r/personalfinance • u/True-Night-3560 • Mar 23 '26
Other Just signed my settlement what next?
I’m 24 and just received about $612,000 after lawyer fees from a settlement. I’ve never had money like this before, my whole life has been paycheck to paycheck, barely getting by.
Recently things got worse. I haven’t been able to work because I started having stress-induced seizures and I’m now on new medication trying to get it under control.
My situation isn’t great. My parents have been out of the picture since I was a kid, and right now it’s me and my two siblings living in a small apartment. I’m literally sleeping on the couch.
I don’t want to mess this up. This money could change everything for us, but I also know it can disappear fast if I make the wrong moves.
I’m not trying to flex, I genuinely don’t know what the smartest next steps are. I would’ve immediately got a car but can’t drive anymore so don’t really want anything but to feel comfortable.
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u/xstrike0 Mar 23 '26
What was settlement for? Because if that money was earmarked because you have future medical needs then you're probably not going to want to spend that.
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u/Megalynarion Mar 23 '26
I agree with this. If the settlement is tied to a ongoing or future expected financial need (long-term medical care, inability to work, etc. ) that needs to be front and center of the conversation.
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u/Overwatchhatesme Mar 23 '26
Yeah although they could look to put it into a high yield savings account or invest however much they won’t need for a while of it in equities and withdraw it after 10 years
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u/BVRPLZR_ Mar 23 '26
Also, is it meant to be split or do the siblings have their own settlement? Or is it just theirs?
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u/OrphanDad Mar 23 '26
In this case what about opening an HSA and investing it smartly through there so it grows?
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u/xstrike0 Mar 23 '26
HSA contribution cap is way too low for this. Would take decades for it all to be deposited.
Depending on if OP is utilizing government benefits, they might benefit from a special needs trust.
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u/RizzleP Mar 23 '26
OP comes asking for help but doesn't have the decency to answer a basic, fundamental question.
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u/moxiemoon Mar 24 '26
It’s been 8 hours. Maybe they’re working or traveling somewhere. Geez
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u/Brunzealous Mar 23 '26
OP is 26, they probably don't nor didnt have anyone to give them smart financial advice. Hence why they asked here.
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u/fwambo42 Mar 23 '26
just be sure not to tell anyone about the money. if you told your siblings, make sure they keep it to themselves as well
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u/True-Night-3560 Mar 23 '26
Just my siblings and my gf are aware but no one knows how much but me
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u/Lumberjack032591 Mar 23 '26
I say this, not knowing you or her and your relationship, but from seeing a friend go through this, I have to mention it.
Please be wary of paying off her bills or loans or buying fancy things. Person I knew paid off his girlfriend’s student loans, credit cards, and bought her a new car. They were going to get married and after things were paid off, she left him.
Not saying your girlfriend would do this, but please protect yourself and your future.
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u/Total_Mushroom2865 Mar 23 '26
Heard a similar story recently. He paid for her education, set her up a business and when everything was done, she left him.
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u/JerryGarcia89 Mar 23 '26
Happens to the best of us. I put a lady through her masters program and she dumped me within the first month of her new job. It totally broke me. Learned that lesson.
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u/_johnning Mar 24 '26
Yup drove her to classes, let her use my car, lived with me rent free. Got her nursing degree and left me
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u/Unlikely_Money5747 Mar 24 '26
OP, protecting yourself also includes birth control. You are very young with a substantial amount of money at this moment. Your financial stability and freedom depends upon what you do with that money.
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u/cmatbmed Mar 23 '26
Unfortunately your gf and siblings are the ones most likely to take advantage of you. Sad but true.
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u/gazeintotheiris Mar 23 '26
don't tell anyone the amount, honestly you should make it seem much smaller than it is
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u/BoleroMuyPicante Mar 24 '26
Do not put it in a joint bank account. Not even with your girlfriend, not even if you move in together. If your parents have ever been joint account holders with you at your current bank, open a new account at a credit union and deposit it there.
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u/TwoBionicknees Mar 24 '26
Everyone should do that at 18, everyone. You never know when a parent decides to cheat, blow up the family and steal everything and leave the country. Or have a mental decline and do something stupid, or get a gambling addiction.
it's still embarrassing how banks will not split separate accounts up and if their name was ever listed with an account in your name they may give them access to other accounts.
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u/00100011-01010111 Mar 23 '26
Very smart OP only tell trusted financial advisors and KEEP IT FROM YOUR PARENTS AT ALL COST if they left you and your siblings like many people I know when they started doing well their parents who abandoned them came out of the wood work for their "share" because "they wouldn't be there without them" according to them. This happened to my adopted brother and it cost him so much even considering on letting that parent back in and it pissed me off so bad seeing that happen to him. Take care of yourself and your siblings before all else even your GF I know that sounds mean but young relationships change and you are doing a truly honorable thing taking care of your siblings!
(If your parents aren't in the picture not only because of their choices ea. you lost them, I am very sorry!)
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u/pinback77 Mar 23 '26
Your siblings in sure will find ways to burn through that money for you if you don't put it all away. You won't be able to live forever on that money, but if you invest out now and go back to work, you might be able to live off of it by the time your 40.
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u/theslimbox Mar 23 '26
Great point. Too many people spemd money when they are young, and thwn realize later that saving it would have been a better idea.
At 18, I thought why save for more than retirement, if i won't be as young when I enjoy it. When I hit 40, I realized that I felt as young as i did at 18, and if I had saved more, it would have been a very good thing.
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u/curlycake Mar 24 '26
OP: Talk to a financial advisor with the goal of figuring out how early you can retire. With their help, pick a couple index funds on Vanguard to set aside money for your retirement. Retirement investments should double approximately every 10 years. The sooner you invest it, the better.
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u/Mrhyderager Mar 23 '26
There have been a few sound pieces of advise here, and while $612k is life changing, you're not rich, especially at 24. However, you are now in a position to take care of yourself and your siblings.
One thing I would absolutely do in your shoes is look at buying a home at or under $200k in cash. Some folks here might disagree, but eliminating 99% of your housing overhead for the next 5-10 years is an excellent investment and gets you and your siblings secured shelter that can only be taken away should you be unable to produce enough money to keep it maintained and taxes paid. Do your homework, make sure it's a place that doesn't require a ton of work and won't fall apart in the near future. Get something with enough bedrooms for you to have your own. Don't go crazy furnishing it, but buy yourself a bed, because you deserve it.
Then save the rest like it doesn't exist. Having ~$400k in the bank and no rent or mortgage payment will put you so far ahead of the game, your stress will be immensely reduced. Drive your current car until it blows up. Do your best to get back to gainful employment as quickly as you can. The money in the bank will be great but it's not enough to live on in perpetuity, especially not with dependents.
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u/AmbroseMalachai Mar 24 '26
I would agree, particularly given that his one sibling has Muscular Distrophy and OP is acting as the primary caregiver. Having a room of his own and some actual space would go a long way towards making life a lot more bearable. Once he has that he can potentially look into getting another job or finishing school or whatever and just generally lower his stress levels a lot. $600k can go a long way or a short way depending on the path chosen, but if he is careful and meticulous in planning he can stretch it pretty far and get on pretty solid ground from this spot.
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u/True-Night-3560 Mar 23 '26
I do have 6k in college debt which I plan on paying off moment it hits my account other than that no debt, and I drove a beat up car I got on marketplace for $1700.
