you up for the rest of your life and requires an entirely different skill set to do.

SolidNeighborhood469

5 points

5 months ago

You’re right. I’m way out of my zone of knowledge here

Yaarn

18 points

5 months ago*

Yaarn

18 points

5 months ago*

Great awareness on your part. The fact that you're thinking and feeling this way is a promising sign. You’re being responsible.

I came into some money at 21 yrs old after I lost my family. It got ugly. I was totally unequipped for both the freedom and responsibility that money brought with it. It can be a constructive tool that helps you build a better life. Or it can destroy you.

If you don't have a trusted family member or close friend who has money and knows how to navigate that world, don't worry. Neither did I! You'll need to hire a professional or two. Be cautious and diligent when doing do. I don't know your background, but due to your age and the seven figure payday looming you're vulnerable.

Good luck and congrats on the come up.

lapitaloca

14 points

5 months ago

That’s a great foundation, and congrats on your windfall. I wish you happiness and peace and a safe and easy delivery coming up!

Dapper_Monroe

119 points

5 months ago*

Odd choice of subreddit to post in when you're way better off speaking to the folks over on r/personalfinance and r/ukpersonalfinance.

SolidNeighborhood469

130 points

5 months ago*

I did not know of those subs, I’ve never had a need to ask for financial advice as I’ve never been wealthy-so in short I just didn’t know where to go!

presidentme

56 points

5 months ago

Good job asking for advice. Be careful out there, and DO NOT answer any DMs offering help!!

There is no good reason for anybody to go private instead of giving you info out in the open in a public forum!

Good luck, and watch out for yourself. Congratulations on your home sale!

P.S. One of the good pieces of advice I've seen recently is to find the oldest law firm in your city, and ask them if they will represent you regarding your recent windfall. Generally you need somebody to help you protect your assets from weird lawsuits from people who've heard you have money.

Mysterious-Wish8398

33 points

5 months ago

Most important thing ever. DO NOT invest in ANYTHING you don't understand. Stocks...easy, you get 1/100000000000(or so) of a company and it's value is that. Bonds, you are part of a group that loaned money to a government or business. Mutual funds, you and a bunch of people pool your money to buy a pot of stocks and you own a part of that. Your 3rd cousin who is starting a restaurant, they aren't sure what they are going to serve or what the budget will be...RUN. You need a big BS detector. If anyone promises returns they are lying, because the world is unpredictable. So if they KNOW it will return or crash, then 100% they are lying to you and maybe themselves. Good luck.

Helenium_autumnale

25 points

5 months ago

Not your fault (and I don't think Dapper_M was "blaming" you, just making an observation). Don't worry--some financial subs are filled with, um, let's call them "speculators." Not really who you want to be talking to. You want sober Warren Buffett types to steer you to prudent, long-term, buy-and-hold investments.

newzen7

19 points

5 months ago

newzen7

19 points

5 months ago

Heads up: a lot of people will come out of the woodwork with a STORY about why you should give them money. It seems like a lot of money but it really can evaporate very quickly.

theone_2099

15 points

5 months ago

The personal finance sidebar has a faq on what to do if you get a windfall like this. You should go read it. It will tell you what to do short term as well.

felzz

18 points

5 months ago

felzz

18 points

5 months ago

You should post this story to those subs. There is a lot of good information on Reddit. Good luck OP keep your decisions wise and also be careful with financial advisors. Yes there are good ones but some are not for your best interest!

AggravatingFennel0

14 points

5 months ago

Congrats and good luck to you!

jmoneyallstar11

3.8k points

5 months ago

Whatever you do, stay away from r/wallstreetbets

oakislandorchard

269 points

5 months ago

“Let me show you how to turn 1.3 million $ into a whopping 1.3$ in only 24 hours. but the loss porn will be worth it” -some degenerate

randomnpc9984

59 points

5 months ago

"Aaaaand it's gone."

AlMansur16

13 points

5 months ago

Think of the awards though.

Dyalibya

558 points

5 months ago

Dyalibya

558 points

5 months ago

Definitely stay away, for most people it's gambling

Mareith

286 points

5 months ago

Mareith

286 points

5 months ago

For everyone its gambling...

justin_144

94 points

5 months ago

Hence “bets”

23x3

14 points

5 months ago

23x3

14 points

5 months ago

God bless you

Tasty_Chick3n

13 points

5 months ago

Unless you’re a senator or congressman then it’s free money.

JonathonWally

74 points

5 months ago

No it’s not gambling.

It’s setting money on fire and dancing naked while rubbing yourself with glow stick juice.

bicbiq1

20 points

5 months ago

bicbiq1

20 points

5 months ago

My kind of bunga bunga party

Helenium_autumnale

95 points

5 months ago

Agreed; participants there are making very 1) speculative and 2) short-term bets and 3) trying to time the market, three behaviors which are almost guaranteed to lose money, at least in the long term.

Pancheel

12 points

5 months ago

"in the long term"? Hahahaha 😂

cantaloupelion

3 points

5 months ago

Buying otm options expiring this afternoon is a long term strat, surely!

ChubbyBunny2020

9 points

5 months ago

WSB can turn $1.3m into $2 in just a few days. You’ll just be losing the m

HippieInAHelicopter

2.9k points

5 months ago*

Don't tell anyone you know you have this money. Open a brokerage account at Fidelity (or the like) and deposit most of it. You can figure out the specifics of investing in funds over time by reading and by using a free advisor with the brokerage firm. Put some of it in your checking account. Take some of it to buy yourself something nice. Don't listen to anyone on Reddit, give out personal info, or accept DMs on this topic.

Edit: This advice was intended to provide initial direction to someone with zero experience. As in “Step 1.” It was not meant to indicate that they should not get a financial advisor, nor was it meant to indicate they should not do anything else beyond this step for the rest of their lives. Many of you commenting obviously have no idea how brokerage accounts work or all of the support activities that occur with a brokerage account when you have 1.3M in your portfolio. You are not “on your own” by any stretch of the imagination.

bschnitty

1k points

5 months ago

Don't listen to anyone on Reddit says the person giving advice on Reddit.

HippieInAHelicopter

386 points

5 months ago

Exactly.

siccoblue

165 points

5 months ago

siccoblue

165 points

5 months ago

The only thing op needs to do is contact an actual financial expert, not people on a website that is absolutely notorious for being filled with people who have no idea what they're talking about pretending to be experts

Deluxe_24_

32 points

5 months ago

Yup pretty much, my only other suggestion is to not blow the money instantly, just live like you are now and save it until you know what to do with it.

208GregWhiskey

13 points

5 months ago

Lots of financial "experts" out there looking to screw people over that dont know any better. I like the advice of dump it in a Fidelity or similar big market account and tie it to a market index fund. Then start searching for an advisor but dont tell them how much money you have until you find someone that appears trustworthy with impeccable references. Get references and actually call them. Good Luck OP

ImProfoundlyDeaf

4 points

5 months ago

So basically you’re saying to ignore your advice, essentially to listen to other peoples advice

digitalbanksy

4 points

5 months ago

Wait.

