Summary
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I’m Only 26 And Getting A $4.7m Inheritance But Don’t Know What To Do
One of the most challenging things to process in anyone’s financial life can be the sudden windfall of a life-changing amount of money. Whether it’s because of a lottery or inheritance, if you receive enough money to turn your life upside down completely, it can be difficult to manage. Key Points This Redditor is in a unique position, inheriting significant wealth. There is no question this Redditor needs to talk to someone about how to handle their emotions. The hope is that this Redditor can create significant wealth for retirement. Are you ahead, or behind on retirement? SmartAsset’s free tool can match you with a financial advisor in minutes to help you answer that today. Each advisor has been carefully vetted, and must act in your best interests. Don’t waste another minute; get started by clicking here.(Sponsor) For one Redditor posting in r/personalfinance, this is all too true, as they knew they would receive some money from a grandparent but not the exact amount they were expecting. Looking to inherit upwards of $700,000 with millions more on the way, this Redditor has to make some quick financial decisions. Suddenly Very Comfortable For a Redditor accustomed to earning $65,000 per year in a high-cost-of-living city, inheriting $700,000 at 26 years old is life-changing. Even if the Redditor made more money or lived elsewhere, it’s still a considerable amount of cash. What’s more notable is not just the initial inheritance, but also the expectation to receive around $4 million more as beneficiaries of other investments. Wait, there’s more, as other relatives will take advantage of the annual gift exclusion and likely present the Redditor with anywhere between $50,000 and $100,000 per year in gifts. As someone who is generally living month to month, spending $3,500 out of a take-home pay of $3,500, it’s not surprising the Redditor is feeling overwhelmed. The amount of money aside for a moment, they are struggling with the emotional side of losing a grandparent, all while being surprised with an inheritance far greater than expected. The hope is that they can find someone who can help them, who isn’t related or associated with any family, to figure out how to manage this money best. They know this isn’t enough to secure a dedicated, big-money advisor, but there is no question that this money requires professional management, especially if they don’t know how to manage it on their own. What To Do Next At the very top of the list of what to do next is not to tell anyone. Outside of family who already know what’s taking place, this Redditor shouldn’t tell anyone at all what is taking place. There is mention of a spouse or partner, so assuming someone else doesn’t exist, they shouldn’t disclose financial information to anyone. Even if a new love affair enters their life, they should keep the financial situation private until the relationship progresses to a point where it appears to be permanent. Any indication that you received a sudden windfall is likely to prompt family members who didn’t receive money and friends who haven’t spoken to you in a while to come out and ask for help. Aside from not telling anyone, this Redditor also needs an opportunity to grieve. They need to come to terms with everything taking place emotionally, including the death of a loved one and the sudden windfall. There is every reason to think that a therapist would be a good person to speak with, at least for a little while, to help the Redditor come to terms with these life-changing moments. Don’t Overspend The Redditor also mentions using some of the money to update their lifestyle, but I would advise against it, as would a financial advisor. Yes, you can look to use some of the money to buy a home, but a new sports car or a sudden new wardrobe is a waste. At 26, this money can be life-changing in retirement, even if no other money arrives. Let’s say the Redditor wants to spend $50,000 on miscellaneous purposes, such as a vacation, lifestyle enhancements, and a healthy emergency savings fund. With $650,000 invested at a conservative 6% annual interest rate, this amount would now be $3.7 million after 30 years. Add in the potential for the other millions they could inherit, and all of a sudden, you have a far more comfortable retirement. The bottom line is that the Redditor should consult a fiduciary financial planner to determine the next step. Whether that involves putting the money into VTI as they suggest and simply holding it, or spreading it out in a diverse portfolio, consulting a professional is the best approach. The post I’m Only 26 And Getting A $4.7m Inheritance But Don’t Know What To Do appeared first on 24/7 Wall St..
VTI: Beyond Recent Underperformance - Broader Markets
VTI offers broad US market exposure, but remains large-cap heavy, leading to performance closely tracking SPY. VTI underperforms SPY during narrow, mega-cap-led rallies and market panics, but outperforms in broad-based rallies and periods of lower rates. Despite recent underperformance, VTI historically outperformed SPY pre-COVID and remains a strong long-term core holding for diversification.
Building A Better VTI: Why Combining U.S. Large Cap And U.S. Small-Cap Value Makes More Sense
VTI's broad exposure includes many underperforming small-cap growth stocks, diluting long-term returns and factor purity. Replacing VTI with a VOO + AVUV blend improves performance by targeting proven equity drivers while cutting out low-quality small caps. Small-cap value has historically delivered stronger CAGR and risk-adjusted returns than total small-cap or small-cap growth segments.
Vanguard Total Stock Market ETF Dividends
 VTI In 2 months Estimated | Quarterly | $0.91 Per Share |
| VTI 3 weeks ago Paid | Quarterly | $0.91 Per Share |
| VTI 3 months ago Paid | Quarterly | $0.98 Per Share |
| VTI 7 months ago Paid | Quarterly | $0.94 Per Share |
| VTI 9 months ago Paid | Quarterly | $0.87 Per Share |
| VTI 28 Jun 2024 Paid | Quarterly | $0.95 Per Share |
Vanguard Total Stock Market ETF Earnings
| VTI In 2 months Estimated | Quarterly | $0.91 Per Share |
| VTI 3 weeks ago Paid | Quarterly | $0.91 Per Share |
| VTI 3 months ago Paid | Quarterly | $0.98 Per Share |
| VTI 7 months ago Paid | Quarterly | $0.94 Per Share |
| VTI 9 months ago Paid | Quarterly | $0.87 Per Share |
| VTI 28 Jun 2024 Paid | Quarterly | $0.95 Per Share |
Vanguard Total Stock Market ETF (VTI) FAQ
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Vanguard Total Stock Market ETF Profile
| ARCA Exchange | US Country |
Overview
This company stands as a hallmark of investment solutions, focusing squarely on offering an indexing investment approach. Their primary strategy is to mirror the performance of a comprehensive index that encapsulates virtually the entirety of the investable U.S. stock market. This includes stocks across all capitalizations; large-cap, mid-cap, small-cap, and even micro-cap. By adopting a method of sampling the index, they are able to provide investors with a broadly diversified portfolio. This methodological approach ensures that their holdings, in aggregate, closely approximate the full index in terms of essential traits.
Products and Services
- Indexing Investment Approach
- Investment Sampling
This service is the cornerstone of the company's offerings, focusing on tracking the performance of an extensive index that mirrors the entire investable U.S. stock market. It encapsulates a wide spectrum of stocks, from large- to micro-caps, enabling investors to diversify their portfolios significantly.
A unique strategy where the company doesn't replicate the index stock for stock but instead selects a broad collection of securities. These selections are meticulously chosen to ensure that, collectively, they reflect the key characteristics of the entire index, thereby offering an efficient and diversified investment avenue.
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