Young adults panic over cash wins
Multiple young adults (18-23) express confusion and anxiety about how to handle sudden cash windfalls (£60k, $120k, $60k) due to lack of financial literacy and guidance. They seek simple, trustworthy ways to save or invest without getting scammed or overwhelmed.
SOURCES (60)
“A financial planner might, might be helpful for clarifying your own goals. A financial planner can’t teach you how to invest better than the basics, which are simple. And not easy, but that’s all on you. You should never pay fees based on your portfolio.…”
“Yes, just get a Term policy. 30 years is fine, and the general recommendation is to get one for about 10x your salary. That can go up or down based on life circumstances. Don't let anyone sell you on Whole Life, Indexed Universal Life, etc.. About 99.9% of people have no need for those types of policies.”
“But you then have to come up with the money anyway... with interest. You would be paying the money in both cases, just in one you earn interest on it and other you pay interest. How do you afford it after you get the loan if you cant afford it before the loan? And the main point here is that this bill should have been planned for and accounted for in their budget. I dont think anyone should give away their pet, its a terrible thing, but if your budget is so wire thin that $5 a week is too much,”
“His swr will be Tiny once he starting to get pension. So he can spend his investments from now to 55.”
“Saved up some cash to invest. I can use it to convert my garage in into a ADU that can bring in about 2k a month or ? What do you guys suggest as a better investment? submitted by /u/enzoskii [link] [comments]”
“Yes. Or sell the bike and pay off the car. But keep 3 months expenses in a high interest saving account so that unplanned expenses don't increase your debt. You need a budget. Ynab.com”
“No. That’s when the step up takes place. They don’t really have a meaningful daily swing in value anyway.”
“I recently turned 18 and I know nothing about mutual funds or stocks I just want to invest the money right now submitted by /u/Dazzling-Biscotti-20 [link] [comments]”
“Think about the time value of money. You don't want to be some 30 year old incel living in mom's basement to save money. You need to balance saving with living and experiences. Money when you are old is nice but most 40 year olds would give anything to have the freedom and health they did in their 20s.”
“Did they come into the money late? If not that's crazy taking you on one camping trip a year growing up.”
“That's a great perspective and something for me to think about. Thanks for sharing.”
“Buying a corvette on a 5k a month salary is a waste. Betting is a waste. I my opinion, for large wants like leisure cars, boats, etc. If you couldn't afford them living on your own, you really shouldn't. You never know when your living situation will change, you don't want your cash flow tied up in a corvette.”
“I follow a boglehead-style investing strategy, running a three-fund portfolio minus the bonds due to my age. I do my best to stay disciplined and not make any known-to-me errors such as market timing or increasing risk without increasing expected returns via buying single stocks or single sectors. However recently I hear more and more about Berkshire Hathaway and how they are saving up cash waiting for a market crash to go buy everything on discount. That sounds a lot like market timing, but I s”
“That's $120k safe withdraw rate that you can take to a LCOL area. It's totally fine.”
“Been pitching this to my parents. Told them we don’t need their money and want them to have as much fun with each other and with us while they still can.”
““the other half was my partner got equity” Not a slight against you they cashed out and you got rich. No need to downplay it and call it half. It’s a win for both of you.”
“Getting to that point usually involves a highly concentrated position that is notionally worth that much but liquidating the entire position would crash the value so it isn't possible to net the entire value at once. So the question becomes about liquidity, cash flow, trusts & estate planning, etc.”
“Inflation is accounted for already in these scenarios. Diversify from the US with your portfolio if that’s your concern. Estimate what it costs to build the house or buy the cars. Work more if you want to leave more wealth to your kids, otherwise, don’t. You’ll still be fine. Those are moot points in my opinion”
“Came into 14k, help me make a financially smart decision. I have no debt I have no credit I have no savings/retirement I have no investments I know nothing about investing I own a small carpentry and general contracting buisness, 3 years in so I'm barely making money yet. I know pushing this into the business could help a lot but I'm at a point right now where I need more clients or bigger jobs and not tools or material items. Since I don't have anything saved for my future I was hop”
“I don’t know the answer to this to be honest, but if you have such a bad feeling - don’t put money in it. I don’t know what sector you in, but why do you have the feeling this isn’t going to work out?”