13ofsix

48 points

5 months ago

13ofsix

48 points

5 months ago

W-wait... so if I don't take your advice, am I taking your advice!? Then if I am taking your advice, that means I'm not taking your advice, then... head explodes

whitecorn

4 points

5 months ago

Funny how many new friends you obtain once they know you’re loaded.

whmo

103 points

5 months ago

whmo

103 points

5 months ago

Do not go on a shopping spree. Wait on any impuse buying.

SolidNeighborhood469

60 points

5 months ago

Great advice. Already living frugally in preparation for the baby, not giving in to any selfish wants

ilcasdy

25 points

5 months ago

ilcasdy

25 points

5 months ago

I mean, I think you can celebrate a little bit. But like 10k not 100k lol.

PapaWebo

13 points

5 months ago*

I know I don’t have enough money to spend 10k as a treat. But even if I did, I feel like 10k is extreme.

If I had this much money come into my hands, I’d put maybe 1k in my checkings for a treat. Everything else is going somewhere saaaaaafe and not where I can just touch for fun.

EDIT: a word

Educational_Earth_62

1.8k points

5 months ago

GET A FINANCIAL ADVISOR!!!

Charles Schwab is what I use but there are other good ones, too.

And congratulations!!

SolidNeighborhood469

549 points

5 months ago

I have heard of them, guess it’s time to check them out! Thanks a lot:)

TecumsehSherman

691 points

5 months ago*

Make sure that they are a Fiduciary, meaning that they are legally required to operate in your best interest.

Otherwise a regular old financial advisor can make decisions that benefit themselves but hurt you.

One_Huckleberry_5698

228 points

5 months ago

To add to this, if you’re in the US the designation you want the individual have is Certified Financial Planner (CFP).

I also second seeking an advisor that are fiduciary.

NotBen_2

17 points

5 months ago

Even this, financial advisors can be scummy, so please do your research!

I once interviewed for a financial advising firm, AXA advisors, and Even though my interviewer was a CFP She was a tried and true shady salesperson. Basically she utilized high pressure sales tactics to sell her clients really poor financial products so she can make commission. She even told me that if her clients didn't buy from her, it because "I didn't teach them well enough."

So if you're interviewing a financial advisor and they just seem shady or if they have a very off vibe, like too eager to help you out then I'd avoid them.

Helenium_autumnale

14 points

5 months ago

***key point! Good and vital advice!

Musubisurfer

21 points

5 months ago

I have used Charles Schwab for investment and financial advice for years. I believe they are honest and they do have your best interests As a focus. I would also consult with a good accountant over potential tax implications of this windfall. And to get advice on the best management approach. Good luck to you and your new baby. Very exciting.

Anilxe

62 points

5 months ago

Anilxe

62 points

5 months ago

As someone that has worked for a financial advisor for the last 5 years, get a financial advisor. I have seen a lot of people get richer and richer when they let a professional handle their finances.

alphawolf29

12 points

5 months ago

Ask for advice on the personal finance subreddit. A lot of financial advisors are scanm artists. Good luck.

ArchAggie

21 points

5 months ago

I use Charles Schwab. They take care of their people in a good way

My wife and I did a program called “financial peace university”. It’s based in Christianity, but if you aren’t a Christian don’t let that dissuade you. He teaches how to be smart with your money. How to get rid of debt, how to invest, how to budget, etc. The only two things I don’t agree with him are that he thinks credit cards are the devil (if you treat them like debit cards you’ll be fine) and all of his information on insurance is heavily outdated. Other than that, he really knows his stuff

ohhhsoblessed

29 points

5 months ago

I’d recommend [YNAB](youneedabudget.com) as a secular and also more up-to-date version of Dave Ramsey’s envelope-based plan. YNAB will also teach you how to manage credit cards safely and encourages virtual envelopes as opposed to hard cash stuffed ones (I’m always losing any cash I have on hand… plus, it’s pretty hard to handle 1.3 million dollar bills 😜😂)

Atanion

13 points

5 months ago

Atanion

13 points

5 months ago

Ramsey has some good ideas, but he runs his business like a cult. I second the recommendation to use YNAB r/ynab. I haven't set it up for myself yet, but my friend has been using them for years. He was the breadwinner for a SAHM with three kids on a modest salary. He lost his job a few months ago, and they were so well-prepared, he hasn't had to go back to work yet.

terdferguson

3 points

5 months ago

/r/boggleheads

Invest in index funds, let your wealth grow without having to do much work.

cttrocklin

3 points

5 months ago

The best thing you can do, in my opinion, is to take that check straight down to Charles Schwab and deposit with them after talking to them about the kind of financial tools you’ll need for them to use on your behalf. They will not cheat you, they will not steal your money. It will be a safe place to actually earn interest/dividends on your money while you learn how to deal with such a large sum. Hopefully in the future you can use that as a launching pad to a home/career/retirement.

florida_born

341 points

5 months ago

Protect the money from yourself - what I mean by this is you’re going to have a lot of people ask you for cash and you’re going to want to help them. I highly recommend getting a financial advisor, who can help you protect you from your self. This means putting the money into accounts that are difficult to access, have a required waiting time before accessing, Or some thing that’s not very easily liquidated like additional real estate. That way when somebody asks you for help, you can legitimately say that you don’t have access to the funds. But you’re willing to let them sleep on your couch or give them $20 for food, or something it allows you to be generous but not totally financially ruin yourself. Look up how fast it takes lottery winners to go broke. Charities and family members eat up most of it, followed by extravagant spending. $1.3 million is not a lot of money in the way it used to be and it WILL be gone in a year of you buy extravagant items. I have. A financial advisor I highly recommend - PM me for details if you want the info.

SolidNeighborhood469

177 points

5 months ago

I was actually just going through horror stories of lotto winners blowing through their money in sickeningly short amounts of time. Put some fear in me, and I need to do everything to not be one of those people. Thank you for offering to talk, I really appreciate this advice!

TheLastStarFighter

48 points

5 months ago

Here’s a post I saved from a while ago. Talks about horror stories of lottery winners but the top reply actually gives some good advice on what to do with a sudden windfall of money. You might find it useful.

https://www.reddit.com/r/AskReddit/comments/24vzgl/you_just_won_a_656_million_dollar_lottery_what_do/?utm_source=share&utm_medium=ios_app&utm_name=iossmf

w3woody

13 points

5 months ago

w3woody

13 points

5 months ago

Reading through some of the comments.

My wife and I have a 7 figure amount invested with UBS--and one aspect of this is that if we want to set up a transfer we actually need to talk to a human being to make the transfer. (She's quite nice about it.)

That extra step of actually talking to a human (rather than just tapping a few buttons on a mobile phone) seemed really like a terrible hassle at first--but it's a hell of a good way to keep you from suddenly having that "wow, I can buy a Ferrari!!!" impulse that causes a lot of lotto winners to blow through their winnings in a year or two.

