Note:
-Yes, I know that Reddit is no replacement for an actual financial advisor, etc. I will go to one in due time, my post here is more to get a general idea.
-I won't make any major decisions for at least a half year, just so I'm not acting on the "heat of the moment."
Background:
-I am the only child (in my early thirties) of my (long divorced) mother, who passed away a few weeks ago. She was in her early 50s. She herself has no siblings, and the entire estate is willed to me (and I am the sole beneficiary of her 401K--my [estranged from us] father was never on it). My mother saved every penny, whereas I am not as good with money (I don't have any debts or anything, I just don't save money very well). The feeling of immense loss aside, I am terrified that I will do something stupid with the money. I am a grad student and I live with my spouse in Europe. We are financially comfortable even without my mother's money. My finances have been combined with my spouse's for years, but we both agreed that the inherited assets should be in my name only. My spouse and I are both US citizens and solely US citizens. Same goes for my mother.
Estate:
-The house I grew up in America (value = ~175,000). Would need about 20K in renovation if I want to sell/rent it. There is an emotional attachment but we don't see ourselves moving back to the US (or if we do, then not my hometown). I'm leaning towards renovating and renting it out, and maybe putting some of the most sentimental items I can't let go of into a storage unit, paid for by part of the rental money (A storage unit would cost 150 a month. Our European apartment is too small to ship everything over).
-Bank accounts, which would be about 100,000 - 110,000 dollars after all medical bills, etc are paid
-I bonds- Already matured, 15,000 dollars.
-401K: 500,000 dollars. I am the sole beneficiary. It's all in the form of bonds.
-Life Insurance: 110,000.
Options:
I know my weaknesses: I think grand and squander/spend money easily. I want the inheritance to give us some security and flexibility. I will give myself some luxury with it (e.g. A few grand on a trip somewhere) but it's important that I set up a system and a proper portfolio with it.
What do you guys think about the following ideas? (They are not all mutually exclusive)
- Set up 30-40K in a rainy day fund.
- Between the house and a 1-2 additional acquired properties (I wouldn't put more than 300K into new property(-ies), and would obviously wait and gauge the markets, especially as there is a bubble now), I would generate passive income via renting so that I could, in a few years, work only 4 days a week. This would be critical if we decide to have kids, since I'm a huge proponent of work-life balance. The passive income could be used my retirement income in the future as well? I'm also considering investing in property in places besides America, though I realize that that complicates things.
- Renovate and sell the house.
- Take the lion's share of the inheritance and put it into my own retirement fund.
- This is far down the road (years) since I admit that this is maybe grandiose and over the top, but at one point I would like to put 500-1000 a side a month to fund a small math tutoring school in the rural village in the Asian country where my mother's family comes from. My mother was extremely talented in math, which led to her successful career, so this seems like a fitting way to honor her memory.
- Set up a system where a few hundred dollars a month are sent to my grandmother in that aforementioned village.
Submitted February 25, 2019 at 06:41AM by myvntdtslx https://ift.tt/2GXqGyF
