<p>I’ve recently inherited $50,000 and I’m wondering what to do with the money. Fortunately, we are relatively debt-free. Otherwise, I’d use it to pay bills. Suppose I’ll save it for a ‘rainy day’ but I’m not sure how to invest it.</p>
<p>I would put it into a large cap mutual fund.</p>
<p>What’s your risk tolerance and investment horizon?</p>
<p>It would depend on a lot of things.</p>
<p>Do your cars need repairs or replacing? Do you need home repairs? Are college and retirement taken care of?</p>
<p>I’d put about a year’s worth of living expenses in something relatively liquid like a CD. The rest I’d put in an index fund.</p>
<p>50K is a nice inheritance,but not life changing…As others noted, how are you set for college costs,retirement etc…i think i would go on a great vacation, then invest the remaining money, according to your risk tolerance</p>
<p>I would invest in a trip around the world. Gain some real world life experiences, memories that last a lifetime, intangibles. What good is a CD going to do you, or an index fund? Those are just some electronic blips stored in a corporate computer.</p>
<p>I always laugh when I see the term ‘risk tolerance’…Who among us wants to LOSE money! I realize you must take chances to invest, but I’d feel very bad if I lost this money that was so graciously passed on to me. </p>
<p>No more college tuition for us, retirement is fairly set, although one can never be too sure of that! I’m thinking I’ll just hang on to the money (or most of it) until I decide what to spend it on. I’d hate to just put it under my mattress–almost the equivalent to CDs/savings accounts these days!</p>
<p>The trip around the world sounds like a great idea! That’ll have to wait, though…</p>
<p>Can you reduce your tax bill for this year by increasing contributions to your retirement account, and offsetting that income with this inheritance? Also… you have probably already looked at this, but do you have any tax you have to pay on this at the state level? That varies by state and your relationship to the deceased… so take that into account if you haven’t.</p>
<p>I’d split the money up into 3 pots–add to rainy day fund, spend now on something fun, and investments. How you decided to split the money is something that would be up to you. But by the time you split the money into three pots, there isn’t THAT much money in any one pot…</p>
<p>For the investment pot, I’d consider SPLV, an ETF (S&P 500 Low Volatility Portfolio). I read about it in a Barron’s article about a financial advisor whose clients have $30 Million+ invested with him. He uses SPLV as one of the core holdings for his clients.</p>
<p>[PowerShares</a> Exchange-Traded Funds | S&P 500 Low Volatility Portfolio | SPLV](<a href=“http://www.invescopowershares.com/products/overview.aspx?ticker=SPLV]PowerShares”>http://www.invescopowershares.com/products/overview.aspx?ticker=SPLV)</p>
<p>What’s the rental market in your area like? Have you considered buying real estate, if you can pencil it out & see whether $50K will be enough so that you can put down a significant down payment & the rental will more than offset the mortgage/loan? </p>
<p>Agree that adding to retirement funds is a nice thing as well, as well as some money, “just for fun.” The fun money could go toward a trip, tickets to some splurge you & spouse have always wanted, or whatever. Personally, I wouldn’t spend it in on a vehicle, but that’s jsut me.</p>
<p>risk tolerance just means are you OK with the value going up and down and if it goes down you don’t bail out immediately. </p>
<p>I like the idea of 3 buckets. I received a very modest inheritance from my grandfather and it put me over the edge to buy the SubZero fridge I really wanted but was having a hard time justifying spending that much on a fridge. It seemed like a sign to buy it, so I did and have been quite happy with it.</p>
<p>risk tolerance just means are you OK with the value going up and down and if it goes down you don’t bail out immediately. </p>
<p>I like the idea of 3 buckets. I received a very modest inheritance from my grandfather and it put me over the edge to buy the SubZero fridge I really wanted but was having a hard time justifying spending that much on a fridge. It seemed like a sign to buy it, so I did and have been quite happy with it.</p>
<p>Probably think about your grandfather when you open that fridge, nj2001mom. I bought an iPad with a little money a family gave me after their mother died. I can’t think of anything that I’ve used more!</p>
<p>Have seen vehicles with paint/decals honoring a deceased loved one (often a child or young adult but sometimes someone older), saying for example, “In loving memory of our daughter Pebbles Flintstone, 1001-1002,” or similar. I always thought that was an unusual way to pay tribute but D feels it is perfectly normal for such people, as it’s probably their most valuable asset.</p>
<p>Buying something you want but were “on the fence” about is a nice idea for some of the $$. :)</p>
<p>Vintage watches.</p>
<p>The part that is classified as Emergency Fund (in case a job disappears) would go into laddered 12 month CDs with one maturing each month of the year.</p>
<p>The part that is classified as Life Happens (for the next car/home/funeral trip/etc. emergency) goes into a high interest Money Market or Savings Account that is immediately accessible.</p>
<p>The part that is for whatever fun thing you decide to treat yourself with gets spent now.</p>
<p>Not a fan of emergency funds, returns are zero…and for the most part, that type of emergency doesn’t happen…better off with a HELOC to protect you in the unlikley event of a true emergency.i like “Life Happens” fund, becuase this is where unexpected costs should be paid from, ie roof leak,minor car expenses…</p>
<p>How about a gold or platinum eagle? Or both?</p>
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<p>I highly disagree that minor car expense repairs should be paid from a HELOC. You should have enough cash available to pay for minor car repairs without needing to dip into a HELOC.</p>
<p>However, HELOCs are good options for genuine emergencies.</p>