I (27f) recently won a settlement and have some money coming in, roughly $75k. This is will be the most money I have ever had, by a lot. Apart from my Roth I have never invested before. I only make $40k a year before taxes, and my work isn’t always consistent. I want something with low risk that is somewhat passive. I have a small piece of land I inherited, and I may want to invest some of the money into building a little house on it to boost land value, but that’s a couple years off, and I want to find a way to maximize (or at least not lose) the money while I wait for that time.
The things I’ve been looking into:
-Vanguard and fidelity money market funds
-SOFi/ALLY HYSA
-T-bills
-local credit union offering 5% interest when starting hysa account with 10k or more (I’ve read that smaller entities advertising big rates aren’t the most reliable long term)
I feel I understand the difference between all of these, but wondering if it would be best to split up the money into different types of accounts with different entities? Or for someone like me does it make sense to just put it all in a hysa and just wait.
Tl;dr: I don’t make much money, never have, never invested before, suddenly find myself with 75k and I want to know if it’s smart to split up my investments, or if it’s ok to put it all into a hysa for the sake of convenience.
I have no one in my life who knows about these things so anything helps 🙂
Windfall came in and I’m at a loss (figuratively)
byu/burning2018 ininvesting
Posted by burning2018
4 Comments
Try the wiki prime directive at r/personalfinance
One thing to consider is fully funding your ROTH now if you have not been doing so. Use the windfall to help you do that. For short term (less then two years), Money Market is going to probably be fine. I don’t see much reason to split it across accounts.
What I did in a similar situation was open a vanguard account and put most of it in an index fund that tracks a large portion of the stock market such as VTSAX. It’s relatively low risk and has given me returns that have mostly outpaced inflation pre2022. If you want to learn about investing, I’d start there and take like 5k as in a “gambling fund” to experiment with for other investments. Which has mostly worked out for me, with some ups and downs.
If you’re afraid of any risk, feel free to try the HYSA or T bills you mentioned in your post. Both are extremely safe and will provide at least some return on investment.
Also, yes, max out your retirement fund.
Those are all fine choices. Not much reason to split it up.