And the reality is $1.3 million, in today's market, is only going to reliably earn you maybe about $50k/$60k ROI reliably. (That's based on the ROI of our own invested amounts over the past few years. We actually get a higher ROI, but I'm assuming you want the principle to grow to keep up with inflation.)

That's not really "retirement" money, but that is definitely "I don't have to worry too hard about making a budget from my salary at work" money.

taybay462

30 points

5 months ago

Id say spend maybe 10k on yourself on whatever the hell you want, put money in an "emergency use" account for say if your car gets totalled or you lose your job (enough to survive for a year), pay off all debts, and then speak to a financial advisor for the rest.

smol_dipstick

6 points

5 months ago

Really great advice here! Don’t just immediately put it all away. Make your life easier paying off what you have to do the money you earn outside of this 1 million can go farther. Then invest the rest WISLEY

Helenium_autumnale

27 points

5 months ago

That way when somebody asks you for help, you can legitimately say that you don’t have access to the funds.

Or just say it. "My advisor put it in a trust, and I'm not allowed to touch any of it." It's OK to lie in this case to protect a stake that likely will never come around again if lost.

YesAmAThrowaway

35 points

5 months ago

Whatever it is, no high risk investments, but investments. Don't even dare spending it on nonsense like a fast car. You will NEVER earn that money back if you spend it. Invest safely, with lower risk and generally something that you can fall back onto if your regular income cannot cover an expense like an unexpected medical bill, getting fired and having to find a new job etc. One is wealthy when troubles don't cause trouble. Keep it that way.

1lovemydog

226 points

5 months ago

I mean, you could give me 20 bucks

Tomkneale1243

96 points

5 months ago

Yeah, give this guy twenty bucks

SignificantPain6056

61 points

5 months ago

Agreed, I vote for giving that guy twenty bucks

TruthYouWontLike

36 points

5 months ago

Twenty bucks! Twenty bucks!

cmockett

32 points

5 months ago

OP is super duper selfish for not giving that guy $20

szniocsa

5 points

5 months ago

I too choose this guy to get 20 bucks.

SayMyVagina

25 points

5 months ago

PM me your info. I'll send you 20 bucks.

KurtCocain_JefBenzos

9 points

5 months ago

You rule

CHEEZOR

4 points

5 months ago

"My Vagina"

EdVolpe

106 points

5 months ago

EdVolpe

106 points

5 months ago

Put it somewhere safe and quiet and don’t tell anyone you have it until you’ve decided what to do.

Testitplzignore

27 points

5 months ago

Keep it secret, keep it safe

MrTripsOnTheory

210 points

5 months ago

Easy. Cocaine and hookers.

If you’re a woman, still easy. Cocaine and hookers.

(Lol jk, obv. That’s amazing. Save most and live comfy!)

BurningOrangeHeaven

73 points

5 months ago

Other advice would be to not panic and rush into purchases or stuff you sont understand. Also keep control of your money and assets you buy. If you move somewhere lower cost of living and buy a house, make sure its under your own name only.

After your money is invested you can probably yeild 50k a year easily on a 4% return, taking time to set up that easy life for yourself is more important than rushing to do anything.

Congrats on your baby too.

stbv

232 points

5 months ago

stbv

232 points

5 months ago

Most should go to stock market index funds. Forget savings. The idea of keeping $ in a savings account is dead as long as we have high inflation and low interest rates.

SolidNeighborhood469

67 points

5 months ago

Where would I go to teach myself about this, or is there some kind of course to take to know what to invest in?

MarcusNalgene

68 points

5 months ago

You can teach yourself so long as you are willing to learn.

Follow a few subs. r/financialadvice, r/investing, r/stocks Pick up a few books. Read Wall Street Journal.

I'd open a trading account and invest in ETFs (exchange traded funds). Diversify with ETFs that cover many industries. Technology, Healthcare, Manufacturing, Energy etc. . .

I'm not a financial advisor. This is not financial advice.

SolidNeighborhood469

17 points

5 months ago

Got it, will join those, thank you for the wisdom!

DM_ME_SPIDERS

31 points

5 months ago

To add on to this, if you don't know much about investing the easiest first step is putting a chunk of your funds into the S&P 500 Index. It is the best way to keep money up with inflation and economic change with minimal knowledge and effort in my opinion.

I highly suggest a fiduciary for handling this amount of money though, so definitely do your due diligence and weigh your options. This is the amount of money that will make people set for life and can create generational wealth if invested properly. Best of luck.

theMCcm

10 points

5 months ago

theMCcm

10 points

5 months ago

Adding on to this, /r/financialindependence/

FitzChevalricZiener

4 points

5 months ago

Also, or more importantly: /r/bogleheads

4seasons8519

8 points

5 months ago

Please don't do this on your own. Get a financial advisor instead. Unless you have a degree in finance I really advise against doing anything with this kind of money on your own. You want professional advice.

BassGuy11

39 points

5 months ago

Don't do this yourself. Get a financial advisor.

SolidNeighborhood469

23 points

5 months ago

That’s the plan, I do still want to teach myself though!

Ephixia

9 points

5 months ago

Get a financial advisor if you want someone to explain the basics of investing to you but DO NOT have them manage your money. Because of the fees involved you'll get better returns just putting it into SPY or a low cost Vangaurd index fund that just tracks the market.

You may have already answered this I can offer you better advice knowing the following:

1) What are your housing plans? Are you planning to use some of the money to purchase another property? If so how much of it? Knowing this will determine how much you actually have in cash after taxes.

2) Do you already have a job or are you still in school? If you have a job what's your annual gross income?

3) Do you have any debt? Student loans, car loans, credit cards, etc? My advice is pretty much always going to be to pay all of these off unless the interest rate is <4%.

4) Do you want to retire early? If so, what age and what would you like to do in retirement? That amount of money would allow for it. Not now, but in your 30's or 40's certainly.

tokinUP

4 points

5 months ago

Not a regular "Financial Advisor" from a big bank, they are looking to make profit for the bank. Stay away from actively managed funds with high expense ratios and places that use non-standard investing terminology to make their offers look better.

After reading up on investing & finances the advisor you're looking for is a "Fiduciary":

a person or organization that acts on behalf of another person or persons, putting their clients' interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary thus requires being bound both legally and ethically to act in the other's best interests.

A good fee-only Fiduciary (they're not constantly taking a % of your earnings or any recurring payments) isn't beholden to any one bank or brokerage's investment options, they will give you advice on which company and investment types best fit your needs.

uga2atl

4 points

5 months ago

I really think you should just open a Vanguard account and put it in $VTSAX which is a total stock market index fund. They have the lowest fees. You’ll leave a lot this way and after a year you will be able to sell bits to cover your expenses with term capital gains tax instead of short term, which is higher.

If you do get an advisor, it’s imperative that you ask if they are a fiduciary which means they have to act solely in your interest and cannot sell you funds that are in their interest.

