Reader Mail: "The Economy Screwed my $195k Inheritance."
You know that joke - "Do you wanna hertz donut?" - where you answer "Yes" and then get punched in the arm? Well, that's what came to mind when reading today's email about a $195k inheritance getting knocked down to $95k - "Hurts Don't it?"As I do for all my blogalicious readers w/ crazy conundrums, today we shall feature an email along w/ my un-spellchecked and top of the brain answering skillz.
Well okay, there's definitely more thought and time that went into it than that, but you get the point - I just copied and pasted my answer here instead of tweaking it up to be blog-presentable. But that's okay, right? You're not reading the NY Fabulous Times up in here or anything. You're on a blog w/ "sexy" in the title for goodness sakes ;) But enough rambling, on to the show!
How would you advise a 20 year old girl that had $195,000 invested (inheritance) last year, only to be screwed by the economy and now has only $95,000? Should I keep it in there?? My stocks are spread evenly throughout, I don't belong to just one particular company.RE: Investing - Yes, I'd totally keep that money invested, ESP while things are so low right now and you have *plenty* of time to earn it all back and THEN some. As the saying goes, "buy low, sell high". If you quit now, you've lost the rest and you'll probably want to get back in again down the road when all is "normal" again and the prices are high. Of course, no one can say for certain it'll get back up there, but history shows it will - and i bank on that.
I also get a check from my mom's SS for $1,400 a month. After bills, I'm left with around $800 or so. I have no job, as I can't work right now because I go back and forth to [edited] all the time. Long-distance relationships can be a B-word sometimes.. I'd love to find work online, though.
I ALSO hope to be getting this woman's full policy, 100k, for a car accident I was in 2 years ago. IF I get the full amount, I'll have about 50k left AFTER fees and medical bills.
Please, send me advice!
Nevada Queen
That being said, what I would do is meet with a financial adviser and see which investments would work with what you want out of it. They may tell you stuff you already know, or they could even suck balls, but even so it may help you sleep better at night. I'd check around your friends and ask for references and then set up a meet & greet with one (which should be totally free btw) and see what they say. I'd happily spend a few thousand over time if it means earning much more in the long run, ya know? just make sure to go w/ someone you trust and makes you feel comfortable.
And if you DO get that extra $50k from that accident? Then having a plan ready to go for it will do you nicely. and that's something a planner can help you with.
RE: Online work - Have you thought about blogging? if you're passionate about it, you could start earning a little somethin' somethin' on the side from doing that. It always takes more work than people think, but it's def. do-able, esp if you don't have a 9-5 gig. If you don't like writing, maybe try picture blogging or celebrity bashing ;) haha....or celebrity loving for that matter. anyways, the point is - if you can learn how to navigate the online world, you can then use that for future jobs down the road, not just for blogging. Learn Twitter, Facebook, Flickr, online marketing, etc. it's all fun stuff and won't bore you to death.
I hope this helps! Keep in mind I'm no sexpert, so don't punch me in the face if anything goes awry from any of this ;) And keep us updated - we love hearing how this stuff turns out! How about you guys out there? Have anything to add to this?
Labels: advice, blogging, crazy economy, financial advisor, in the real world, inheritance, reader mail
posted by J. Money at
7:31 AM
16 Comments:
Sounds like she is a 20 year old woman (not a "girl") who is worried about how she is going to live without having to work. That's a bad attitude to start adult life with. (In the old days, that would be called being a "lazy bum.") She needs to leave the inheritance alone and concentrate on finding a job.
"I'd love to find work online, though." That's hilarious. Can you say "work without really working?"
I have a bad story about an inheritance, too. It's the story I can't bring myself to tell... yet. I will, when I'm ready, when I can. I don't know when it will be, but it will show up on my blog. It's so painful, I almost couldn't even read this blog post. I had to peek at it with one eye covered.
I agree. She needs to forget that money even exists. I wouldn't touch a single penny of it for a long, long time. Get a job, no matter how basic and start living the life of a 20 year old.
If you are fortunate enough to get another windfall, blow a small percentage of it on something and put away the rest. Again, just forget about it!
Whatever you do don't live of this money while chasing some online dream! I love chasing the online dream, but only when and where you can afford it!
Good luck!
Grow up and get a job.....I mean come on, the rest of us in this world have had relationships (even long distance) and work. To say you "can't" work right now makes me just mad.
Did she seriously say that she can't work because of an LDR? Love is important, honey, but so is keeping a roof over your head and food in your tummy. Lordy.
Stop worrying about living off someone else's money and make some of your own.
