My Mom Left Me $1.4m And After Paying Off Debt Don’t Know What To Do Next

Recently, a woman posted on Reddit, asking for financial advice. The poster said she inherited $1.4 million when her mother died. She described herself as middle-class, admitting she’s usually good with money but unsure how to handle so much of it.

Although she reached out for help, the woman is clearly on the right path. Here are the two ways she plans to spend the money:

• Pay off all family debt, including a mortgage and car loan
• Build her emergency fund significantly

Achieving these goals will cost the poster less than $100,000, leaving her with $1.3 million.  

Here are my answers to questions she posed:

Should I leave the rest of the money in an investment account?

It’s definitely an option. An investment account is a great way to build wealth. Let’s say you invest that $1.3 million in an account earning an average annual return of 7%. Here’s how much it will be worth at different points in your life, even if you never add another penny:

In this many years…	Your account could be worth:
10	$2,557,297
15	$3,586,741
20	$5,030,590
25	$7,055,662
30	$9,895,932

Your post doesn’t say how old you are, but no matter how you slice it, investing $1.3 million today could leave you with quite a nest egg by the time you retire.

Should I use the same financial advisor as my parents did? He’s nice but not a fiduciary.

While it sounds as though your parents were satisfied with their financial advisor, it’s important that you work with someone who fits your specific needs. It may be him, but it’s okay to look around just in case you’d be happier elsewhere.

You mention that your parents’ financial advisor is not a fiduciary. The question is, why not?  Is it because he earns commissions from selling financial products – products that may or may not be in your best interest? A fiduciary is legally required to act in your best interest rather than their own. They are expected to demonstrate a high level of care and honesty and do everything possible to avoid conflicts of interest. Given the amount of money you have on the line, you’ll need to decide how important it is to work with an advisor whose interest is focused solely on your financial success.

Other options

What may be most confusing right now is the sheer number of options from which you have to choose. While it’s a good problem to have, it can also be overwhelming. Take your time to think about what you want and how the money can best help you meet your goals. Here are a handful of idea you may not have considered:

• Education: Whether you’d love to go back to school or want to help someone else meet their educational goals, school can be a great investment in the future. 
• Charitable giving: Contributing money to a cause you care about will not only make you feel good, but it can provide a sweet tax benefit. 
• Home improvement: If your home needs repairs or sprucing up, you now have the money to do it. By carefully choosing the right projects and spending only what’s necessary, you can increase the value of your home without stressing about debt.  
• Experiences: While it’s essential to be responsible with the funds left you by your mother, using a small portion to take a trip, see a concert, or have some other memorable experience can add color to your life and create lasting memories. 

You’ve prioritized getting rid of debt and building a hearty emergency fund. Just as importantly, you appear to be making carefully considered decisions. In your post, you say your mother wanted you to be cared for. It’s fair to assume Mom would be pleased with your decisions thus far.

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