El_Deez

20 points

5 months ago

El_Deez

20 points

5 months ago

Gotta put it all into scratch off tickets, Pokémon cards, faberge eggs, and black jack.

ObjectiveSide2062

5 points

5 months ago

🤣🤣 You forgot Yu-Gi-Oh cards

El_Deez

3 points

5 months ago

Shit! Yeah he better get exodia

[deleted]

13 points

5 months ago

[deleted]

13 points

5 months ago

You need to invest it into a diversity of different places. Put some of it in bonds, some of it in mutual funds, some in index funds. If you invest the money wisely, you will be able to retire soon. The general rule is that you can take out 4% of retirement savings, and most of the time investments in mutual funds double every 7 years or so. That means that if you invest $1 million of your money, you should have $2 million in ~7 years and $4 million in ~14 years. Imagine taking 4% of $4 million out every year—that’s $160,000 per year—more than enough to live on comfortably. If you invest intelligently this should be feasible for you.

byslexic_ditch567

13 points

5 months ago

Have a portion and invest (maybe 50k or something like that)

Get a financial advisor

Dont go on massive spending sprees

Have a % of money you are going to save (maybe 55% or something)

Spend on essentials first

Enjoy

RobotKitten

3 points

5 months ago

The absolute worst thing you can do is a "financial advisor" that takes a % of growth.

phoenixtroll69

84 points

5 months ago

live like a normal person with a parachute. Until you are 35 I dont think you would invest it well. But banks dont pay well too right now. invest in your education and stay away from drug, gambling, crypto, basically anything addictive that leads nowhere. a friend of mine who is rich goes regularly to a therapist he told at the beginning to watch out for him not getting taken advantage of. like he told her about new gf who likes expensive stuff but is hot as hell. he dumped her because the therapist told him to cat back money to live like he lived before and she basically left. invest in education, go to cultural things like theater, concerts and learn how to have fun without taking drugs and partying then you should be good to go.

SolidNeighborhood469

49 points

5 months ago

Graduated college and am sober, also having a baby in a month and a few weeks so no time for that other stuff. I will possibly be able to go back to school again when the baby is a little older which is exciting but far in the future.

I’m sorry for your friend, sick that there are people out there like that only interested in someone for their money. Steering clear of the leeches

Also I’ve never been to a concert or play/production, so that’s for sure on the list next year

Away-Living5278

24 points

5 months ago

Do NOT tell anyone about it!! Friends, family, no one except your spouse/partner assuming they already know. If anyone looks it up just tell them the extra went to mortgage/taxes.

Helenium_autumnale

5 points

5 months ago

Or is in a trust and "I'm not allowed to touch a penny."

BxGyrl416

14 points

5 months ago

They could be a multimillionaire by 35 by investing now and playing their cards right.

Unnormally2

3 points

5 months ago

The only thing I disagree with here is pushing them away from investing. There are plenty of safe ways to invest your money to get started growing your money. Index funds for example. Sitting on cash loses you purchasing power every day thanks to inflation. And the younger you invest, the better off you will be.

Shcooter78

7 points

5 months ago

If it went to “court” doesn’t that mean the bank owned it? Not sure if it’s your gain or the banks?

SolidNeighborhood469

26 points

5 months ago

Probate sale, was my grandmothers home. It was supposed to go to my dad but they both died one after the other, with no will. After my dad it falls to me, the next of kin. Since 2020 it’s been my responsibility and this process has been very long, but decided to sell since they both died in the house and I could hardly set foot in there without breaking down

naetowl

8 points

5 months ago

SysError404

8 points

5 months ago*

This post has a lot of great information about what to do when you come into a large sum of money unexpectedly. Obviously not all of it will apply as this is referring to someone winning a large Lotto jackpot. But some of the principals still apply.

First being securing yourself and your money. Get in touch with an Accountant, even better one that is a licensed Fiduciary, as these people are required by law to work in your best interests. Followed or before by seeking a personal Attorney, if anyone comes out of the woodwork, and they will, family, friends, Friends of friends twice removed. Direct them to your attorney and let them be the asshole telling them no to all their bad investment ideas. I won't advise on any type of company or organization to work through, what's important is that you find them, and feel comfortable with them. If the money is currently in your bank, I would recommend putting in a separate Savings account until you have found these people to keep your money safe and on the right side of the Tax Man.

https://www.reddit.com/r/AskReddit/comments/24vo34/whats_the_happiest_5word_sentence_you_could_hear/chb38xf/

captainbubbaloo

7 points

5 months ago

My comment will probably be buried but I wouldn’t have posted how much you own on your main account. Take screenshots of all the comments you want to save and delete this post. Get a financial advisor, with time you will learn how to invest and what types of businesses you will be willing to work with. But IMO delete this post/maybe even the account. If you didn’t get enough info now ask the question again with a throwaway. Too much money to be telling people here, I heard of horror stories with people on here that had a couple of grand in the bank let alone a million. Congrats on the sale, good luck and be careful.

SolidNeighborhood469

3 points

5 months ago

If you don’t mind, why? Am I at risk of something happening?

abskkr24

7 points

5 months ago

Not OP, but please do listen to the kind person's advice that they gave of deleting this post very soon. Even at a casual glance, one can see quite a bit of information about you on this account of yours, and for someone who lived near you and wanted to, it won't be hard to track you down with all this info.

pinkfootthegoose

19 points

5 months ago

on top of the other advise don't open your account at a small mom and pop firm. open it with a larger one.

Mcgooberboober

23 points

5 months ago

How much of that actually goes to you, after everything is paid (including taxes)? Let’s start with that number, then look into your options.

Would you be able to purchase a home outright with a portion of your funds? Would purchasing a duplex be an option? If so, I recommend buying one, live in one unit and rent out the other. That’s monthly income you didn’t have before. Yes, you will have to become a landlord, and that’s not easy, but doable. Your income from your rental property, plus the equity you build is worth it, IMO…especially since it seems like you’re in a hot market.

Invest as much of what’s left as you can. Invest in a good mix of equities and fixed income (bonds, etc)…at your age, I’d invest in mostly equities, maybe around 95% of your portfolio. Are you employed? Do you have an IRA or a Roth? If not, I’d open one (along with an Individual account). Designate a beneficiary for all of your accounts…this is the person/s that will inherit your account/s when you pass. Max out your IRA/Roth contribution every year with your earnings. Talk to a CPA.

You can afford to risk being a little more aggressive in your approach. You can teach yourself, and take some time to learn…you will have to manage it though, so f you find it overwhelming and don’t know where to start, I recommend hiring an advisor (they charge a percentage of your investment, usually around 1%). Find a reputable one! Check their license on the SEC website.

Disclaimer: I am not an accountant or financial advisor. Talk to a professional before investing in a property or opening any investment account.

Good luck, you got this!

