Today I found out I inherited $1,200,000

You also need earned income to contribute to hear accounts. Depending on your income and if you have a retirement plan at work, you may not be eligible for certain contributions either.

At your age, assuming you've always worked, you probably have quite a bit saved yourself. I would not pay anybody a penny to manage your money. You could buy the Gone Fishin Portfolio book and follow that. You could put it all in SMTFX and earn 4% tax free. Whatever you do, reinvest dividends and live off your current income. Don't touch this money for anything. In 15-20 years you'll retire comfortably with no financial worries.

Forget these financial planner idiots. Get the money out the bank and hide it in your walls, safes, underground, etc. Dump the chick, go travel the entire fvcking world for a decade or so. Come back home, get a ferrari and wreck it. Go travel again

Oh I screwed up, I meant to say get a *used* ferrari. Mid 90's 355 preferrably.

Pics of the gf?

jan van eyck wrote:

go find a certified financial planner. Interview several.

make it clear that you will pay no more than $1000 for a financial plan and you will pay fees of 0.8% per year maximum, including fund fees.

What a stupid idea.

Keep the money for yourself.

You're not wealthy

Do 1 or 2 "fun" things you've wanted to do. Save and wisely invest the rest.

LetsRun board misses troll attempt on the Live-In wants marriage issue-- You guys are slipping.

What is likely is that the OP inherited an IRA valued at $1.2 million where he has to take at least minimum distributions from it each year. In that situation it creates a good, but awkward, situation. A minimum distribution at his age for that amount is about $35k/year. That is income he has to report as taxable income on his return. That means that any earned income he makes from working is taxed on top of that. That quickly can put him in the 25% bracket or higher depending on his other income. If you count FICA taxes and state taxes, then he can be taxed 40-50% on all his wage income. Uncle Sam doesn't exactly motivate him to work hard in that situation. He can find other deductions of course. Just saying that if he doesn't do some tax planning, that is what kind of taxes he is facing with his earned income. Again, that is just if he takes minimum distributions from an IRA. The upside is that all the money that stays in the IRA can continue to earn returns tax free. So he can just put it in a safe, diverse portfolio that aims for just 4%/year avg returns. That keeps his principle reasonably safe but it churns out earnings for his distributions.

Of course I'm just assuming its a IRA rolled over from a 401K when his dad retired. If all that $1.2 million is just inherited cash not attached to any retirement account, then forget everything I said above.

There is some good advice here, but in the end, this is all on you and not a financial planner. You can hire whoever you want, but out can't outsource the responsibility for growing this money.

Here is what I would recommend.

1) Put the money in cash (or short-term government) bonds for six months and use the time to educate yourself on finance and investments. Do not make any decisions until you feel comfortable you know enough to proceed.

2) Read the following books so that you can converse intelligently with potential financial planners and investment managers:

...a) Stocks for the Long Run - Jeremy Siegel (not an easy slog, but essential)

...b) Winning on Wall Street - Martin Zweig (probably an easier place to start)

...c) The Successful Investor - William O’Neil (also a good place to start)

...d) The Indomitable Investor - Steven Sears (for a broad, high-leve perspective)

3) Once you internalize this information, spend some time on the Vanguard web site, focus on ETFs, and give some thought as to how you might do this yourself, if you had the time and interest. (You can do the same with Schwab, Fidelity and TD Ameritrade if you wish.)

4) Ask friends and family for some recommendations for local Registered Investment Advisors and interview them. Talk to at least three. Compare and contrast what they say and how they wish to handle your account. Develop a BS-detector as you do this. Only consider RIAs that are compensated according to a % of assets they manage.

5) Give 25% of your assets to your two favorite RIAs and keep 50% for yourself. Watch and learn from their approach.

6) After one year, decide whether you want to give the additional 50% to one or both RIAs or continue to do it yourself.

7) Always keep reading and always keep learning.

Remember that no matter who you decide will manage your money, ultimately you have to be knowledgeable enough to ask the right questions and know when the answers are not what they should be. You may outsource the day-to-day decision-making regarding your investments, but you still own the responsibility for seeing that your investment objectives are met within the context of your risk tolerance.

By the way, if you have concerns about the girlfriend (and it sounds as if there are at least 1-2 read flags), then make sure you keep your money in an account that has your name only on it and is not co-mingled with any of her money. Depending upon where you live, this should not give here any legal rights to what you have.

Should you decided to get married, then you can consider how you might or might not want to co-mingle assets. If you have second thoughts about co-mingling the money, then you are also probably having second thoughts about the relationship. Solving that problem issue may be more difficult...

Homedog millionaire wrote:

You're not wealthy

Do 1 or 2 "fun" things you've wanted to do. Save and wisely invest the rest.

You can shove it

When I came into some money 3 years ago, I upgraded to a better neighborhood and house. This has turned out to be more important to me than how I invested the rest. My new house appreciates at the same rate as my old house, but is worth much more. It's as if I still have a growing asset value, but am living much better than I ever thought possible for me in my life time.

Sure, it doubled my property tax burden, but it has been totally worth it - life changing, in fact.

Data Point says it perfectly.

You are secure. You can now stop worrying about the basics of life(food, clothing, shelter), assuming you do not lose/waste this wonderful opportunity.

I would encourage you to read widely. Read "Money" magazine and other financial publications, so you can learn more about how to handle this wonderful gift.

That's not really your advice is it? Read Money magazine? Money magazine talks about hot new stocks and trends all the time. This isn't what this person needs. They need to put this money in a conservative growth portfolio and forget it exists.

While you might need someone to help you navigate your tax situation, do not pay anyone to help you invest it. Go read Bogle's Common Sense Investing book and put your money into index funds. The amount you will save in the long run compared to using a financial advisor and regular mutual funds is staggering.

Invest in real-estate. Here you could buy 8 houses with that kind of money. Then you rent them out and have a stable income of over $8000/month (over 96 grand a year) for the rest of your life.

$1.2M doesn't make you rich