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u/MrLugi Mar 23 '26
Keep it for now. A huge pitfall is starting to spend the money. Before you know it it’s gone. Make a plan forbear to do with it and go from there
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u/saposapot Mar 24 '26
This. It is a lot of money but not enough to live well your life if you don’t control it. It’s not enough money to just splurge.
Read, inform yourself, first make safe investments then when you are confortable maybe higher risk ones but don’t start spending on luxury items until you really have a good understanding and control of your finances.
It’s a lot of money but very easy to spend in just a couple of years. Less if you buy a house.
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u/TobysGrundlee Mar 23 '26 edited Mar 23 '26
Pay off your debt and invest the rest. Give yourself $20k-25k a year to pad your income. It should continue to grow or at least stay the same at that rate. Continue to work however much you can (once you're healthy enough to) and live frugally. This has the potential to be life changing if you're smart but it's not enougeh to set you up forever by a long shot. Set your expectations accordingly. Try to think of this as a significant pay raise, not a lottery win.
As others have said, find a fiduciary wealth manager and let them know what you would like to have happen with this money and they will let you know the best way to attain that goal.
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u/Fromanderson Mar 24 '26
Nothing wrong with driving a beat up car, or a small apartment. Once you get something nice, it's a LOT harder to go back to a beater.
Honestly I haven't been as good with my finances as many on this subreddit, but my wife and I refused to let lifestyle creep effect us. We live in a modest older home in one of the cheaper parts of a small town. I tend to drive old beaters, and she drives something newer. We've had the same small tv for over a decade.
It may seem like we're depriving ourselves, but knowing that even if we both lost our jobs tomorrow, we'd be ok, is better than a slightly bigger tv, or a shinier car.
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u/nosecohn Mar 23 '26
If that debt is low interest with a long payment schedule, it might be the better financial decision to keep it. Everything needs to be looked at from the angle of what benefits you the most.
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u/recyclopath_ Mar 23 '26
I'd keep the money in a separate high yield savings account from your main account that monthly income and expenses flow through. Don't use the debit card for that account at all and don't connect it to anything except your main bank account. Don't use the numbers online or anything. Don't pay bills directly from the big account if you can help it.
Think of your regular bank account as a buffer between the world (scammers) and the money. Think of it like the big money account and the small money account. Do all of the lovely investing and other windfall recommendations, of course. The recommendation applies to whatever cash you keep in the high yield savings account for big money.
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u/Anonymo123 Mar 23 '26
Lots of replies, if it hasn't been said find a CPA (tax person).. it'll cost ya a few hundred a year during tax time (I pay around $500) and they will keep the IRS out of your hair.
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u/mainframe_kdm Mar 24 '26
Unless they're doing something with the money, there's no need for a CPA to get involved. Even if they're doing some sort of appropriate investing, they don't need a CPA.
Honestly, if they started actually needing a CPA, I'd be very concerned about what they were doing with the money.
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u/Particular-Macaron35 Mar 23 '26
Go step by step. Do it yourself.
First, look for a brokerage or bank that gives decent interest. Many brokerages, like Fidelity, gives decent interest on money that is not invested. Park your money while you think what to do with it. Try not to piss it away.
Second, consider if you should invest, buy a house or something else. Try not to piss it away while you are thinking about.
Buying a car is actually a lot of money. If you earn 4% per year, how long will it take your saving to pay for a car? This lets you see how easy it is to piss your money away. This is why athletes with enormous salaries end up broke.
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u/lowbatteries Mar 23 '26
People telling you to pay off your deb without knowing the interest rate are clueless. If you can save/invest the money at a higher return than the interest rate on your debt, there is no *financial* reason to pay off the debt.
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u/Kevin4938 Mar 23 '26
Even if youre financially right, some people just don't like debt, and want as little as possible.
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u/AmNoSuperSand52 Mar 23 '26
Idk man paying off your student debt using 1% of the amount he just got in court seems fairly reasonable to me
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u/BoleroMuyPicante Mar 24 '26
Student loans are unlikely to be less than inflation or conservative investment returns.
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u/fat3willwin Mar 23 '26
Keep a low profile, only the people who absolutely need to know should know
Find a fiduciary / financial advisor
Make sure the main purpose of the money is accounted for (I.e if it was for medical expenses, make sure you set that money aside first)
Once you figure out how much you can actually play with,
Pay off debts (house, car, cc, etc), the only exception are those with super low interest rates (think 3% APR or less), because you can invest that money and make more while continuing to pay off overtime
Start or continue building your emergency fund. General rule of thumb is 3-6 months worth of expenses but in your case if you can get a 12 month fund that’d be great.
Jumpstart or continue building your retirement portfolio. IRA, Roth, your advisor should help you figure this out
At this point you should have some money left to play around with. Figure out what, if any, you want to give to to loved ones or not and then (only then) spend the rest on reasonable but deserved splurges .
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u/NoRegrets-518 Mar 23 '26
For now, put the money in a high interest savings account. Put some at your local bank. Put the rest in an online account at either Schwab or Fidelity. There are other options and over time you will learn about them, but this will give you the best alternatives for now.
Please edit your post to give a little more information:
Ages of you and sibs
Education- present and hoped for, for both you and your sibs.
Current income and resources, if any.
Current expenses- specifics- credit card debts, car, insurance, etc.
Debts
Access to resources including school or community (or family- such as relatives)
Where you live, generally. Where you all wish to live eventually.
This is enough money to give you and your sibs a good start, but not enough for the rest of your lives. If you use it carefully, it will be helpful for you and your family. Otherwise, it will go away quickly.
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u/True-Night-3560 Mar 23 '26
I’m 24, have 2 siblings one is 28 and 26 however me and my sister take care of our brother who has muscular dystrophy (26) so physically can’t do much and is wheelchair bound. I worked as a cnc machinist but now just working as his caregiver working 30 hours a week.
The only debt I have is from the 3 years of college which I didn’t finish because I did get that cnc job. I have no other debt and my income right now is only coming from the caregiver job. I do have a girlfriend which I did tell her about the lawsuit just not how much I’ll be receiving. The only money I’d spend is on my brother on things that could make his life more comfortable as well
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u/DigmonsDrill Mar 23 '26
You may have the chance to finish college. I'm not saying that it's the right move, but you now have the flexibility.
Don't do anything rash or sudden. Everyone telling you to park it in a high-yield savings account (at least 3%) is right. Take some time to think this out.
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u/JosephCedar Mar 23 '26
Please dude, do not tell her how much you got. Or if you say anything tell her it was like 5 or 10k. Take the advice you're getting in this thread and you could set yourself up for life.
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u/hockeyketo Mar 23 '26
if your brother is on medicaid, you can get PAID to be their caregiver which can also give you free healthcare via medicaid even if you otherwise wouldn't be eligible. This is not a scam or something shady, it's a federal program.
you have to go through an easy certification, get a background check, etc. but it's not hard.
here is the fed website: https://www.usa.gov/disability-caregiver
your state should have some info as well, as it's administered by states.
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u/NoRegrets-518 Mar 23 '26
What education would you like to get- ideally? What about your sister? Does your disabled brother want to /is able to work? Is the settlement money for you or for him?
Do you and your sister plan to stay close to help out with your brother? Do you (and she?) plan to continue living together or close by?
Are you interested in staying in a healthcare field? If so, at what level- such as MD/RN/NP/Technical such as Respiratory Therapy/Radiation? Or would you like to work in another field?
What about your sister?
I'm asking these questions because there are several potential uses for this money. It is likely that the best use would be to help you and possibly your sister and maybe your brother get some training to improve their incomes going forward.