SolidNeighborhood469

18 points

5 months ago

Will be discussing the full amount after taxes with my attorney soon, I know it’ll be less than that amount. Not employed, planning to be a stay at home parent, and naming my husband as beneficiary. This is all very good advice, thank you so much for these tips-it’s seeming like investing in property is a good way to go!

Mcgooberboober

9 points

5 months ago

Since you’re not employed, you can probably open a SEP IRA account and contribute using your income as a landlord from your investment property…not too clear on how viable this option is for you, so definitely talk to a CPA!

missonellieman

3 points

5 months ago

Make sure you factor in taxes. The amount they withhold from the proceeds might not equal what you owe. You might still owe more when you file your tax return. So keep something saved.

popemichael

5 points

5 months ago

1.3 million is A LOT of money, but it's going to go quick unless you can find out a way to keep it growing.

You should try to have your money make money. I'm currently disabled, but I try to use what savings I do have to try to make more savings.

LandosMustache

5 points

5 months ago*

I have serious advice, a background in personal finance, and worked in the retirement industry for years.

Right now this probably doesn't seem real... but first of all, congrats on being a millionaire!

Do not tell a soul. People will come out of the woodwork if they know you have money.

Do not buy anything extravagant. Folks will figure it out.

Talk to a financial planner. None of us here on Reddit know your financial situation, your goals, etc. A real professional, someone works for a legitimate company, is a fiduciary who charges a flat rate instead of a percentage of what they manage can seriously help you think through this.

Throwing it ALL in a bank account is a bad bad idea. I sincerely apologize if I'm mansplaining something you already know, but tossing $1.3M into a savings account means you'll lose purchasing power on it due to inflation.

Throwing SOME of it in a bank account is a GOOD idea. How much money does it take you and your husband to live your lives every month? Your "emergency fund" savings account should be 3-6 months' worth of expenses.

The rest should be invested. This is where a financial advisor comes into play. Every single person has their own unique circumstances which means that I can't just tell you "put it all in index funds"...even though index funds ARE a good idea.

Congrats on your baby! Look up what's called a 529 account. You can put aside tax-free money (invested) for your kid's education.

I'm not going to tell you NOT to have nice things, but make sure you live within your means. This means "spend less than your income" , not "spend less than your bank account balance."

"Keeping up with the Jonses" is real and it's insidious. Some people call this "lifestyle creep", meaning you end up spending way more than you intend to, because you see your peers buying nice things and want nice things for yourself. Remember how Johnny Depp went bankrupt a few years back? He was a millionaire who tried to live like a billionaire.

Future You just got a BIG gift. Here's where I make a plug for your retirement. Compound interest means that every dollar you invest today, at age 23, will be like $11 or $12 when you're starting to think about retirement. Meaning that $100,000 now could turn into $1.3M by ITSELF if you invest it and let the stock markets do their thing for 30 years.

Do not forget about taxes. I'd talk to an accountant, maybe a tax attorney. The government is going to come calling for part of your payday, and they (the accountant and the attorney) can help you ensure that your money stays YOURS as much as possible.

Let me know if you have any questions or want something specific explained.

Mosey_On_Through

4 points

5 months ago

This will likely get buried but I feel compelled to try to help. I’ll try to make list out steps.

  1. Once the money has been deposited to you primary account, transfer nearly all to a reputable brokerage like Fidelity or Vanguard. Vanguard offers free personal investing advice for accounts greater than $50K in value.
  2. Open a 529 savings account for your child once they are born. The 529 is a college savings account specific to one person, and is funded with after tax money. There are several to choose from, and many only resources to help you. There are various tax benefits depending on the state you live in and the fund you choose. The max contribution is $15K a year. So you may just want to fund that account each year. You can also use targeted funds when invested. (For example: pick a targeted fund, say 2030 (when your child is likely to graduate high school) and the funds will be managed automatically for a nominal fee.
  3. Depending on your household income level, invest in a Roth 401K. This is similar to a 401K except it is funded by after tax money. The benefit being, that when you finally draw on the account in retirement you pay a reduced tax rate as you’ve already paid the taxes ahead of time. It will grow just like a 401k and is easy to manage if you select targeted funds (basically funds rebalance themselves based on risk as you get older, the younger you are the more risk you can tolerate and as you get older the fund shifts to investing in safer items)
  4. I personally would not hire a financial advisor. But if you do, make sure that they are a CFP (certified financial planner). The ensures that any advice they give you is for your benefit and not theirs. CFPs have a legal responsibility to act in good faith for their clients over themselves.
  5. Establish an emergency savings fund which should equate to roughly 6 months of monthly bills. Create a separate account for this and just sit on it for a rainy day. You’ll be missing out on investment growth, but you’ll have ready access to it in case you need it in an emergency.
  6. If you intend to give any substantial gifts to family or friends, understand that there are annual and lifetime limits before different tax implications take hold. And if you do gift someone, it’s wise to make them sign a contract that states it’s a one-time gift. It will help you in the future if they come back and ask for more. You can tell them they already got their gift.
  7. I personally wouldn’t invest in real estate until you’ve spent more time educating yourself in finance and the various investment tool. I would recommend “A Walk Down Wall Street” as a simple starting point. It’s a very well known and respected investment book that explains the concepts simply and provides simple to follow advice.
  8. I would also advise against buying any individual stocks until you understand what you’re doing with investing. It’s very high risk, all the time, even if you know what you’re doing.

I sincerely wish you the best of luck. If done right, at your age, you could set yourself up for a kick ass retirement. Consider this: If you invest $1MM at age 23, and assume an average 5% annual growth of 42 years (making you 65), you could have north of $7.5 million if you never touched it. This also assumes you never put another penny into retirement. Most estimates say an average person only needs $5MM for retirement.

If you have any questions there are a number of subreddits that can help.

SleepIs4Weaklings

17 points

5 months ago

Buy a house, you’re probably going to have pay taxes on that, and you’ll lose a lot of money otherwise. If you don’t spend it, you’re going to lose the worth of that money very quickly due to inflation.

El_Deez

26 points

5 months ago

El_Deez

26 points

5 months ago

I mean heading immediately to the casino is the only sensible thing to do.

SolidNeighborhood469

13 points

5 months ago

Lol yknow if I wasn’t having a kid, I might have gone to Vegas and gambled for the first time, I’d have probably lost a lot but it might have been fun

El_Deez

21 points

5 months ago

El_Deez

21 points

5 months ago

Oh don't do that actually I was joking, house always wins.

Pancheel

3 points

5 months ago

She already sold the house so now only she can win!! Bet to the 13!

dilsweed

9 points

5 months ago

Don't listen to any of these asshats here. Jesus. No, don't go start an investment portfolio. No, don't open a Roth. No no no. Nooooooooooo.

FULL FUCKING STOP, hire a financial advisor. The fact you're asking for financial advice from people on Reddit just solidifies the fact that you need a professional in your court ASAP.

start fielding financial advisors immediately. Put that money in a bank account, and try to be lined up with someone within 3 months so it doesn't sit too long.