“Consider taking a sabbatical of 6 months or a several years 😅 to do the things you’d enjoy and time with the young one Have a loose return plan or work on 2nd career if it helps with the anxiety Enjoy!”
“OP should NOT be buying bonds to hedge against a crash at 23. If the market crashes, he should buy even MORE stocks. They would be at a discount. He doesn’t have to worry for 30 years.”
“You are doing great. You are young and have a great set up. My suggestion is to keep it up at high income jobs, keep the spending in check, keep maxing retirement accounts, and try to up the brokerage contributions. I’d plan to keep at it for at least another 5-7 years before considering taking a big pay cut, especially if you plan on having more kids. You will probably be want to be at around $5m to RE.”
“The money presumably starts getting interest on day 1. They are not putting it in a bank account for 25 years and then investing it. So yes it is very possible to get 2 million after 25 years.”
“Keep $5K in raw cash, $100k in money market funds or a savings account, and the rest in s&p500 funds. The cash is your emergency fund. The money market is savings for a big purchase. The rest exists to grow (don't touch it!)and potentially earn dividends that you can match to recurring expenses (i.e. insurance, taxes, obligations). That is.... Unless there's something he's not telling you. Ask him why.”
“Lately every investing decision feels harder than it should. I read one thread and want to stay fully passive. Then someone makes a convincing case for AI stocks, then recession posts show up everywhere, then crypto rallies again and suddenly I feel underexposed there too. Every week I convinced myself a different strategy made more sense. I’d literally open my brokerage app, then close it again 5 minutes later without doing anything. I think too many online opinions kind of wrecked my ability t”
“I am in the process of rebalancing my portfolio from a bunch of slop + sold a shit ton of ESPP so I have about 100k I have ready to deploy Would it be silly to dump it all at once and just get in the market with a better, long term strategy? Should I be holding more cash? DCA’ing the 100k over a few months? I’m either going all in on $VT or going $FXAIX & $FZILX with a small touch of bonds I have my 10 month rainy day fund in a HYSA, so I’m set there. I have about 3k/m I have carved out to i”
“TL;DR: How bad did I fuck up and how can I overcome this. Bear with me through my rambling. 32F. Just started investing in index funds a few months ago. May have overdid it a tad - I have 60% of my money in FSKAX & FTHIX (yes, I know I messed this one up since they're both the same/stocks), 3% in FXNAX (bonds), and 37% in cash/30-year i-Bonds (not my choice for the bonds, was given). I'll be using most of the cash I have for closing costs towards a house in the future (no set date).”
“G’day Title really sums it up. Inherited $60K AUD and looking to be smart about what to do with it. In no real financial difficulty so happy for it to sit and start building towards something. Currently renting in Sydney so not anywhere near enough for a deposit on a home. Do have a car in finance with about $25k left to pay over 4 years. No credit cards or debts. Any advice would be appreciated as have been pretty poor with investing / saving in the past submitted by /u/Twaalk [link”
“Hey guys I’ve saved up a decent amount of money from my job but my index fund is only generating 6% a year or so growth. By my calculations that will make me a millionaire by about 2054 which isn’t really good enough, I need to get some hoes now tbh. I’m not much of a fashionista but it’s pretty clear the fashion industry does in fact move in 20 year cycles (google it if you disagree). Now this is good because I’m checking the price of skinny jeans on Vinted and they’re cheap as shit. Like £4 a”
“I’m one of those people. I’m halfway there so I still have some work to do and use this sub for inspiration.”
“Hey everyone, recently, a family member came into a small six-figure windfall that's currently just sitting in a normal checking account at a local bank. They want to put 100-125k in some type of high yield savings or some type of money-making money situation. Can you all help point us in the right direction on what you would do with this money? TIA Edited to add. They are 80 retired, no debt. submitted by /u/SubstantialDevice284 [link] [comments]”
“tho if you look at the ones who blew everything in less than 6 months, you'll find the same qualities. Instinct develops over time, you don't have to make mistakes to develop it but you probably will. Nothing teaches like pain.”