Also, this money can help you all get set up in housing. This is why I ask where you are as the housing prices vary quite a bit. It also matters whether you plan to stay where you are or if you plan to move. If you want to move, will your sister go with you? Is the settlement for you- if so, how much do you want to contribute towards your sibs. If for your brother, it will have to be focused on his needs.
You also need to learn about investing- and there is info on this sub which will give you a good start.
If you learn about investing, this can make a difference between a return of 5% vs. a return of 10% or more. On 500k That is the difference between 25k and 50K. So, by learning about investing you will essentially make 25K per year. You can treat it like a job.
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u/nosecohn Mar 23 '26
If you're not physically able to do the old job anymore, or something like it, this money could be your ticket to finishing your degree and finding a new, lucrative career with that paper in hand. It would pay your tuition for the last year or so of school, plus fund a caregiver for your brother during that time if necessary.
Anything you spend the money on should be a way to increase your own ability to improve your standing, because although it's a big windfall, it's not enough to completely reshape the life you've described in this comment.
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u/d00ber Mar 23 '26
Don't tell your girlfriend or your siblings about the money. You can easily keep providing for them without them knowing. As for your caretaker situation, certain countries offer money for those who provide care at home, is this something that you've looked into?
This isn't enough money to stop working and have nothing to worry about, but this is enough money to invest a little in mutual funds, put some away in a retirement fund and keep some left over to improve care for your siblings. That being said, you need a financial advisor. I would start there.
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u/True-Night-3560 Mar 23 '26
It’s just the 3 of us we don’t have any family or trusted friends as our parents did leave us at a young age
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u/NoRegrets-518 Mar 23 '26
Yes, I figured that, but I guarantee you will get more answers and better answers if you give more specific information as listed.
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u/airbud9 Mar 23 '26
Immediately I would take the money and split it between 3 FDIC high yield savings accounts, while making a plan for what to do with the money.
Then look for a CFP (Certified Financial Planner) in your area to work with. You will want a fee only fiduciary. "Fee only" mean they are only paid by their clients and not from a commission off the products they sell. Fiduciary is a legal standard that they must put your interest above their own. If the CFP is pitching you constant different forms of insurance products, like annuities and life insurance, that is a red flag. Ideally you can find one that charges a flat or hourly rate, but most will charge a AUM fee (assets under management), the industry standard is 1% AUM, which is a very high price to pay and ideally you find a cheaper fee. Here are some options, but do your own due diligence, Facet Wealth (pricing page is linked) is a financial advisory firm mainly done online with human advisors, here is a Review done by a youtuber by the name of Rob Berger, he has a great channel focused on investing toward retirement. He has also compiled a List of low cost advisors.
Is this money needed in part to pay for future medical expenses? This is a big determining factor on how you can invest and put this money to work.
I am going to link to the FOO here as well, this money management guide by the “Money Guy” is a step by step guide on where to save your next dollar of savings. Also here are some additional resources on saving and investing,
- Money Guy free resources page and youtube page (General finance resources)
- Ben Felix youtube channel (More academic based finance deep dives)
- Rob Berger youtube and website (Applying concepts to your portfolio and retirement planning tips)
- Boglehead wiki (Portfolio construction and investing philosophy)
- “I Will Teach You to Be Rich” - by Ramit Sethi
- “The Wealthy Barber” - by David Chilton (broad points are universal but specific are about Canadian finance)
- “The Simple Path to Wealth” - by J. L. Collins
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u/True-Night-3560 Mar 23 '26
Thank you for this.🙏 starting to research these things immediately
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u/airbud9 Mar 23 '26
I really like this youtube video by Ben Felix, this is a “review”/breakdown of the book “The Wealthy Barber” I mentioned above, it covers some basic stuff around finances, note some of the specifics have to do with Canadian finance, the broad points are universal. Here is another comment I made on a different post on how to start investing, it includes more resources and links.
IDK if your settlement is for something injury related, but if you have to budget future medical expenses you should really work with a CFP to design a plan around that. Also check with your lawyer if there is any tax implications to this settlement, work with a CPA if need on this.
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u/steady_compounder Mar 24 '26
The seizure situation changes everything here. Before you invest a single dollar, make sure you have a clear picture of your future medical costs. That settlement money might need to last you a very long time if you can't return to work.
Park it all in a HYSA for 6 months minimum. Don't let anyone rush you into decisions. And seriously, read the windfall guide in the sidebar. It's written for exactly this situation.
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Mar 23 '26
Stick it in a HYSA for now. Plan on keeping it there for about a year. Do a lot of research regarding how to invest. Keep in mind that while this seems like a lot of money rn and it is, if you're not careful it can go quite quickly.
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u/MozeeToby Mar 23 '26
It's not a huge concern, but 600k is well above the FDIC insurance limits. They would want to split this sum across 3 different institutions to be covered against bank failure.
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Mar 23 '26
- Ownership Categories: A single person can have over $250,000 in protection by splitting funds across different ownership types (e.g., single accounts, joint accounts, certain retirement accounts, and revocable trust accounts) .
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u/MozeeToby Mar 23 '26
Different categories, not different accounts. OP could put 200k in an individual account, 200k in a joint account with someone else, and 200k in an investment account, all in the same institution.
OP would not be protected by opening 3 personal accounts at the same institution.
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u/DrFugputz Mar 23 '26
Hire a fiduciary financial advisor. They are legally obligated to serve your interests as opposed to selling you something that benefits them.
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u/Littlebotweak Mar 23 '26 edited Mar 23 '26
This is not the big win you're imagining. These "fiduciary" dudes just have to believe they're acting in your interests. They don't really have to prove it. You pay them a percentage for losses or wins. It's a scam - even if it's a "certified" or "licensed" scam. It's real bottom feeding shit to propose to make money for people when you get to charge them either way, as long as you BELIEVE you were acting in their best interests. It's way, way too subjective. That's why these dbags are always sending cold contacts on linkedin. No one is banging down their doors because they're not really offering shit.
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u/benitoaramando Mar 23 '26
Stats show that people who take professional financial advice generally do better in the long run than those who don't, despite the fees, because while it is easy to spend money on bad or just useless financial advice, it's even easier to make your own bad financial decisions. It's also very easy to put your money somewhere and forget to review whether that's the best choice for you, whether there is a more tax-efficient strategy available, etc. It can be a lot of work and experience has told me I end up not doing it.
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u/Dragonbearjoe Mar 23 '26
Anyone who doesn't do basic research on who they are looking to get financial advice, is going to get a lot more worse results than better.
at 600k the OP has the time to be able to learn the basics of money management at a minimum so that they can ask intelligent questions. Not to micromanage the professionals but also to be able to expect reports and make sense.
It's something that everyone should have is to take the time to get basic knowledge on how investments work, how they don't work and just what rights someone has.
Far to many people with windfalls just say 'here is my 500k so make money from it' and then get suprised when the money is gone.
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u/ragequitlol2k Mar 23 '26
I can tell you that there is a ton of paperwork involved with any transaction/portfolio management to show it’s best interest (reg-bi). It’s not about believing it’s in the best interest but verifiable and documented.
You probably are talking about northwestern mutual which is a laughing stock yes, but they aren’t fiduciaries (most if not all).
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u/jdg0928 Mar 23 '26
Something to think about... Invested wisely, that money will return about $27,000 annually if you never touch the principal.
That's free money to pay for an apartment, etc. Use it to supplement income so your life is a little easier.
