Question: Hello Luise: I am about to inherit about $65,000. I have never had a large sum of money before in my life. Right now, I am unemployed, living on the last of my small savings and my standard of living is pretty basic. I expect to be returning to work soon. To tell the truth, I honestly don’t know what to do with it. I can spend about ten times that much when I just sit and think about it, and everyone I know wants to give me advice and “hot tips”. This is pretty much the proverbial once-in-a-lifetime thing. What would you do? Bruce
Answer: Dear Bruce: Nothing. I would immediately do absolutely nothing except to put it away in an interest-bearing account. In addition, I would not change my standard of living now, or in the foreseeable future. I would actually do pretty much what you are doing, and that’s to look very carefully at all of my options. I would look first at my habits. Some of us can’t seem to have cash on hand because we just go through it. Others of us don’t have a clue about investing or who to trust in that field. I would look at how my own skills might grow that sum. It would be wise to use your own, proven know-how if that was practical. For instance, if you were a carpenter the idea of starting a small side-business in your spare time, like building quality storage sheds, might work well. And I wouldn’t quit my “day job”.
I have a friend who had the luck to come into some money, as you have. She also knew she was an impulse spender. So, she bought a duplex, and lived in one side while letting her renter make the lion’s share of her payments. That worked so well for her, that in several years, she was able to buy a little house, keep the duplex and have two renters. The total she takes in, monthly, is paying off the duplex and a portion of her house payment. What’s important in this situation is your aptitude, your interests, and your goals. Take your time and make this once-in-a-lifetime bonanza the starting gun for a great future. Blessings, Luise