What should I do with settlement money.

300-500k isn’t much. You’ll still have to work mate.

I would take a look at your short and long term needs. Realistically, you should split it into three buckets: investments, high yield savings and your checking. The amount of money that you put in each account will depend on your needs.

For example, I’d talk to your lawyer about how much you’ll need to set aside to pay taxes on the settlement amount (if that’s something that’s required by the law in your country). That should be held in your checking account.

I’d also set aside funds for a replacement car (if necessary) in your checking account.

In a high yield savings account, I’d set aside funds for your short term needs. Are you going to get any higher education in the next 5 years? You need to set aside some of this money to pay for your education, any materials you need for it (special tools or books), and other incidentals.

Then, I’d invest the rest.

It’s highly likely that your medical insurance will recoup their costs from that payout.  If you had multiple back/neck surgeries, that will significantly reduce the amount that you actually get. 

The best return on the remainder is to invest in yourself. I.e., pay for college so that you can increase your future earning potential.

That will basically cover your medical bills, physical therapy and maybe a replacment car.

Remember – medical insurance isn’t a charity and medical bills are extremely expensive. They will want a cut of the money.

I had a car accident in hs and got a settlement.

For me, best option is to a) pay for higher level education based on your goals and b) put the fucking rest of it in a retirement account.

Let it run 50 years and you’ll never have to worry about retirement.

YMMV. I’m lucky in my upbringing and supportive parents. I didn’t get as much as you’re saying, but I didn’t put as much as I could have into retirement and I had an active adviser (parents friend) pulling % yearly fee from it and doing shitty with it during 2008 financial crisis. Had it just been in a passive broad etf I’d be so much better off today.

If they were to get you 300k, 100k would go to your doctors, 100k to your attorney. You would only keep 100k. What degree are you planning on studying?

You’re being compensated for actual loss, like your car and medical expenses, and lost potential, like money you might not be able to make working, and some for having to endure it all. That isn’t enough to live on for life at 20; maybe if you were 60 and had other things coming like Medicare and social security or other retirement savings.

You probably have a good 50-60 years left to live, and paying for that with a half million dollars isn’t going to let you just retire on that money and any interest it could gain or any gains it can make. At a 10% gain, which is a pretty good return, that might net around $50K a year. Even if that sounds like enough, if you spend that, your portfolio won’t grow, and it eventually won’t be enough.

If you’re looking to avoid working in someone else’s company, you could use that as a way to start running your own business. Not sure what you’re interested in or willing to do, but you can set up a good food truck, maybe start a coffee house, or buy a bunch of materials and tools and build things to sell. You can start a coffee shop or food truck for less than $100K, with some luck and frugal sourcing, and even hire help when it gets going, but the days can start early, can run long, and competition can be fierce.

Education is probably the best option for that money. Even if you don’t study in a field for building a career, you can take the classes or go to conferences and learn about how to manage your own money.

You can use the money to learn how to make things like software and set up a decent home lab, make apps or web content, and sell that. You might not be the next Nintendo, but maybe the next Flappy Bird. Then, of course, you’re working for all your customers, but you get to be the boss.

Find a financial planner and invest a bunch of it in a diversified portfolio that offers some security and growth. Make sure you hire a true fudiciary, so their goal is to make you money instead of making them money. Also, use some of it for school, and maybe a stipend to avoid debt. You’ll have to work in the meantime, but maybe this gives you some opportunities others don’t have to find jobs that don’t suck, especially if you’re doing some education and find a job that brings you joy.

After a while, maybe you can grow that investment to a level of money that makes enough money to live off the gains and returns. That number is closer to a couple or few million for most people, where you can take some of the returns to live on, and the rest is reinvested to grow enough to stay in line with inflation. How much depends on your spending more than almost anything.

Your lawyer will get a big cut of that most likely.

Also keep in mind the medical costs and complications you will have from your accident moving forward. That will be expensive and depending on the terms of the settlement, it may or not be covered moving forward or 10 years down the road.

Make sure you have enough money set aside to care for yourself.

Otherwise, buy a reasonable and reliable car (like a Honda or Toyota or something) so you can get to work / school / college, keep some money for yourself for just costs of living, and invest in an index fund (I like QQQ and VOO) and let it sit for 10 years

As someone who had spinal injury at 19 and deals with it 34 years later still. That money is earned. Make sure you keep in shape and your muscles worked and strong

Invest it. Live as though you don’t have it. You have just secured a retirement. If you ever need it for the right reasons, take a private loan and use your investment as collateral. Your investment will grow faster than the interest on the loan.

Just invest it and continue your life as a normal person. Congratulations on having a retirement, 90% of USA citizens don’t/won’t.

I think you’ll figure out your answers if you approach it like its not there for now. You dont know how much money youll actually end up with yet, or how much of it will have to go towards things like associated fees and bills and taxes, so planning for how to use it this early on is like planning a graduation party for someone that isnt even in high school yet.

When you get the settlement, immediately calculate how much will need to be paid on it in federal and state income taxes.

Either get two HYSA accounts, or one that lets you allocate the money into different “buckets” (Ally has this feature, idk how common it is). Put the tax amount into one account/bucket and the remainder into the other. Now all your money can gain interest while still being accessible.

Don’t touch the tax amount until its time to pay taxes. 

Let the dust settle for a few months while you figure out what needs to be paid out. Then come back to reddit when you have your money that you know is yours, and seek advice thats more concrete 👍