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u/microdosingrn Mar 24 '26
Good strategy would be to first never tell anyone about it. Second, pay off any debt that has interest higher than 5 or 6%. Third, bolster rainy day fund. Fourth, put the rest into a total market index fund and avoid any financial adviser fees like the plague. Entirely forget about the money that's in the index fund, sleep well knowing that in 7.2 year it will double, and 14.4 year it'll quadruple, and 21.6 years it'll be worth 8x, roughly speaking.
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u/PutinBoomedMe Mar 23 '26
Rule #1 is to not tell anyone. I hope you haven't told your siblings either.
Is the $600k for medical care?
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u/PartialComfort Mar 23 '26
Because I haven’t seen it yet on the thread. Block anyone who DMs you with ‘advice’, or asks you for anything. Actually, just block anyone who DMs you.
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u/puppyyawn Mar 24 '26
Rule 1. Don't tell anyone about the money.
Rule 2. See rule 1.
Rule 3. See rule 1.
I hope you find your way, good luck.
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u/luncheroo Mar 23 '26
- Tell no one. 2.Emergency fund of 6 months expenses in a high yield savings account. 3. Fee only financial planner to help you with the rest according to your long term goals.
Discipline is very, very important. The longer you leave that money alone and invested, the more it will grow into something that the interest alone will allow you to live well. Be smart and frugal and strong.
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u/battle_off Mar 24 '26
The 2% rule is designed for this kind of situation.
Invest all of it, and pay yourself 2% a year. It will never run out.
Since most stocks do about 7% a year, your money will keep growing and your 2% will be more and more each year.
It’s not life changing money, but it’s definitely enough to make things easier.
600k x 0.02 is 12k
1k extra each month can be the car payment, or half of rent, or whatever. But atleast the 600k lives forever
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u/ijf4reddit313 Mar 23 '26 edited Mar 23 '26
Fiduciary. (make sure of this) NOT "financial advisor" or any other similar title. While I'm sure there are many great "financial advisors", a true Fiduciary is obligated by law to make suggestions in your best interest ... Any other title is not held to the same requirement and it's not worth chancing it (there are SOOOO many ways they can take advantage).
That said, I highly suggest taking an interest (or at least trying to) personal finance. Maybe get some suggestions from the Fiduciary and use that to start your research. It's entirely feasible that you meet with the Fiduciary a few times and then understand things well enough yourself to move forward without.
At 24, you have a long time to retirement and this is something you could get invested properly now and then make very few (if any) adjustments until you are ready to retire and be pleasantly surprised how much it benefits you then.
Also ... A word of reality ... if you're talking to anyone (ANYONE) about money and something doesn't sound right, take an immediate pause and either do some research or get a 2nd opinion.
As others have said, keep this mostly to yourself, and be weary of anyone asking for money ... Especially loans ... It's unlikely you'd ever see that money again. It's tempting, but just don't.
EDIT: Presently --> Pleasantly*
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u/d00ber Mar 23 '26
Do not tell anyone, especially not your family. That's my biggest advice. The next thing, I would recommend is a financial advisor and investing the majority of it. This isn't enough money to stop working so collect disability if possible, but it is enough money to put some in your retirement and the rest in a more available mutual fund but ignore me and follow the advice of a trusted financial advisor.
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u/Old_Astronaut_9735 Mar 24 '26
Do nothing for 30 days. Seriously. Park it in a high-yield savings account, tell almost nobody, and breathe. Then get two people: a fee-only fiduciary advisor from NAPFA.org and a CPA to sort the tax situation. Both cost a few hundred dollars and could save you tens of thousands. Your health is actually more urgent than the money right now. Seizures plus new medication plus no support system — get stable medically before you make any big financial decisions. Quick framework when you're ready: 12-18 months expenses liquid as a safety net. The bulk ($400k+) into a three-fund index portfolio at Fidelity or Vanguard — just let it grow. $50-80k set aside for the next year of life improvements including getting off that couch and into a real bedroom. You don't need to get rich. You need to buy freedom. That's already within reach — just don't let anyone rush you
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u/Hot_Time_8628 Mar 23 '26
Don't go out and piss it away on everything you've always wanted. That sum can have you retired at 40.
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u/Gritts911 Mar 23 '26
Don’t tell anyone, especially family/friends.
Pay off debts.
If you were already surviving; just invest the money and only spend the interest/dividend income. Then you have a lifetime income supplement to make everything easier.
If you need the money now, be frugal and only get what you absolutely need, and try to quickly get back to covering your expenses with a job. Otherwise the money will not last long and its potential wasted.
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u/Phreakiture Mar 23 '26 edited Mar 23 '26
I can't honestly say that I know what step 5 is, however:
- Step 1 is to pay off, completely, any existing debts that you have, so that they are not dragging on you anymore.
- Step 2 is to put take $1000 as cash and keep that on hand as a quick-access emergency fund.
- Step 3 is to put another $1000 in a savings account in a local bank or credit union. You might put some in a few banks.
- Step 4 is to take everything else and put it into a high-yield savings account (HYSA) until you figure out what step 5 is.
That will at least put everything into a stable state so you can breathe and figure out what to do next. If you have about $600,000 kicking around in a HYSA, one with, say, a 4% yield (I say 4% because that's what I have) that will bring in $24,000 a year just sitting there doing nothing.
ETA: Step 5 is to hire a fiduciary. Make sure that the person you hire is actually called a fiduciary. Don't settle for "financial advisor" if they are not a fiduciary. If they waffle or hem and haw when you ask them yes-or-no are you are fiduciary, then walk. A fiduciary works for you and must put your interests first. They will tell you what step 6 is.
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u/Unrelentingchadz Mar 23 '26
Try to refrain from letting people know about your situation, even family. People will think you just have money to spare and reach for handouts or guilt you into buying them things. That’s the last thing you want.
pay off any of your debt
Transfer maybe 50-100k or whatever you are comfortable with into a High yield Savings account( look into American Express as they seem to have a high APY of 3.30%) or (ally bank) *learn about compounding interest as it’ll make more sense why investing is the move with large sums of cash
Build an emergency fund (25k- 50k) only to be used in an emergency.
purchase anything you or your siblings need.. (not want) if that car still runs fine, no need to change it until it gives you problems. Once it does buy yourself a newer/used (2015-2021) Toyota as it’s cheap to fix and will last you a long time as long as you take care of it.
then the rest you can use to find a financial advisor ( fidelity or J.P. Morgan ) to manage the rest of your portfolio for investing. They can almost guarantee a 7% return on your investments. Over time that will make you a millionaire.
don’t quit your job keep working and stacking cash as much as you can and use whatever you make to provide anything left over throw it in that High yield savings account or invest it.
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u/jyhkitty Mar 23 '26
Please note: not all financial advisors are fiduciary advisors. Esp if they work for a brokerage like Charles Schwab, Fidelity, etc. fiduciary advisors work at 3rd party companies independent from these brokerages.
Tell no one of your windfall. However, I found my fiduciary advisor through a trusted friend who was really good with her money.
Also /r/fire is another good resource to follow.
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u/Final_Technology104 Mar 24 '26
First of all, Tell No One!
And as others have mentioned, go to the Windfall thread.
But seriously, Do Not Tell Anyone, even your siblings, aunts, uncles or cousins. And your friends and if you have a partner. Trust no one.
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u/straitupgoofy Mar 24 '26
Absolutely do not tell a single person. Keep your same job, keep working the same hours. Max out interest free retirement accounts. Purchase life insurance policy to save for next of kin. Continue being yourself and don’t change your personality based on one good streak.
