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Rising Star
I’d probably put it in a savings account until late July or so at least (after paying off any debt and such) - no one can time the market but it’s not a bad move to see how Q3 results play out before investing. I’ll probably get a lot of flak here for saying that. If you invest, I would advise doing it for the long haul (low cost S&P index fund or something) unless you really know what you’re doing - I personally would run it a bit safer with inheritance out of respect for the family member, and low cost index funds never go wrong with enough time in market - and using the money at a later date when you need the large sum more than you do now.
If you go the savings route, sure that whatever savings account you keep it in has sufficient FDIC coverage. You could do a Certificate of Deposit and make some (low) interest off of it as well.
Another great option is to use it towards a down payment, if you’re looking to buy soon (but again, might be wise to wait 12-18 months given that we won’t see any housing impact for a while, for a variety of reasons). My friend received an inheritance from his grandmother and used it to buy a house. I loved the symbolism of that. Graduate school could be another option - 200K will be great towards an MBA - again, just keep it somewhere conservative so you know it’ll be there if you need it soon!
It is smart not to spend any of it and put it all away, but also smart to make solid investment decisions and/or use some of it on things that would make you happy (or him to see you with). Just don’t feel any rush to do so immediately. We are in strange times.
So sorry for your loss, OP. Hope you and your loved ones are doing well.
Edit: I personally would hold off on hiring a financial advisor. Don’t think you need it really. If you do hire one, make sure they’re reputable and working for a flat fee.
Why is everyone saying hire a financial advisor. For 200k? No. First pay off debts. Second establish emergency fund. Third max out retirement. Forth, S&P 500 index fund and don't touch till retirement or you need it. Unless there are short term goals like a house to save for and you want to use money for that, market over time has always been reliable. If that doesn't prove to be the case, everyone's 401k is fucked, their retirement is fucked, and the whole economy is fucked.
Slalom, that’s why a good financial advisor would say not to dump it all into the S&P 500. A solid chunk of your portfolio should be diversified into international markets and other assets that would protect you in case the US economy truly crumbles.
Chief
@EY OP: Sorry to hear about your grandfather. Are you ok?
This 🖤👆🏻
Fill up your rainy day/safety net savings first. Once that's full, invest the majority of it per the suggestions above.
Make sure to take some small % to enjoy those. Do something you and your grandfather enjoyed together, or just something he knows you'd be happy spending the money on.
*to enjoy yourself
I’d recommend asking around for a reputable financial advisor for advice (ask friends, family, coworkers even). An interest bearing savings account is safe but probably better places to go
Don’t give your money to someone else for a fee when the knowledge is freely available on the inter webs
OP, condolences as this must be tough for you.
I wouldnt do any of the stuff listed above until you do some research on your end. You need to move that €200k into $ so your financial institution will take a chunk of that for conversion fees. Investigate how you can convert that with the least amount of pain. Second, figure out tax ramifications. Our government generally allows “gifts” up to $10k. Im not sure how we handle foreign transactions like this. The US has an estate tax which shouldnt be applicable for a German national dying.
A financial advisor may be a good idea to figure the above our, however, EY likely has some independence procedures in place so dont just hire anyone. See how EY recommends advisors for this. Once you have the money, you may not want to pay an advisor to manage that unless you have additional money to manage alongside this lump sum. My personal recommendation, sit still for a little while. I expect a wild ride the next 6-12 months for stocks and interest rates wont be moving (upward) anytime soon.
FYI, Germany does indeed have an inheritance task. The rate apparently varies. You will need to get some help from someone in Germany to make sure you pay the taxes then identify a route to bring the rest home. German bureaucracy can be a nightmare to deal with so try to find some help here. Ask about “Erbschaftsteuer”.
I wouldn’t play the stock market just quite yet.
Chief
Hookers and blow are a much safer bet until COVID is over.
Chief
House
Sorry for your loss. I'd pre-order a cyber truck.
Sorry to hear about your grandfather OP
200k is a lot of money for someone. I’m sure if your grandfather was leaving you this much money he’d want you to enjoy yourself and set yourself up for the future. I recommend taking a small amount maybe 5k and using that for enjoyment then diversify the rest, high yield savings, bonds, stocks, mutual funds, etc, if youre ready to settle down maybe buy a home or if youre handy maybe use some of the money on an investment property as either a rental or flip
Rising Star
When my great aunt died a long time ago she left me $10k and instructed me to "spend it on something I didn't need". $200k is a lot of money and I would be willing to bet that your grandfather would want you to take a tiny bit of that and use it to enjoy life to the fullest. Once coronavirus cools off I would take $5-10k and take a fantastic trip, make memories and think about your grandfather as you see the world. Time and youth are the only things you cannot buy.
Bitcoin Baby! 🚀
Right. You could put $10k (rn about 1.1 bitcoins) and just hold it. And only be investing 5% of your new capital.
Enthusiast
Sorry to hear about your grandpa. I am in a similar boat as you, my aunt passed from COVID - I’m inheriting about the same. Don’t know exactly where to start, seems like some good advice here. Following...
Hire a financial advisor since you have the money. Otherwise buy stock, bond, reit ETFs. Dollar cost averaging (set amount every few weeks/month. You’ll spread your risk and don’t need to time the top or bottom of the market.
Buy gold bars. Hide them and tell no one. This is the only way to ensure you keep your buying power through the coming inflation we are about to experience.
Chief
Should also stock up on ammo to protect your stash of gold bars
Since young people are all about experiences and not material things, I would say hookers and blow. One month of debauchery will serve you a lifetime of memories and stories to share.
Enthusiast
Sorry for your loss. ❤️
For that amount of money and with interest where it is, I would recommend a house, wait for prices to drop, look for something that will increase in value in 5-10 years (blue collar areas will always rent and might be most impacted house price wise), if you can renovate it to increase value etc.
Financial advisor.
Maybe take out 1K and buy yourself something nice. Save the rest.
Seriously, just save the rest of it into diversified investments, and don’t touch it. You’ll thank yourself when you hit 40. By then, you’ll have made a handsome profit without even touching it.
I expect we’ll see property values decrease a bit, if not eventually a lot, due to Covid related recession/depression.
I would keep an eye on the real estate market and consider making a smart investment you can afford at what feels like a low in the market. And then sit on it for at least 5-10 years. If you buy in a place people want to be odds are you will eventually come up very well.
Very sorry for your loss...I may have missed it being mentioned here, but if you are a US tax resident and getting an inheritance that large from outside of the US, you may have a F3520 filing requirement for 2020. Onerous penalties if not handled properly.