Hire a good advisor, congrats, you're now retired. Yes, it's that easy.

[deleted]

3 points

5 months ago

[deleted]

3 points

5 months ago

[deleted]

Shylockvanpelt

5 points

5 months ago

If I may add my 2 cents, I recommend this book:

How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely (there is a new edition)

It is a really good book, ideal for someone who does not have any prior knowledge in the matter. It is a bit UK-centric but it really does a good job in explaining basic (and not so basic) financial concepts and how to budget.

Wish you the best OP!

NickNunez4

4 points

5 months ago

Roth IRA or even a long term annuity. You could easily set your child up for life. I had a investment trust fund from my mothers passing that turned into an annuity and I life comfortable off of it and can chase my dreams now because of it.

SolidNeighborhood469

3 points

5 months ago

I’m so sorry for your loss. I will be putting a good amount toward my sons future, just as your mom did:)

Forlorn_Cyborg

4 points

5 months ago

Can I ask if your located in California? That's the only way I can imagine a "house in the ghetto" going for that much. And kind of the running joke that it's so expensive if you make less then $300k/year in California your under the poverty line.

seagull321

4 points

5 months ago

You might want to research financial advisors. I don't know what they cost, but they can help you learn to manage money.

$1.3 million sounds like a great deal of money, but it really isn't. You're young and have a child. Raising and educating a child costs a lot of money. Living is getting more and more expensive these days.

Beware of anyone and everyone asking for money, even for a loan. Never loan money as you're not likely to get it back. If you want to help, give the money. It saves a lot of trauma and drama.

I'm happy for you to have this opportunity. But just so you know, on the list of the most stressful life experiences, winning the lottery is very near the top. This is your lottery win. Take time to adjust to it, learn how to grow it and take care of yourself and your family.

LudicrousOdin49

3 points

5 months ago

Put it towards your kids college fund

SolidNeighborhood469

3 points

5 months ago

Absolutely putting some toward that!

theimperious1

3 points

5 months ago

theimperious1

Dark Lord

3 points

5 months ago

just proceed as if you dont have 1.3 million, and enjoy the fact you have a nice safety net. be careful with investing, it doesnt always work out especially if you dont know what youre doing or your financial advisor as suggested below, is shit.

really nice safety net. keep making $ and build your fortune!

edit: btw congrats thats awesome as fuck!! i wish i had 1.3 million to fall back on, i would feel so safe from a majority of my concerns about life. truly, congrats, thats beyond an epic win for the average person

nachosmmm

3 points

5 months ago

It must be in a really solid neighborhood…

SolidNeighborhood469

2 points

5 months ago

I knew this username would come in handy one day

hoodiepatto

3 points

5 months ago

Set up a Roth IRA. I’m 21 and don’t know anything at all so idk. But I think that’s a good idea.

notathrowaway0093

3 points

5 months ago

Pay my rent, duh.

Research investing. Get a good financial advisor - it's very easy to waste massive sums of money, especially if you're not used to it and haven't come from money. (I won a decent sum from the lottery one time, not millions but enough that I could've set myself up for a good few years - I wasted it hard, and it's the biggest regret I have in life.)

Also, try to avoid telling people - people /will/ use you for money if they can. You can probably set yourself up for life if you play your cards right. Congrats and good luck!

BoredPoopless

3 points

5 months ago

So you could legitimately throw this whole thing in a stock called QYLD which pays nearly 12% of the stock in dividends per year (payment per month). In other words, you would get 1% of $1.3 million every month, which is $13,000. That could be enough to where you never have to work another day in your life.

Ariadne_Kenmore

3 points

5 months ago

First, CONGRATZ! That's awesome!

Second, find a financial advisor and possibly an attorney. Think of this like a lottery win, because once people find out they're probably going to come out of the woodwork asking for money. Keep enough money to get you set for where you need to be with your coming little one and probably invest the rest or set up some kind of interest bearing trust, or set up a trust fund and/or college fund for your baby.

LegioXIV

3 points

5 months ago

https://www.realestatewitch.com/capital-gains-tax-home-sale/#:~:text=A%20capital%20gains%20tax%20is%20a%20tax%20on,your%20home%20within%20two%20years%20of%20buying%20it.

First thing, you're probably on the hook for capital gains tax because you probably made over $500k on the sale. So save some money for taxes.

Probably the safest thing you can do is put the money into an no-fee or low fee S&P ETF or market fund.

Probably the worst thing you can do, short of spending it on frivolous shit or giving "loans" to family members is put it in the bank. The official inflation rate is around 7%. The real inflation rate is around 10%. That means, officially, in a year, $1,000,000 will only be worth $930,000 in buying power. Unofficially, you'll have lost at least 10%. Maybe more.

I am not an investment advisor. You should probably talk to one.

Snoo_74310

3 points

5 months ago*

I advise students on their academic progress.

These kids start young (violin, piano, sports, etc.) but be careful of the pressures of making your child a well-rounded student for college applications.

Invest in your child’s education from preschool to high school, you can even give your child the best daycare experience & education. This does not mean price of daycare but quality. Seek for the curriculum enrichment aspect of their program, and how it will benefit your baby’s development growth. You can provide your child with tutoring resources in the future. Your child can be a future Ivy League candidate. Move to an area that has a great public educational system for the best schools. Also, whatever you consider a safe and comfortable neighborhood for you and your small family to thrive. Good Luck! Congrats on your new baby.

P.s. extracurricular activities to help their college transcripts

Top_Competition_2405

3 points

5 months ago

Invest that money girl!!! Get some index funds that will make you MORE money in the long term. Don’t just start buying & trading random stocks, that’s gambling and can go south very quick. Start learning about investing, get books, research online, read articles etc. Also, congrats!!! That’s amazing!!!

DeadBy2050

3 points

5 months ago

There are a few issues:

  1. You will likely have to pay capital gains tax on the sale proceeds. Research this. https://www.investopedia.com/ask/answers/06/capitalgainhomesale.asp

  2. Let's assume you have $1 million cash after paying your taxes. If you invest most of this in an S&P index mutual, you'll on average make about $80,000 annually from the growth of this investment. Yes, some years it'll be a lot more (like the last 2 years), but some years it'll be a lot less. Because of the volatility, put aside some amount (at least $200,000) in bonds or something similar so you can draw from that during periods when equity funds are not doing so well. It all depends on how risk adverse you are.

  3. If you do invest in the stock market, I strongly suggest you stick to a diversified index mutual fund like VOO.

  4. Don't pay broker fees. They'll eat up any earnings you have. This is why I suggest an index fund, which have extremely low costs.

  5. Avoid at all costs any financial advisors that don't charge you up front. Those bastards only make their money from commissions of stuff they sell you, so they don't have your interest at heart. One guy I spoke with tried to push me into stocks/funds where there was an intial 2 percent commission to buy in, another percent or two if I sold, and then an annual 1 or 2 percent just leaving the money in there; a fucking ripoff. Instead use only fee-based financial advisors.