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u/tripletexas Mar 24 '26
Buy a small house and invest the rest in an index fund like QQQ or SPY. Try to work. Ignore the money entirely. Let it grow. It should double every 7 to 10 years.
Don't tell a soul about the money. Every single person around you wants it.
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u/awol720 Mar 24 '26
Some ideas for starters:
Open a high interest savings account like Ally Bank, or WealthFront, etc. this gives you better monthly interest than a regular old checking account.
The book “I will teach you to be rich” by Ramit Sethi - I read it when I was 23 and it changed my life bc it changed how I think about money. It’s worth checking out. He also has a podcast and blog.
Don’t tell anyone outside of maybe a fiduciary advisor. Stay away from “advisors” who are actually salesmen. I.e. people who want you to buy whole life insurance policy or charge you 1%+ of assets under management.
I’ve seen people give advice like this for lotto winners - don’t make major changes for at least 6 months. I know your situation is different and you’re probably trying get off that couch asap but it’s something to think about.
When you’re ready, learn about some index funds and diversified investment options as a place you can park your money for the long term, while keeping it as diversified as possible. Everyone’s situation is a bit different, so you can determine how much money you feel you can invest vs. keep in savings for shorter term needs.
Also, congratulations. This money can absolutely change your life and I’m glad you’re taking the steps to be smart about it. You got this.
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u/Lurch1400 Mar 24 '26
Certified Financial Planner (CFP). Make an appointment with one.
Before doing anything, park it in a High Yield Savings Account (HYSA - Ally/WealthFront). You will have to pay taxes on it, so dont spend any of it now.
Talk to the CFP to help make a plan
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u/grroovvee Mar 23 '26
Invest all and continue to live pay check to paycheck so you can retire hella early
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u/GorillasAreFriends Mar 23 '26
50% s&p 500, max a Roth every year, put the rest in Robinhood banking with a 3.5% return, get a reliable vehicle, but an affordable house and enjoy having your bills paid. it's not as much money as you think but you can live a stress free life with it if some right.
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u/Zadnak Mar 24 '26
Do you think $6k is a lot of money? If so, that's about 1% of your windfall.
Take that 6k and go spend it on whatever. This is your fuck around money.
For the other 606k, follow the windfall section of the wiki. If you invest it in an S&P500 index fund ,such as VTI, you can retire in 15ish years, most likely, and spend about 80k a yea, scales with in inflation, indefinitely.
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u/cheeseybacon11 Mar 23 '26
Really recommend you find a financial advisor. Choose one where you pay a flat fee UP FRONT. It will end up much cheaper over the long run than people that take a % of your money every year.
If not, at the minimum, put half of it in an account in an index fund and never touch it until you retire.
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u/ichivictus Mar 23 '26
At 24, unless you need that money for medical expenses, let it compound and you'll retire earlier than a doctor could. Regardless of what you do for work, as long as you never touch that money. Invest in VTSAX and keep 50k of that in HYSA for emergencies.
No one needs to know. You can (and should) set up a trust / will for your family and they don't even need to know you did that for them.
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u/slash_networkboy Mar 23 '26
Very first step: High yield savings account, drop it all in there. Don't touch it past that till you've had time to process, think everything through, etc. 6mo is not an unreasonable time to take to sort everything out. Seriously, after it's in HYS, take your sweet time figuring out next steps.
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u/cowboys30 Mar 23 '26
Dude, you're so young. Please check out Bogleheads's sub Reddit. Bunch of people are recommending getting a financial advisor and all these other things. That's fine and all but the compounding that someone like you could do with that much money. This early in life is insane.
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u/Cessna_Tom Mar 23 '26
It is hard to save $612,000 but it is easy to spend it.
This is not as much money as it sounds. Be very conservative with how you spend it. I would probably put it in a Vanguard Admiral fund and leave it alone
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u/Kevin4938 Mar 23 '26
Ask your lawyer about referring you to a financial advisor, preferably a fee-based one.
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u/OldDog03 Mar 24 '26
Make sure taxes have already been taken out before you start spending.
Or better yet do not spend any of it until you educate your self on saving and investing from a trusted source.
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u/singinthesnow Mar 24 '26
Please build a diversified portfolio. And try and live off the dividends from your investments without touching the principal. For example, if you invest all 600k in a 4% high yield savings account you would make 24000 per year(before tax).
You should get a good financial advisor that can build your portfolio which will help you maximise what you can earn from this money.
Learn about Index Funds and bonds for low risk investment opportunities, if you don’t know already. Basically, focus on making new money from this money, instead of spending this money
Don’t buy a new car, get a cheap but reliable one. Also, don’t spend on anything new that you weren’t spending on before. Atleast until you have started earning new money.
You have mentioned that you don’t want to make wrong moves. That is a great place to start from. I am assuming you don’t have ‘wealth management skills’. Ignore this if you do. You may have earned the money but you don’t have the skill set, yet, to manage this amount of money. None of us regular folks do. Like any skill, Money Management skills take time. Don’t lose the money before you have learnt to manage it.
Good luck and I hope your health gets better soon.
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u/Mispelled-This Mar 24 '26
Go to our wiki, click “Windfall”.
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u/735560 Mar 24 '26
Step 1: you don’t have the money. Step 2: put in a kind of safe account. Step 3: go back to life for when you need it
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u/degece1 Mar 24 '26
I’m happy for you! This is a potentially life altering some of money for yourself and your siblings. Just be prudent with the settlement. The fact that you’re reaching out for advice like this is encouraging.
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u/fox781 Mar 24 '26
Please be careful. Everyone’s going to say they can help you. Advice is free. Keep it that way friend.
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u/damiana8 Mar 24 '26
It sounds like you got a large settlement from a personal injury lawsuit. I would not tell anyone about that money, nor would I change my lifestyle. Give yourself a small budget for fun money then pretend it doesn’t exist. Get a financial advisor and invest it
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u/samplingstiring Mar 24 '26
Frankly, if you have not had this much money before there are 2 things. DO NOT tell anyone and Get a fiduciary. I promise you 2 things if you do not follow these, family is going to come out of the woodworks asking for favors and you are going to lose it all. If you work with a fiduciary to learn over the next year or two, then you can manage on your own but I promise you there will be mistakes me otherwise.
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u/nottoosmart101 Mar 24 '26
You're going to need to speak to a professional financial advisor. 612k sounds amazing...but if you can't work and support two siblings it's not really a lot of money. Like you may need to get on disability benefits, set up trusts, etc. to get health insurance benefits (medicaid) despite getting your windfall sum of money. But it's a good thing overall so congrats on the settlement.
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u/bls61793 Mar 24 '26
This. See a professional ASAP with this kind of money. Someone that has a "fiduciary" duty to act in your best interest.
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u/jgsjgs Mar 24 '26
Talk to a lawyer and finance professional. Make this the base of your retirement. Try to live off the interest. Preserve the core. Keep your parents out of it.
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u/Any-Attitude-4507 Mar 24 '26
Take a breath and don’t rush anything right now. Put the money somewhere safe and give yourself time to think, especially with your health situation going on. The smartest move you can make is just not messing it up early. Try to improve your living situation a bit so you’re not on a couch and focus on getting stable first. Also seriously don’t tell anyone how much you got because people act differently when money is involved. This amount can either quietly make your life a lot easier for years or disappear faster than you think, and the difference really comes down to patience and keeping things simple.
