My father passed away suddenly last Monday at just 43 and left me $75,000 in life insurance. I want to handle this responsibly and in a way that honors him—my goal is to grow it, not spend it.
I’m comfortable with basic investing and know the standard index fund route, but I’d appreciate guidance on how to diversify beyond that and build something long-term and meaningful with this money. Any thoughtful advice is welcome.
EDIT 1: Thanks for all the comments and condolences thus far. I wanted to add some information about myself because I have seen a few of the same questions. I have nothing invested currently, and have around $4000 in CC debt as well as around $13000 in student loans as I am a full-time student at a top public university in the USA. I typically stay unemployed during school and my plan is to become a medical doctor.
Posted by Peachy_Smooth
14 Comments
Sorry for your loss. Do you have a job? Make over 7k/year? If so you should immediately max a Roth IRA for 2026.
No need to diversify beyond index funds – they are extremely diverse. An index fund like VT represents essentially every public company and industry on the planet!
Depending on your current level I would consider opening a Roth IRA. You will be able to contribute $7500 a year (as of this year) into a retirement account where the earnings will be tax free as long as you wait until 59 1/2.
Perhaps combine that with a good emergency fund that represents 6 months of expenses.
If you’re employed and your employer happens to offer a decent match I’d contribute into that maybe more heavily to get a start on your career pre tax savings.
Lastly, depending on your area and cost of living, looking into buying a starter home may be possible/worth looking into.
>but I’d appreciate guidance on how to diversify beyond that
The entire point of index funds is diversification.
You can certainly learn to pick your own stocks that you think will outperform the indexes, but investing in individual stocks is kind of the opposite of diversification. (Not saying you shouldn’t do that. It’s how a lot of people become wealthy. But it’s higher risk and you need to understand a lot more than just picking an index fund.)
Are you currently maximizing Roth retirement options available to you? If not, investing this money with those future tax advantages is something to consider.
I’m sorry for the loss of your father. I was fortunate to have my dad until last year (his age 90).
Do you have a job with a 401k? Max that if you do.
And/or max a Roth IRA (as long as you’ve made at least $7500 in income).
Take a little of it and do something good now, something he’d want you to enjoy. Not a lot of it, but a little. Don’t want to forget to live some life too.
For the rest, invest in a brokerage account in a total market fund like VT (or VT).
You’ll have a giant start for your future.
Also be sure to keep some in cash, in a HYSA. So you have an emergency fund setup. 3-6months worth of expenses.
I’d put it into treasury bills and/or high yield savings account for the moment. Take some time to educate yourself about investing and come up with a long term strategy. Good place to start is the Prime Directive tab on the sidebar here.
Don’t underestimate the value of cash and liquid investments. This is a huge safety net at your age that can allow you flexibility to go to school, move across the country for work, etc. As you move along your path and become more savvy about investing you can transition to more long term investments.
Godspeed Dad.
Index fund. Leave alone.
The best investment you have now is your human capital. Getting a good education will set you up for life. You should use the $75K to help you get through college and medical school. Pay off your debts, invest the rest in a safe place where you can keep with inflation, and keep the rest as an emergency fund to help you get through school.
My dad’s a doctor, so I know this is not only tough on the career front but the personal front. This sucks, and I’d be gutted if my dad died when I was 22, so my deepest condolences.
There is no need to make a big decision right now. Keep it in cash or a high yield savings account. Maybe clear out the CC debt if it keeps you up at night, but you have PLENTY of time to make a bigger decision later.
What I will say is that it makes a lot of sense to pay off school loans as fast and aggressively as possible after residency. Treat your first two years of doctor pay like a pauper and live like a resident while getting out of debt. Two to three years of deferred gratification are nothing. Nothing. And save until it hurts until you’re 30.
That would make dad proud.
At your age. An index fund is all you need. You have the requisite time to invest it and forget it for 30 years, and the entire point of an index fund is that it offers ample diversification. VOO or VTI ought to do the trick.
I’d recommend paying off the CC debt. It’s unlikely you’d consistently earn a rate that’s higher than the interest rate you pay on that $4k.
So sorry for your loss. That is rough.
My advice:
1. Ignore any message requests you get now that you’ve told people you have money.
2. Pay off the debt. You’ll thank yourself later. If you’re looking to grow money, debt does the opposite.
3. Open a Roth IRA and contribute the max (assuming you have a job with at least $7,500 income)
4. Put the remainder into a HYSA for now.
5. Read up on investing and understand what your options could be.
6. At the start of next year, also contribute the max to your Roth IRA and start actioning any plan you developed from #5.
At your age, this kind of money can be turned into life changing money. Remember that patience is the investors single greatest attribute. I’m thinking of you and wishing you all the best.
So sorry for your loss, thats a huge weight to carry right now. 🥺 Def pay off that CC debt ASAP first, $4k at whatever interest rate that is will eat into your gains way faster than you think!
Something similar happened with my cousin and she used the money to fund school and stay relatively debt free. I think that is a good move.
However, if you want to use 10-15% for something fun that way you have a good memory or two to think on later that is ok too.
If you invest it and assuming a 7% annual return after inflation for 40 years would net you $1.1M just from that $75k alone.
I just want to say I am sorry for your loss but am also super proud of you! I wasted a $60k settlement around your age and it’s one of my biggest regrets. I wish I had had the maturity to think long-term. This is truly the best way to honor him. Done right, his financial gift to you will be able to help you for the rest of your life.