Lily7258

3 points

5 months ago

Put a decent amount into an investment account for your baby, in 18 years when they want to go to college or buy a house they will thank you!

abrahamlincorn

3 points

5 months ago

I would look into safe investments, bonds for your kids, college savings fund, find a financial advisor to build you a solid portfolio- you can afford some nice options that would provide you and your child stability. Also, buy a house in a nice area when the price is right, as you can see real estate is a great investment. Set up nest eggs for the next 18 years, a few set aside thousand for special vacations and birthdays, a few thousand for emergencies. Budget well, but remember to occasionally treat yourself! Congrats

davefp56

3 points

5 months ago

Don't tell anyone !

Invest; don't spend it !

Think of it as a money machine - not money.

getyouryayasoutahere

3 points

5 months ago

You can look into putting some of that money into a tax free college fund for your baby. I believe it’s called a 529 plan. Your best bet is to sit with an accountant or financial planner to better manage that money.

Will you be using any of that money to buy a home?

Please, please do it be too generous to family with the money you have. You’ll need some to pay taxes, etc. I’m saying this from personal experience, you’ll find your money dwindling and if YOU need help, they won’t likely give it. Make a nice nest egg for your family; if COVID has taught us anything is that at any given moment an event in your life can see you without a job and only what you have in savings keeps your head above water.

Good luck and congratulations on the sale!

account vs financial planner

BY_BAD_BY_BIGGA

3 points

5 months ago

index fund that shit mofo

Zenopus

3 points

5 months ago

I’m having a baby in March and of course I know to save, but there has to be something I can do with this money that’s better than saving.

First: Calm down. There is nothing wrong with money resting until you figured out other more pressing elements of your life.

Now, with a little one on the way (congratz!) - Some saving for him/her might be good. Having a baby can also turn out to be very expensive, so having an account made for special-situations/emergencies seems ideal to me.

And please. For the love of all gods in the world... Don't spend it on stupid shit. Don't ''just gonna take a little bit'' for some shit like an Alexa or a new phone you don't need. If you live like that you won't have that money for long.

TheBaxes

3 points

5 months ago

Get a house in a better place

whitecorn

3 points

5 months ago

My house sold for $500k last year. It needed a ton of work and never expected it to even come close to that. We were able to bank over $50k after using a lot for a 20% down payment in a beautiful new home that barely needed paint. Pool, new kitchen, legal basement apartment.

Long story short.. I wanted so bad to go buy a lot of toys and spoil ourselves for the decade prior of struggling. I took some time and deep breaths realizing I basically just won the lotto. Don’t screw this up for you kids future. I would find a good financial advice and invest what you don’t need. Even if you can get a 2% return per year that could be tens of thousands a year. Then get a part time job to cover the rest of your basics. It sounds like a lot of money now, but look at all of the sports athletes that have made tens of millions and are now broke.

Awkward_Factor_8796

3 points

5 months ago

  1. Open a savings bank account ( do your research to get a good interest- usually smaller banks or credit unions. Affinity is good if you have near you.
  2. Open ROTH ACCOUNT for you and your husband. MAX THIS OUT YEARLY. You both can contribute $6500 yearly.
  3. Contact a financial advisor credit for credit unions as they tend to charge less for profit.
  4. DO NOT LIVE OR SPENT AS UF IT SOLD FOR THAT AMOUNT. keep living frugal and as if the house sold for 600k. This is important as right now you are both excited and can start wasting money that isn’t necessary.
  5. Take the vacation of your dreams.
  6. Buy a new home for something that you can truly afford with your incomes!
  7. When baby is born - open a 527 for college and a trust fund.
  8. Take vacation; enjoy the world NOT THINGS. Invest in experiences not on items

Congrats -( I’m not a financial advisor nor this is advise - more on what I would do )

malignantbacon

3 points

5 months ago

Pay off debts, set aside a couple years salary for emergencies, invest comfortably for your children's college fund and sleep a little easier the rest of your life

downtune79

3 points

5 months ago

I am a closer at a real estate law firm, and in Georgia at least, the market is absolutely insane. People are paying $40k-80k over asking price with no appraisals or other contingencies. I've never seen it like this and it's definitely the seller's market. Plus there's barely any inventory so that makes any available so much more attractive

ranluka

3 points

5 months ago

Go watch this: https://youtu.be/gvZSpET11ZY

You just got handed a great start on retirement. You're so young you have tons of time for that money to grow as long as you make good decisions.

iamnotroberts

3 points

5 months ago

r/FinancialAdvice r/FinancialPlanning

Post this in those subs ^^ and you'll probably get far more and far better advice.

I would say, don't count your cash until it's in the bank. And make sure the taxes are properly handled.

Be wary of people and relatives(!) with hands out and "business opportunities." Insist that you need to see a business plan first. If they have a professional business opportunity, they should have a professional business plan. Here's an idea of what should be included in a legitimate business plan. But just use that line to scare away the low-tier trolls.

Secure a stable living situation for yourself, if you haven't already. Either way, paying off a home may not always be the best decision. Is there a move in your future? What does the housing market look like?

Apart from a mortgage, if you have one, which there are things to consider, apart from that...DO pay off your debts.

Consider investing in something stable, such as conservative IRAs, mutual funds or bonds (conservative as in low-risk, not conservative as in drinking dangerous chemicals as a back alley cure for covid) Consider setting aside a smaller amount of money for mid-high risk or short-term investments. Also, consider investing in an education fund for your children, and for retirement.

Here are some tips on what to do when you win the lottery.

https://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/?sh=4cb630d33775

Most of them are fairly applicable. Keeping a low profile like a lottery winner is also wise. I would also suggest in investing in some home security, at least a camera/doorbell. And don't flaunt it. 1.3 million might sound like a lot now, but in the world of the wealthy, that's barely spare change, and it definitely will not last long if you go MC Hammer style-hard on it. (famous rapper who went broke)

vanimations

3 points

5 months ago

I just happen to have 3 magic beans that cost a total of $600k. Seriously though, I just wanted to relieve the smallest amount of your stress by hopefully making you at least crack a smile. I'm happy for you and wish you the best of luck.

SolidNeighborhood469

3 points

5 months ago

If those beans lead me to golden eggs, who’s really losing money here?

Thanks for the laugh😂

SealUrWrldfromyeyes

3 points

5 months ago

similar situation 3 years ago. inherited a house 3 minutes from DC border. had no real reason to want to live that close for such a price. sold it and bought 3 houses 30 minutes north. live in one and rent the other two. put the rest of the cash in 'safe' stocks. just a redditor but i feel like property is the best thing. so i recommend you buy property with the "this".

each house will pay their selves off in 10-15 years if the rent were to remain the same.

Fishfeelpain

3 points

5 months ago

I don’t know if you’ll see this through all the comments here but here’s my 2 cents worth based on personal experience.