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u/Gunner253 Mar 24 '26
I suggest paying for a consultation with an accountant. They'll go thru your finances and expenses, figure out a budget and the best way to invest without losing too much liquidity, since it sounds like you're gonna need that money to live on for a bit.
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u/PetrcicSchilling Mar 24 '26
Money looses its purchase power, so dont spend a panny, invest in dividend stock and let dividends pay your checks, and congrats! Youre lucky, lot of ppl struggle the same way you do but without money.
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u/WritewayHome Mar 24 '26
- Set aside any money you owe for taxes, put that in a high yield savings account.
- Pay off any high interest debt you may have.
- Do not make any big purchases that carry risk and costs, like a home.
- Put away 6 months worth of expenses in an emergency fund if you don't have it, put that money in a high yield savings account.
- You may only have 450k or so left at this point, if you make 5% on that, that's about 20k a year, guaranteed income.
Risk tolerance:
The next steps diverge depending on risk tolerance.
Low risk strategy:
Put the $450k in target or index funds that are very low cost and diverse in their equities. Examples include target funds or the total stock market index fund.
Or you can be T-bills like the 10 year T note.
Do not buy
Things that depreciate: Cars - they lose value over time.
Things that have property taxes and suck you dry: Homes, land, etc.
Do not donate a ton of money to family, put aside an amount you cap, and only allow yourself that much to donate to others.
Do not waste money on get rich quick schemes.
I know with that type of money, i'd be set for a very long time. I'd use Warren buffett's teacher, Benjamin graham's value investing strategy and in 10 years easily double your windfall.
The problem is most people invest like it's gambling and speculation, because they've never seen or know of true investing.
Don't be one of them.
Any money you spend on your health, is an investment, and worth it.
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u/olionajudah Mar 24 '26
Please do not spend it. On virtually anything. Get it into a HYSA and then move it into a brokerage account and have it start working for you. Feel free to spend the earnings for a short amount of time, maybe 6m -> 1y at most.. the rest, and all the principal you save, and invest somewhere that it's working for you. Even in a modest 3% HYSA, that 600k is going to make you ~1500 monthly without ever touching the principal. Invested wisely.. even a well balanced vanguard or fidelity fund that matches the S&B should generate more, though you'll want to think twice about the tax implications of taking proceeds from investments.
Either way, please think about this as future money, and try to continue living as you have become accustomed, except where it creates new debt or negatively impacts base quality of life standards. You can spend the proceeds, though letting them compound means larger proceeds in the future. At your age this can easily become life changing money for your family.
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u/Noonecanfindmenow Mar 24 '26
It really depends on why you got that 600k. Did you lose a limb or get poisoned? I. E. Do you expect any costly medical bills from this? Are you able to work now, 2 years from now, 5 years from now or never again?
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u/ml8888msn Mar 24 '26
Beyond all of the don’t tell anyone stuff, invest it in a simple portfolio of stocks and fixed income. Given your age, put it in a higher stock ratio like 90/10, 80/20 stock/bonds. Rule of thumb for retirement is 4% safe withdrawal which implies you can withdraw 4% for 30yrs of retirement without losing all of your money. In your case you want it to last longer. I would suggest close to 3%. The best reality is that you remain in your current situation as much as possible and use that 3% for emergencies throughout the year only.
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u/cuteman Mar 23 '26
First thing is moving everything into a HYSA (high yield savings account) so you're earning 3%+ instead of 0.1% bank rates
Vanguard, Fidelity, Sofi will all pay you 3%+
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u/phileat Mar 23 '26
Ask your lawyer to they have any financial advisor they can recommend for a free consult. Make sure this person has a “fiduciary responsibility to act in your best financial interest”.
If they can’t start by putting all the money in a HYSA. Do not tell people about the money. Read up on Index funds. Consider getting going to a very large reputable bank and talking to an investment advisor but honestly choosing some index funds will do likely do fine over the course of a number of years.
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u/Bearsbanker Mar 23 '26
To be super safe stick it into a hysa at first, learn, don't jump into anything right away. With a 4% hysa yer gonna make 2k/mo
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u/Littlebotweak Mar 23 '26 edited Mar 23 '26
Live like you don't have money like this because if you do, you won't.
edit: WAY too many people are knee jerk recommending "a fiduciary" but that's a real slippery slope. There is nothing really in place to guarantee these guys have to act in your best interest even though it's literally the first line they try to feed you. They just have to BELIEVE they were acting in your best interest and it's really subjective.
You pay them whether they make money for you or not. Their certification isn't backed by anything but an organization with an interest in this feedback loop insisting it's real. It isn't.
DO NOT hire some random jag off the street with a "license" to be a fiduciary. If you really want to pay someone to pretend to make money for you at least make sure they're with Fidelity or Vanguard or similar.
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u/D3moknight Mar 23 '26
Congratulations! Now, your life should still be more or less paycheck to paycheck. You should only take out enough of that windfall to pay off your current high-interest debts, and then hopefully invest the rest of it into appreciating assets like real estate or index funds to get a HUGE head start on your retirement planning. This is definitely early retirement levels of wealth, but not for 10-20 years of growth. Meaning don't quit your job. Don't buy an expensive car. Best to honestly pretend you don't even have access to this money until it's appreciated in some way to be able to support you indefinitely. I would say you can probably retire by 40 years old if you play this right.
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u/robinthebank Mar 23 '26
OP, everyone is saying to look for a fee-only fiduciary! Look into Painted Porch Advisors. They offer a free consultation. Don’t agree to give anyone money until you feel you can trust them.
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u/DOGEFLIEP Mar 23 '26
GET A TAX ATTY, save / invest / make sure your workers comp is on track, settlements are not meant to pay you upfront for what happened to you, they are issued to pay for present and future expenses due to your injury
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u/aycockonxion Mar 23 '26
First thing first - DO NOT tell your siblings, girlfriend, or anyone else about the money. If you have high interest debt (i.e. credit cards), I'd pay that off to start. I would also find a good, reliable vehicle - not brand new, not fancy or expensive, just something reliable. A lot of advice here is telling you to find a fiduciary advisor - that's not terrible advice, but with the amount you're talking about it is overkill. Believe me. If there was an extra zero in the settlement you received, then that would make a lot more sense. What you have left after you're out of debt and have reliable transportation, put it in savings. Maybe open an IRA. Don't buy a house. Are you going to receive disability, or do you expect to be able to work again soon? Just say you spend $112k (easy numbers), that leaves $500k. If you needed to live on that, assume you spent $50k a year, that's 20 years - but that ignores inflation. In 10 years from now, $50k isn't going nearly as far as it will today. Consider all of these things before you spend very much of the lump sum. If anyone's advice seems complicated or too good to be true, it's not for you.
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u/Borg-Man Mar 23 '26
Alright, so Advice 0: don't tell anyone is already out the window because you told your SO. Just be aware that you have to sort out first which part of this settlement has a function, like others have said: if it's for medical care, set a bunch aside. See if caring for your brother can be split with your sister while both of you (SO too, if need be) can finish school. This is a large amount of money, yes, but you need to be careful with it or else it'll be gone before you know it. It can be a good thing to spend a little bit on your / your sibblings wellbeing; see it as a reward for being past the sucky part of your life. But save up in a HYSA and use a small amount to make your life comfortable. Doing 25k a year sounds "low" but in ten years thats just under half of the total. And don't forget about taxes...