“Everyone says put it in a HYSA but just to offer you another option- open a brokerage account, I did so at my bank, and dump some into SGOV, which is US short term treasury bonds. It pays roughly 3.5% interest which is not as great as some HYSAs but still more solid than 1% in your savings account. When you get paid the dividend it is exempt from state income tax, you only pay federal tax on it. The thing to know about SGOV is its traded like a stock so you can only move money around when the st”
“3mm is nowhere near enough to support 300k/yr spending at a normal retirement age much less today, idk what math you did but I highly suggest paying someone to do the next math for you. Also dude, not to knock you down a peg, but 3mm isn’t “fat”.”
“Only? That's better than me with 6yoe, I barely have 30k in 401k, $700 in a brokerage account and $3k in HYSA”
“Yeah it's unfortunate. I'm assuming the ones you're referring to are the ones where even the big "guru's" got into back in 2021/22 with floating rate debt, many of which lost investors' capital. I can rant about that all day: Many of them weren't operators (just good marketers) and got in when it was the hype, super aggressive on assumptions, and a lot of them had to keep doing deals to make a living. Sucks that thats really all what people hear. I've been i”
“If you have 200k sitting under a business account. How would you go about growing this money. Time is not a issue submitted by /u/Samb124590 [link] [comments]”
“Hold—you get the cash tax free from selling and…. Do what? Go look for the next best investment? You’re not beating that cash on cash return right now anywhere. Consider that money gone and in safe profitable place (2.25% fixed rate lol). No brainer. Also P.S. my understand primary residence is mostly a tax status and FHA only cares when they’re qualifying you for the initial loan. There’s nothing stopping you from buying another house with 20% down payment and ‘living in it’. It’s just not your”
“Bruh. You have a 0.5% SWR. There's a reasonable chance you will pass on a billion pounds to your children. If you don't want to spend any money, totally fine, but I would strongly encourage you and your wife (and the kids if they have good judgment) to write out a bucket list of stuff you've always wanted to do, and to start working through the list. Money is not an object, and you've got time and health. Places you've wanted to see, things you've wanted to do, etc. For s”
“Put it into a low cost index fund like VOO or FXAIX and keep automatically contributing a few hundred bucks a month. You have what most investors don't - time. You'll be a multi-millionaire in that account alone by retirement age. I use Fidelity but it sounds like they're all pretty similar.”
“You can start retirement savings with 10 bucks. You dont need to wait until you have "enough to start".”
“Yeah, OP, I’d put it in a high yield savings account or a brokerage account. You could either leave it uninvested and still get about 4% if you’re more cautious or invest in index funds and keep reinvesting those dividends if you’re slightly more risk tolerant. Start thinking long term about your vacation payout!”
“Not posting like Im some guy whos so smart but more posting for motivation because I am NOT smart and know this is not repeatable every year. My portfolio is pretty much my researched and chosen 21 stocks from the SP500’s top 50 that I buy when i feel they are undervalued with the intention of holding for long term. Most of my companies are not what people think of dividend companies but I look for predictable cash flow and growth with the intention that dividends will follow… and if they dont t”
“Currently unemployed after being laid off by a Tech Company. I also was in a car accident and received a lump sum payment for my PI case of 300k. I already put 195k in two different HYSA. I want to also go to Law School in the next upcoming years. How much should I invest in a Brokerage account at Charles Schwab? Meeting with them on Thursday. I am guestimating 25k but is that too little? submitted by /u/Former-Air-539 [link] [comments]”
“Hold. You have a given income now and it'll remain that way. If you throw it in the stock market, you're going to need to get the same exact return on your investment as you're getting now from your real estate. However, the stock market goes up and down hold it for a while. You'll get a million bucks out of it”
Sell and put it in the stock market. It will outdo real estate any day.