In less than a year I will be getting about $60,000 at 18 from a trust fund which I got from my mother dying due to medical malpractice. This is not satire or ironic; I legitimately am getting this money, and would like to know how I can grow this online while I also potentially go to college.
Legitimate answer: step 1, open a high-yield savings account with a reputable bank. I’d suggest going with whoever offers the highest APY at the time, such as Ally, Barclays, or Chase.
While you have it parked there netting at least 2%, start reading about index funds and consider moving some or all of the money into one or more of them. Look for low expense ratios and a decent 10-year return.
Forget about the money for a while. $60k is a great starting point for investing.
@Ari
I use Forbright and get 5%.
@Ari
Jenius Bank is a bit over 5%.
@Ari
You can check the financial standing of any FDIC-insured bank here: https://www.ffiec.gov/UBPR.htm. It’s called a UBPR report, all public info.
@Ari
Credit Karma is anywhere from 3.5-5.5% and I think it’s insured a little higher than standard FDIC. Anyone thought of this?
@Ari
2%??? Don’t settle for less than 4-6%.
Finley said:
@Ari
2%??? Don’t settle for less than 4-6%.
Maybe ‘netting 2%’ referred to ~3% inflation?
@Ari
This sounds good; I will look more into index funds because I don’t quite know what they are. Do you think something more active like flipping or subletting would have merit? My sister also got $60k when she turned 18 and wanted to place a down payment on a cheap condo but it never materialized.
@Jules
No. Put the money in an index fund. Don’t touch it; don’t flip homes, buy cars, or do down payments. Specifically, the S&P 500, such as Vanguard, has outperformed most investors barring private equity, which you can’t access unless you have $10 million.
I went to UChicago for finance. After all the fees, the index fund will perform better. Avoid small growth stocks; you won’t have access to them.
Open a Roth IRA, max it out, and do the rest in a normal account. If you don’t believe me, speak to a finance professor at your school.
@Jules
I use Vanguard, which is VTI on Robinhood. They’ve averaged 14% yearly over the past 5 years. At 14%, you get $8,400 for free just for having savings.
@Jules
Max out Roth. If you plan on college, consider a 529 account for tax advantages.
@Jules
You’ve got a gift most people don’t get—please avoid ‘flipping it.’ Put it in an index fund and forget about it while continuing to make sound financial decisions.
$30k in SCHD, $30k in SCHG.
Put $7k into your Roth IRA and pick an index fund. Retirement may seem far away, but the sooner you contribute, the better. Time is on your side for compound interest. For the rest of the money, follow the excellent advice here.
@Dakotah
This is the best option. $60k at 18 with no further investments would exceed a million dollars by age 60. Roth contribution limits are $6k. $23,000 can go into a 401k annually. Save for retirement!
@Kimberly
Roth contributions were raised to $7k in 2024.
I would actually discourage a high-yield savings account. 3% is quite low.
Do this:
- Pay off any credit card debt.
- Put $5,000 into a rainy day fund—you need it for emergencies, not for budget shortfalls.
- Put the rest in a low-cost index fund until you’re ready to buy a house. When the time comes, use half for the house and keep the rest in the market long-term.
The biggest mistake is to spend it all; it should never be ‘gone.’
Beryl said:
@Wren
What’s the difference between a rainy day fund and a high-yield savings account?
The difference lies in each fund’s end goal.
For a HYSA, interest is the focus. A rainy day fund ensures funds are available when you need them. A good interest rate is great, but accessing the money quickly is vital.