I’m 18 And Received $700k From My Grandparents, But My Stepfather Is Awful

I recently ran across a sad message on Reddit. It was written by an 18-year-old who logged onto the AITA forum to ask if she was doing the right thing regarding a large inheritance she recently received from her paternal grandparents.

Background

The original poster says she was her grandparents’ only living descendant and sole beneficiary. Upon their death, she became the owner of a four-bedroom home in Boston and a two-bedroom vacation house in California. She also received $700,000 worth of savings, investments, and other assets.

While the young woman’s father and grandparents were American, her mother, stepfather, and stepsiblings are British, and she has dual citizenship. She continues to live with her family, including her mother, stepdad, three stepsiblings, and two half-siblings. Two years ago, the stepfather was arrested for “something awful,” and money has been tight for the family since. They were evicted from their home and moved into a 2-bedroom council apartment (public housing for low-income individuals).

The family gets involved

According to the poster, once the inheritance became a reality, her family began making financial requests. The young woman admits that her heart is not in it. She points to two specific issues: The belief that her stepfather ostracized her for being mixed race while growing up, and the resentment she feels that her mother forced her to get two minimum wage jobs while she was in high school and studying for exams. She says that her stepsister dropped out of school and is allowed to stay home all day.

While she promised to help buy groceries and pay for a better apartment, the poster says her family has asked her to sell the property in the U.S. and use the proceeds to buy a house in England for the family to live in. They’ve also requested a second home for her older stepsister and son.

What she wants to do

I kept having to remind myself that the original poster is only 18 and dealing with decidedly adult issues. Her Reddit message outlines her dreams for the money. She wants to pay for a university education (excellent), travel the world (okay), and open a cat café (gulp).

My advice

If I were sitting across from the original poster, this is what I would tell her:

• Take your sweet time: You need time to consider what you want your life to be like in 10, 20, or 30 years. At 18, it isn’t easy to imagine that you might ever get married, have children, move to another country, or (heaven forbid) be old enough to retire. And yet, those are the very experiences you’ll need money to fund.
• Consult professionals: If anyone ever needed the guidance of an experienced financial advisor, it’s you. You will need help deciding what to do with the two valuable properties left to you. You need someone to help you determine how much you’re willing to share with your family, and then you’ll need someone to help you stick to your guns.
• Find a place of her own to live (if needed): If you no longer feel safe at home, now is the time to find a new place to live. If you’re already enrolled in university (or soon will be), that may provide the ideal solution.
• Avoid debt like the plague: There’s a good reason wealthy people go bankrupt. They leverage and spend more than they have. $700,000 may seem like a fortune to you, but given what you’ve said you’d like to do with it, it wouldn’t be hard to spend most or all of the entire inheritance in a few years.
• Do not open a business: A startling number of cafés and restaurants go out of business in the first year; at 18, a cat café could be an albatross around your neck. That’s not to say you should give up on the dream entirely, but why not wait until you’re a bit older, better educated, and more experienced to dive into something so labor-intensive and risky?
• Have a will drawn up: You may be young, but you have a portfolio of impressive assets. Just in case something happens to you, work with an attorney to draw up a will spelling out where you want the money to go after your death.
• Begin investing: As a teenager, imagining yourself as an older adult itching to retire may be impossible. Still, that day will come. When it does, you’ll thank yourself for starting your investment journey at 18. The earlier you begin to invest, the more time compound interest has to grow your nest egg.

This table shows what would happen if you put as little as $1,000 a month into an investment vehicle earning an average annual return of 7%.

If you begin investing $1,000/month at age…	You could have this much at age 65
18	$3,950,693
25	$2,395,621
35	$1,133,529
45	$491,946
55	$165,797

And one extra thought to tuck away as you decide what to do with the money. Let’s say you invested $500,000 of the money left by your grandparents. If it’s invested in an asset earning an average annual return of 7%, it would be worth $4,357,635 by age 50.

Based on your post, you seem like a very bright young adult. However, according to science, your prefrontal cortex (the part of the brain responsible for functions like planning, impulse control, and decision-making) won’t fully develop until you’re around 25. It’s okay to give yourself the time needed to make the most of your inheritance.

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