I recently got a sports card collection from a relative who passed away. The collection is about $60,000. It was left to my brother and me in equal shares. So I’m thinking about what to do with my part of the money.
I want to invest it. I have very little debt, I paid off my college tuition (community college), I have no credit card debt, and I still owe $5,000 on my car. I also live at home with no bills. Any advice would be great
Yes. Investing 30k in a broad stock market ETF like VOO, VT, or VTI is a solid choice. With a return of around 4% per year (as predicted by Vanguard), you could see your 30k grow to about 44k in 10 years and 97k in 30 years. But try to pay off your car loan first, if you can, and keep some cash as an emergency fund. So maybe invest 20k, pay off the 5k car loan, and keep 5k in cash.
@Valentine
97k after thirty years seems like a low return
Phoenix said:
@Valentine
97k after thirty years seems like a low return
That doesn’t sound like a great return. A 4% nominal return is something you could get from a high interest savings account. It should really be expressed as net of inflation.
Here’s some general advice for someone who just received cash:
That amount of money won’t generate much passive income, but it can help set you up for the future if you start a regular investment program.
First, pay off any high interest debt, like credit cards. You’ll struggle financially if you’re dealing with those high rates. (It sounds like you’re already good here, but it’s important to mention)
Second, control your spending with a budget so you don’t fall back into credit card debt. Sometimes people slide back into debt slowly, not all at once. (Again, it sounds like you’re managing your debt well, so good job!)
Third, figure out how much you earn in two months at your job and put that into a high interest savings account. I have one with American Express that pays about 4.5%. You can still access your money when you need it. This is your emergency fund. (If you already have this, then you’re in a strong position!)
Fourth, spend a thousand on something fun for yourself.
Fifth, put the maximum amount you can into a ROTH IRA. This is a retirement account where you use taxed money and all the growth is tax-free when you take it out. You can’t touch it until you’re 59 and a half, but it’s there for retirement. You can contribute the same amount each year. DO IT. Tax-free investment income is really valuable. In your ROTH IRA, invest in stock index mutual funds.
Sixth, invest what’s left in a general brokerage account. I buy mutual funds that track stock indexes, like the S&P 500. I mostly use various America Funds, which have done well for me over the years. Vanguard is another option. You buy shares in a mutual fund, and the manager buys different stocks to track the index. Just hold onto it for the long term. The market will have ups and downs, but overall it averages about a 9.7% return annually. This means your money doubles every 7.5 years. 50K becomes 100K, 200K, and so on. Try to ignore short-term fluctuations. Focus on solid investments and hold onto them. DON’T BUY INDIVIDUAL STOCKS. You need expertise for that, and the risk is much higher. You can make money, but you have to be okay with the chance of losing it if the stock doesn’t perform well.
Finally, sit down with a financial advisor to discuss your options. MAKE SURE YOU HAVE A FIDUCIARY AGREEMENT with the advisor. Also, ensure the advisor charges a fixed fee, not a percentage of your portfolio. This matters a lot when your portfolio grows. A 1% fee on $100 is just $1, but 1% of $1,000,000 is $1,000!
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A fiduciary agreement means they must act in your best interest, not the company’s. I had an advisor who tried to push a fund that was managed by their firm, but it had high fees and poor performance. I moved my investments elsewhere.
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If your advisor is pushing individual stocks, or if you feel they aren’t listening, find someone else. You can easily switch to a new advisor and have your accounts transferred without selling shares and paying taxes. It’s just paperwork.
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You can meet with an advisor, explain your needs, and see what they suggest. Treat it like a job interview because it’s a trusted position. You don’t have to go with the first person you meet. If you want a basic strategy like mutual funds tracking the S&P 500, there are many online services available. I’ve used a broker/advisor for over 30 years who helps me find high-performing funds that fit my risk profile. There are many options. Going the online route can save costs, but it leaves you doing the research. If you’re willing to learn about capital gains, dividends, management fees, and volatility, this could work for you.
Look up how to invest on your own and read various sources to find good strategies. Ignore any sites trying to sell you something. Many investment companies, like Fidelity, offer basic information. Once you understand the terms, you can research them for more clarity. Wikipedia can also provide a lot of detail.
If you choose to invest on your own, you need to put in the work to educate yourself
Google is great for finding info on fund management fees and performance trends.
@Brogan
Wow this is super helpful. I really appreciate it. Thank you
@Brogan
If you don’t mind me asking, how did you learn all this
LillyGrace said:
@Brogan
If you don’t mind me asking, how did you learn all this
A lot of places
My dad taught me the basics when I was a teen, and I took a class in high school that covered stocks a bit.
My first boss after college did what I now do. He talked to me about long-term investing.
I met my broker, who has been with me for 35 years, at a Dungeons and Dragons game. He taught me a lot that I didn’t cover here.
After 40 years of investing and being cautious with my money, I’ve outperformed the stock market by about 1.5%. But I wish I had invested more earlier.
The internet is also a great resource, but be careful. If something sounds too good to be true, check it against three other sources. Then, ask your advisor about any risks.
I’ve had this conversation with my kids and every junior engineer I’ve hired. Company-funded pensions are disappearing, so it’s crucial to start investing early if you want to retire comfortably. There are so many ways to spend money now that didn’t exist when I was in my 20s and 30s.
So, I always suggest making a plan and sticking to it as best as you can. Some months it won’t work, and that’s fine. Just get back on track as soon as you can.
Phoenix said:
@Valentine
97k after thirty years seems like a low return
If you consider Bitcoin, it is a good investment
@Valentine
Thanks for the info! I’ll definitely check those out
@Valentine
You might get a 10% return or more. Adding some crypto could help too
Cale said:
First, you need to actually sell the cards and see how much you’ll get.
An estimated value of 60k doesn’t guarantee you’ll get that when you sell them
The actual estimated value for the cards is over $200,000. I was being conservative with my estimate, just thinking about the future. My relative made 60-70k a year buying and selling cards.
@Cale
You can plan your investments in advance. There’s no reason not to
To all the doubters, my last ETF was making 18% at Vanguard. I withdrew some cash to buy business equipment that generates more income.
Look for an investment calculator and see what might happen.
Invest that full 30k, add whatever you can with automatic deductions, and you’ll thank me later.
Try to increase your automatic deduction as much as possible over time.
@Rowan
Great advice here. Not sure why some are suggesting a 4% return. My Vanguard funds are up nearly 20% in the last year and my crypto is up over 100%. SUI has increased over 100% this month. No one should aim for just 4%
Mica said:
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I’d love to see your calculations on this
Mica said:
[deleted]
I’d love to see your calculations on this
I think they mean tens of thousands of dollars. At 4%, they’d double their money in 18 years. With a 1.5% dividend, it would be about 13 years. So, 25k for 25 years could be around $100k?
Mica said:
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This sounds too good to be true. Lol I’m glad to be here, I know nothing yet
Mica said:
[deleted]
This sounds too good to be true. Lol I’m glad to be here, I know nothing yet
Time is the key for investing. The longer you invest, the more it builds up. Check out dividend investing videos on YouTube. They show how your ETFs and stocks can grow from share appreciation, dividend increases, and reinvesting dividends to buy more shares.
It starts slowly. But after years 20, 25, 30, it really takes off and your portfolio and annual passive income grow significantly
Cortland said:
Do you have a Roth IRA set up for yourself
I don’t have one, but it sounds like it’s highly recommended. I’m 22 and still trying to learn about all this stuff.
@Cortland
What are some good places to set this up