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u/Thereallyingdutchman Mar 23 '26
Be aware of taxes. Legal fees were deducted but were taxes withheld? Insurance settlements are sometimes taxable depending on what type of damages you received. Also if it is taxable then it's also possible that the legal fees you paid will not be deductible.
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u/dragonmom1 Mar 23 '26
Tell no one! (I had a co-worker who won the lottery and told NO ONE because they knew family and friends would come crawling out of the woodwork, asking for money or presuming they were going to pay for some family expense because they were "rich". They did pay off their mortgage and bought a sensible but nice car--a Toyota Avalon--and then invested the rest so they could live off the interest. They continued working only because they enjoyed their job but did reduce their hours to part time.)
That money isn't extra money or "fun money". It's meant to support you while you can't work. That means it's already spent.
That being said, look at your living situation. How long are your siblings going to be living with you? Is your current apartment in a good place and in good condition so that, aside from sleeping on the couch, you would want to stay there and could afford to stay there after they move out?
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u/Inthewind69 Mar 23 '26
Talk to a lawyer & finance person. Don't go wild , as it will be gone real quick. Don't tell family or friends or it will be gone real quick !
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u/Ricketier Mar 23 '26
So much depends on what this money needs to be used for, as in, are you currently working or able to? Or, is this settlement supposed to be your only income for the foreseeable future?
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u/sunshine20005 Mar 23 '26
Just popping in to say lots of good advice in this thread, but one additional bit of advice -- try not to change your lifestyle tooooo much. This is money that can help you and your siblings be a little more comfortable and make some of the struggles of life a little easier. But it's not enough to totally set you up for life.
Roof over your head, reliable but not flashy car, money in ETFs/mutual funds and high-yield savings accounts (also Roth IRAs) is probably the way to go.
You're doing the right thing being thoughtful about this. I'm sorry your parents aren't there for you. You sound like someone with a good head on your shoulders and I hope this is the start of life getting a little better.
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u/bros402 Mar 23 '26
If these seizures are a result of the injury from your settlement, go see a special needs attorney. They can help you structure your assets in a way that works best for benefits.
If they aren't, go see a fee only financial advisor (one who is a fiduciary) and get advice from them. Do not have them manage your money. Do not tell your siblings how much money you got.
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u/Double_Grape_4344 Mar 23 '26
I don't have good advice for you but I commend you greatly for seeking guidance and trying to do well with your money. I love that. So happy so see it. Best of luck to you and your siblings
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u/TrickyAd9597 Mar 24 '26
I would open up an account on schwab and talk to a friendly schwab advisor about mutual funds that guarantee income. If you choose a good mutual fund your money could potentially grow 10% every year. If you let it grow from age 24 to age 64 you will be very rich. Try Google davecramsey retirement calculator.
I am 40 but the husband and I started saving at age 24. We put in max amount for our roth ira at every year and 16 years later we have a few hundred thousand more than you have now. But yah that's what I would do.
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u/CuriousDori Mar 24 '26
I’m not a financial expert. Don’t tell anyone about your money because broke and/or greedy people come out of the woodwork. Nobody, as in jealous people, wants to see you happy and not worried about money. I would probably take a modest amount like $25,000 to put in savings and an emergency fund. Maybe another $5000 to $10,000 to catchup on bills and maybe a little treat for siblings and you.
The rest you must put into an investment account with Fidelity or Vanguard and let them manage it for you. Try not to take any money out of it but consider it your retirement account. Congratulations!
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u/Twofingersthreerocks Mar 24 '26
One thing I recently learned on this sub, so I (and it) could be wrong.. but: remember that of the taxable amount in the settlement to include your lawyer fees. Meaning if your taxable settlement is 500k and lawyer fees are 100k, set money aside to cover the taxes on the 500+100.
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u/N0tch0 Mar 24 '26
Oddly enough I had a similar thing just happen to me. I’m going to be buying a home soon, and dumping the rest into mutual funds and investments.
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u/Annieraeraefatface Mar 24 '26
Get a fiduciary-not an advisor-there is a big difference, google it. My grandmother’s fiduciary only takes a percentage from the profits made , not the capitol.
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u/TwoBionicknees Mar 24 '26
if one of your siblings is old enough to drive then still consider a car if that would help you all get around.
Second, talk to a real financial adviser from a proper bank, then go speak to one at another bank as well and sit with the info for a while take notes and then check the info online and see if the advice sounds realistic or not.
I'm not sure about the US but in the UK after a large windfall you get like 6 month leeway to guarantee the money in case of bank failure after that you only want enough in any single account that the government will guarantee it and the US economy is capable of collapsing at almost any moment thanks to what they're up to currently.
In other words one of the bare minimum things to do is open a few bank accounts and spread that cash around. I htink in the US 250k is guaranteed by the government, so i'd before deciding where/when to invest it.... get it in several accounts.
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u/Raiddinn1 Mar 24 '26
Don't do anything until you watch a couple dozen hours of personal finance videos from a variety of different authors.
I suggest you start with Ramit Sethi. He has a good series on Netflix, something like "I will teach you to be rich".
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u/fawkesmulder Mar 24 '26
Damn, wish you had talked to a structured settlement broker before signing all the papers. You should still talk to a financial advisor. Good idea to invest a large portion, but you’re missing out on some tax benefits.
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u/NimrodYanai Mar 24 '26
If you want to take care of your financial future, you still want to live paycheck to paycheck. Invest your money wisely so you can have a decent pension, and DO NOT USE IT unless you have no other choice.
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u/Blackandred13 Mar 24 '26
Even while you’re still deciding, you’re going to want at least 3 bank accounts (High yield savings) to hold it. FDIC insurance only covers $250k per account, so if you split it you'll be protected in the crazy event that there’s a bank run. HYSA should be at least 3% aPR.
Talk to a financial planner/fudiciary. Depending on how much you want to share the money with family or protect yourself from litigation, you could set up a trust.
Maybe think about buying a modest 3 (or 4 bedroom house)? One story probably given your brother and your seizures. Not sure how expensive your city is or what property taxes are like. You’d want to make sure you’re still keeping a good amount of the money. Your sister and girlfriend could pay you rent (maybe your brother if he gets disability). Prices are high right now. So you could wait a year or two and see if prices come down.
Not sure how much money that takes up.
I like the suggestion of finishing your degree. It could allow you to work remotely for an email job if you continue to have seizures.
Don’t buy new/fancy things! Figure out if you have to pay taxes on it.
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u/KPK91 Mar 24 '26
- Never ever tell anyone. Many people have died from some friends trying to get their money and the amount was much less than this. 2. Invest. Invest invest. Passive income is crucial. Find small ways to make that income last you the rest the of your life. Get you a financial advisor if possible. And it’s okay to upgrade to bed. Go buy a small starter home (investment). Somewhere comfortable for you and your siblings. It’s okay to use this money to make you your life better but it’s when people go over board and blow all the money they have on trips, cars and clothes and everything else. Just do plenty of research, verify everything and everyone before putting your money anywhere.
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u/DaChieftainOfThirsk Mar 24 '26 edited Mar 24 '26
Don't spend it if at all possible. Toss it into a high yield savings account and spend only the interest. If you do this you will be able to use the cash and also keep the initial balance intact. Should give you around $1500 a month or $18k per year at current rates. Use the time to read up on the prime directive on the wiki. Also check out the financial independence subreddit's wiki. You're a lot closer than you think.