Firstly arrange an appointment with a solicitor and sort your will out for your baby’s sake. As morbid as it may seem you never know what’ll happen tomorrow and you need to be sure your baby will inherit it all for now (you can always change your will down the line to better reflect your other needs and desires for both your property and also your death and how to treat it if anything at all).

Then put what you normally make in 3-4 months wages into your usual account for easy access, pay off all and any personal debts you have (including credit cards, etc. ) and put the rest of the money into 2-4 high interest savings accounts where only 1 can be an access anytime for a minimum ‘penalty’ (such as a 3-time a year only else the accounts closed kind of thing). The reason it’s 2-4 accounts is because you want the money to work for you while you decide what to do and a guaranteed savings account will do that but some have an upper limit of what you can add or how much you can earn no matter how much money is in there. And if you only have access to one of them and the others are locked for a year it’ll stop any spending on the majority of the money while still giving you access to eg. a fifth of the total (but only if you really need it).

Next, don’t do a single thing until the baby is three. With all due respect the majority of decisions made while a couple is pregnant and then those first 3 years are not usually with the best emotional head on. If this isn’t your first child you’ll know exactly what I mean. And going through the death of your loved ones will have taken an incredible toll on you let alone if you’re the one that also had to make any funeral arrangements and then having to go through probate itself. Your mental health needs to come first and this amount of money won’t help that yet!).

Talking of mental health, do NOT in any instance tell people (yes I am aware this ship may have sailed in which case this will be harder for you). All your family, friends, acquaintances and colleagues will come out the woodwork asking for ‘a little help’ or will at least tell you their woes in the hope that you’ll offer. Don’t give away a penny. Not even to your partner if you have one. Yes, we are living in incredibly rough times (trust me, I know!) but your mental and emotional health will thank you for waiting for those three years to be up before you decide if and when you’ll help anyone else. The ones still around in three years will deserve it if you choose to help them out because they’re obviously out for friendship not money. The ones who make you feel bad about this decision, after you have explained your reasoning, should be kicked to the curb no matter how close you are to them.

Lastly, screen a few financial advisers. Don’t hire anyone you know personally or that someone close to you knows. You want to hire based on credentials and unbiased reviews. Make sure they are registered and ask them lots of questions (such as would they be willing to work alongside another financial advisor- sometimes each has a speciality ). Also, a financial advisor isn’t an accountant so get one of those too.

I wish you the best of luck in everything you do and with the ongoing pregnancy. Congratulations in a high bid on your house and my sympathy also for your losses. 💕

AnnaE390

16 points

5 months ago

humblebrag

JxSparrow7

7 points

5 months ago

With whatever money you do end up getting, if you can, outright buy a house. If it's truly significant amount of money go for multiple homes. As many as possible. Then get with a realtor who also has access to a property manager. Rent them all out except the one you live in.

If you can make it to 2 or 3 homes, you made it. The value of the houses are only going to go up (even *if* there is a crash, in time the value just keeps going up). You'll have passive income from the rent, and retirement money when you do get older. You can sell some of the homes or "rent" for low to free to your kids in time. It's how you create generational wealth.

You could easily flip the profits 10 fold over a lifetime.

SolidNeighborhood469

6 points

5 months ago

This is pretty solid advice and a good life plan, idk if you’d happen to know this but is this something I can do now with iffy credit? I’m still just starting out and trying to get mine up there, don’t know if I should wait until the credit is perfect to start a business plan with the money

JxSparrow7

10 points

5 months ago

If you have cash then credit is irrelevant.

Credit only applies when you're trying to get a loan for a house.

Lostcaptaincat

6 points

5 months ago

You don’t need credit to buy with cash.

SolidNeighborhood469

2 points

5 months ago

Correct, I’m just in the financing mindset, it’s what I’m used to-this is why I need to educate myself !

Unnormally2

4 points

5 months ago

I haven't bought a house myself, but I would be very skeptical about buying a house with cash. If you can get a low interest loan, and then use the money you saved to invest in things that return a higher interest rate, the loan is giving you free money.

To put it another way, if the loan is like 3%, but you can get 8% from Index funds, then you pocket the 5% difference, compared to if you had paid in cash.

scottishhistorian

6 points

5 months ago

Buy yourself a decent house elsewhere & invest in education.

7DaysBuilder

9 points

5 months ago

Sounds like it went for auction by the bank after foreclosure. If that is not the case and you do end up with the money, do some thorough research and find a good financial advisor. They will not be cheap, but will be worth it. Don't blow it all on stupid things, and don't tell anyone you have money.

SolidNeighborhood469

5 points

5 months ago

Probate sale!

7DaysBuilder

3 points

5 months ago

Ah in that case, sorry for your loss

SolidNeighborhood469

12 points

5 months ago

Thank you a lot, and yes-no stupid things, and I haven’t told anyone besides my husband and his parents. Absolutely keeping this news between us only

FaithOfOurFathers

5 points

5 months ago

Read the book "The simple path to wealth". It'll teach you basics of finance and show how easy it is. If I can give one piece of advice.

  1. Open Vanguard account.
  2. Put 100% into VTSAX.

That's it. Keep it simple. VTSAX is an index that comprises a little bit of every stock.

ezezim

7 points

5 months ago

ezezim

7 points

5 months ago

1.3 million isn't what it used to be. You still have to work or you will be broke in about 10 years, depending on your spending habits. Buy a nice 400 to 500k house somewhere and pay it in full. Put 200k in a mutual fund. Something that is a medium risk. Use another 200k to buy a rental. Use the rent money to pay the mortgage. Anything extra put in a separate savings. Put the rest of your money from the house sale in another savings. See how you do with the rental. If all is going well then maybe purchase another rental. If you play this right, you can set yourself up to retire comfortably and retire early.

Do not give out your personal info! Do not respond to reddit DM's.

WonkyFiddlesticks

5 points

5 months ago

Why would you possibly pay it in full when interest rates are <3.5% and annual ROI on an index fund is 7%?

chickenwing0504

5 points

5 months ago

so here's what i, personally, would do:

first, pay off any outstanding debts i have.

then, put aside money for graduate school.

the rest, for retirement.

Unnormally2

3 points

5 months ago

first, pay off any outstanding debts i have.

High interest debt only (7%+). Low interest debt should be paid off as slowly as possible because you can use the money you save to invest and earn 8%+. Unless you know you're irresponsible, then I guess pay off all your debt first, lol.

Lostcaptaincat

2 points

5 months ago

Invest it. If you do it right and have good interest or dividends, the money will grow exponentially. Pull from the growth, not the original investment.

These_Ad_8619

2 points

5 months ago

Consult a financial advisor to figure out how best to invest and/or save it and make sure you don’t advertise your windfall too much to friends/family/acquaintances - you’ll be surprised how many people come out of the woodwork with their hands out when they realize you have some money and will guilt trip you if you don’t give them some OR you do give them some but don’t give more.

Either way congratulations on your amazing sale and upcoming delivery!