[USER]

Hello! Interested in people’s advice. What would you do if you inherited a little over half a million dollars? For context, my husband and I are in our late 20s, we bought a house with 20% down on a 30 year mortgage with an interest rate of 6%. No car payments.

No student loans.

We both work full time and make around $170,000 annually combined. We both invest 6% with a company match in our 401k. Both max out our Roth IRA.

We have around $40,000 saved of our own money.

There’s about $30,000 in cash, $700,000 in a stock account (not sure which kind yet), and a house that is worth around $200,000.

Neither of us have ever seen this kind of money before, and we’re honestly just scared to touch it (our plan right now is to not spend a dime until we figure out exactly what we want to do).

We plan on also consulting a financial advisor.

Thanks!

[Jenny]

You are at the beginning of your journey. Keep the inheritance in a separate account, do not mingle with martial assets; invest it into a brokerage account, buy S&P index funds and chill.

[Maria]

Check your state about what happens to inheritance in case of divorce and make sure you understand the consequences, even if there are no issues right now.

Also, I wouldn’t rush anything.

Get a fee-based advisor and make a long-term plan.

[Lori]

I’d make sure I have 6 months of expenses in an emergency fund I a HYSA. I’d max out both the 401ks, throw a little to the mortgage, make any house repairs, and invest the rest for my future.

I’d keep living like I was – you guys are doing great. No debt!!

Maybe rent out the new house or sell it and invest the profits.

I’d take a nice trip though, and I’d create a nice little memorial at your home for the lovely person who left you this life-changing gift. (Framed photo, mementoes)

[Amar]

Personally you have investments already, for peace of mind I’d throw a huge amount toward paying off your house.

Thats a guarantee 6% ROI ok your money.

After that you can invest in the markets all you want

[Andrew]

This is a great “problem.” I’d pay off your primary home which is a guaranteed 6% return due to your mortgage rate, something in these uncertain times is a slam dunk.

I’d invest the rest in a mix of VTSAX (or similar) and maybe 25-30% of VTIAX (international).

Or consider a combo of investing in aforementioned index funds and buying a rental property with cash.

You’re young and have time to be aggressive, especially if you eliminate your mortgage.

[Sarah]

Pay off mortgage. That’s a guaranteed savings of 6%.

[Author]

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