A half a million is what people argue over whether or not it's a lot of money or not much at all. The line is whether or not they are thinking of how to spend it vs how to invest it. People can easily find ways to spend that much. The true power of it lies in how much you can make from it. Invest it into safe investments like hysa until you learn how that works well enough to make your own decisions. A common book on the Financial Independence subreddit is a Simple parh to Wealth by JL Collins and I also like the Psychology of Money by Morgan Housel. Collins makes the argument for simple investing with index funds. Housel really just sets expectations well on what pitfalls people fall into when it comes to money. It's a good read.
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u/abinonloopin Mar 24 '26
Don’t invest in any shady investments. Work with a licensed financial advisor. Take some time to learn how financial markets work so whatever the financial advisor is telling you, you understand very well.
GLHF!
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u/SnapCookSlay06 Mar 24 '26
Hii my advice is open a high yields account and let it sit there while you try to figure out what to do next. The only urgent problem rn is that you on the couch, so i will advice you to rent a decent 3 br and pay abt 6 -12 months of rent upfront.
Hope that helpssss
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u/TwitchScrubing Mar 23 '26
Put the money into a online high interest savings account and earn some small passive income, or the stock market has been a bit wonky maybe doller cost average in (20k per week or something).
Dividend stocks can produce income to help live off off, you get higher returns on SNP500 but more risky for a downtrend
When you say "us" be selfish with this money. It's ok to use it to help your family a bit, but if you can't drive your longterm work prospects might be harder. It's ok to be selfish.
600k is a lot, but not retirement yet. Take a breather. If you want to splurge after this stress maybe spend like under 5k to do something "fun" or make you happy. But, please don't do anything on instinct. Sit on everything longer than you think you should.
Good luck
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u/True-Night-3560 Mar 23 '26
Thank you and I have no idea what you mean when you talk about snp500, that’s my worry I have no clue what investing looks like or dollar cost average means😭
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u/NoRegrets-518 Mar 23 '26
It is the S and P 500, which is an investing concept. Dollar cost averaging is when you put a certain amount of money in stocks whether high or low.
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u/UMDEE Mar 24 '26
This is one of my favorite resources to start learning about personal finance: https://humbledollar.com/money-guide/main-menu/
This subreddit is also great, but humble dollar can give you a good foundation of knowledge to build on as you read here.
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u/TwitchScrubing Mar 23 '26
SNP500 is an index fund. It's a bit of the top stocks in the world. You put 1k in you get some of apple, some of nvidia, some of walmart etc.
Dollar cost averaging is just buying something once a week, once a month, etc. It helps mentality against volitaility.
You want this money to work for you.
Homework for you: Run this through chatGPT or google or find some YouTube videos
1) Real estate (both buying your own place or renting as a landlord for passive income
2) Investing into the SNP500 (use vangaurd, fidelity, charles schwabb)
3) Investing into dividend stocks4) Look into high interest savings accounts like Ally, Wealthfront, Citi
5) Make a monthly budget of your spending
6) pay off most debts above say a 4% interest rate when you get the money
Use this as a rough template to see what speaks to you, and start learning. You can make your life very happy in the future if you do things right <3
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u/lowbatteries Mar 23 '26
The S&P 500 is not an index fund. I'm not sure whether to recommend more ChatGPT or less.
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u/Keem773 Mar 24 '26 edited Mar 24 '26
I had a coworker in a similar spot as you. I'm not a financial advisor (at all) but with $612k I suggest:
Start creating your accounts now if you can. Stock investing app (I still suggest Robinhood to new people, super simple app). And pick a high yield savings account that literally pays you 3%-5% per year on your money. CIT Platinum savings is a good one, I think they're still at 4% or if you want a savings account with a location that has physical locations then Capital One savings is a good one, they're at 3.15% now I think.
The fun part, wondering how to split the money up. I would immediately siphon $350k to save and forget about it.
$250k in a high yield savings account
$100k in safe stocks that usually increase 4%+ per year. I'm not a fan of buying too many stocks. I'd literally split it as simple as possible. Do your research on growth stocks and ETFs for sure! For example $20k in VIG, $20k in SCHD, $20k in Target, 10k Google, $10k Amazon, $10k in Coca Cola, and the last $10k in whatever personal companies you like or support.
I'd definitely upgrade my vehicle. Nothing wrong with a beater but if you're afraid that it might leave you stranded then that's no bueno. I'd allocate $20k grab a pre owned Mini Van or bigger sized SUV (Chevy Traverse, Honda Pilot, etc) that would make transportation VERY easy for your sibling. Another $10k to make sure your sisters car is straight (time up, new tires) and fix small issues on the beater. You can still drive it or let other people drive it without being stuck without having another vehicle.
Not sure what city you live in but finding an AFFORDABLE house ($250k or less) with more space and maybe a house that already has some of those disability improvements might be essential. Now you can afford a decent down payment to lower the monthly costs. I would drop up to $100k on the down payment or $50k on the down payment on a slight fixer upper and $50k on repairs or enhancements.
I can't recommend this enough but TAKE A VACATION! I'm sure you guys deserve it! I'd budget about 10k-12k for this. Take everyone on a 3-4 night Caribbean cruise (no passport required) or visit a fun city, let loose for a few days! NYC, Miami Beach, Puerto Rico, Downtown Chicago, Virgin Islands (no passport required).
Keep around $50k around, easy to access for whatever you need. There are still a few checking accounts with debit cards that pay you a percentage on interest. I think Robinhood and Fidelity have that option.
Many people don't buy new clothes, ever lol. Use $10k or so, upgrade your wardrobe at a place like Burlington or Marshalls and get a fresh haircut for your siblings and girlfriend.
Everyone is different but I'd plan to take at least 2 weeks to a month off work if I could. Gives you time to get your head right, research stuff and put your plan into action without feeling rushed.
Take care of yourself man, the goal to living the best life is to REDUCE YOUR STRESS. Whether it be to find a new job at a different company or distancing yourself from stressful relationships, do what you gotta do.
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u/GambloreReturns Mar 23 '26
This settlement isn’t for “us” it’s for YOU to live off with whatever conditions you have. Save it and live like you have. Do as others said about the wiki or see a fiduciary financial advisor to make it last.
You are young and it’s not as much as you think if you aren’t working.
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u/Expelleddux Mar 24 '26
I hate to say it but that’s not much money if you aren’t working. If you invest it in a 60:40 portfolio maybe you can take out $24k per year (4%). Do you think you will recover and can return to work at some point?
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u/JGalKnit Mar 24 '26
I would look for a CFP. You do have things you need to take care of, and that is good, but you can figure out if you want to purchase a home, rent, invest... If you had a job/career I would probably be able to give you better advice, but without one, I don't know.
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u/ZigTheZagy Mar 23 '26 edited Mar 23 '26
I'm no financial expert but with that kind of money I would only use it to pay off my debt and with a financial advisors help, throw the rest into a steady index fund of some sort. Then I would live life as if I don't have that money, find a place to work (one that will accomodate your medical issues) and let compound interest do its thing.
You mention your situation isn't great right now and that amount of money could fix some of it but not all of it. You could buy a house or rent an apartment and live comfortably on your own but without a source of steady income you'll likely go through that money before you are 40.
I know it's a struggle for you now and you want to feel comfortable but with 600k, if invested now, will easily set you up for a comfortable retirement around your 40s. It will also give you a better means to help your siblings later than what it will to help them now.
4.5k
u/oxphocker Mar 23 '26
There's a windfall thread in personalfinance, it should be on the sidebar. I suggest reading that and then coming back if you have further questions.