Yup- be grateful you got any inheritance at all. Too bad you put it in the stock market, but if you need it now or within the next 5 years its your own fault for putting it in there when you need it. If you don't need it now (and you shouldn't, since you are still young) then leave it in there and it should come back... (Oh, and maybe stop whining since there are people who are close to retirement who lost money and/or whose pensions lost money and/or whose companies went bankrupt or laid them off because of the economy--- those are the people that really got screwed by the economy!)
And I'm sorry, but you are left with $800 a month spending money! For one person??? Why do you even need this inherited money, $800 spending money is way way way more than most reasonable single people need to spend in a month if you are at all sensible about money!
Sorry, but come on!
wowwww......lots of haters up in here today...I appreciate all the comments (and hope they help to whatever degree needed), but more importantly, what would you do if your retirement money got cut by $100 Gs? Would you continue investing? Would it be smart to talk w/ an advisor or just continue moving forward as normal?
it's easy to pass judgement on someone we don't know all that well, but I feel like coming up with more productive suggestions is key here. after all, she's reaching out for help here, not to be told to just "get a job"...
I think she is being told to get a job because she treated her LDR as a reason for not working, ugh.
The best advice was what Baker said: Pretend you didn't lose $100,000 because it doesn't exist. Work. Act like a normal 20 year old. In 10 years when the market has grown and you are settling down, open your eyes.
You will have a nice sized inheritance. Perhaps it will buy you a house or a nice 529 plan for your child's education.
Don't touch it. Repeat... Don't touch it.
This probably isn't a popular thing to say, but I suggest she take her own financial education more into her own hands. She should start reading personal finance books free at the library so she can better understand the consequences of each option she considers. The fact that she is asking you might be a clue to how much or how little she already knows about money management. I recommend more financial education! Otherwise it's just someone blindly taking someone else's advice and that's not good...
But if it's blind advice she wants, I would rebalance the 100k she has left to sit in conservative div-paying stocks for monthly cashflow, redirected into moneymarkets for secure interest payments. But even to do that she's gonna have to know more about those stocks, etc. I say this in a totally helpful way. I think learning about it can be very empowering.
She has her whole life ahead of her.
If she just leaves it I'm sure most of it will come back in a few years.
I have to admit, I'm finding it difficult to relate to her 'dilemmas'
I'm envious that she only lost ~50%. I'm down 70% and I'm nearly twice her age.
This was my e-mail, so I'm going to reply and pick the cream of the crop of comments here.
Let's start with the "grow up and getting a job" comments. Yup, you're right, but in my current state I literally CANNOT get a job, because of my car accident, which I had mentioned. You don't know how that affected my body, nor my life, so please don't put the "ass" and assumption.
This is why I asked advice about online work, ToughMoneyLove. Because I DO give a damn about my money and getting educated, and I DON'T want to fritter it away. I want to do SOMETHING right now so I can save, since I live with my dad, and I don't need to pay rent. But I CANNOT work, and I know that preserving the fortune of no bills right now is extreme luck, so I figured I could take a route where I don't have to stand on my feet or move about, because I can't. So thanks.
Second of all.. I'm having difficulty understanding (must be my immature and deluded 20 year old brain) how exactly I am somehow ungrateful over this inheritance? I know DAMN well there are people out there who lost EVERYTHING, many right on the cusp of retirement. I DO feel fortunate that I am young enough to recoup my losses. And yes, I also know to not touch it at all, ever. Half the time I even forget it's there, which is why I was so shocked when I saw such a huge chunk of it drawn and quartered by the economy.
I'm trying not to screw up with what I have left here, hence the e-mail to J Money (also hey, where's my poker? :P) in the first place, and allowed him to post it here for, like he said, advice and support.
"We are giving you advice!" No. A handful of you are absolutely belittling me. You're not giving me advice, you're looking down on me as a little girl who needs to suck it up. You may think I need a reality check and a good shake, but I do know how to propel common sense and figured an anonymous group of people could serve me up some decent, neutral financial advice since.
The other half? Thanks for the love and advice. It's considered and appreciated more than you know.
And lastly, about my relationship? Wooooow, below the line. Don't even dare go there. You have absolutely no right to comment on that, regardless of my age and how typical or clouded you may think my judgment is. My car accident is the main reason I cannot work, and being with him is the only joy I get at the moment. Then once everything is settled, my injuries sustained from my crash are better, and I have my ducks in a row, I will move and start my life as "a normal 20 year old".
So please, can you offer me something of substance rather than disrespect?
But hey, if that's too much to ask, then I'll take 100 lousy comments and stabs to my person, as long as I can at least get one good, decent one (besides J's of course) with some hearty advice.
I don't believe that this woman should be keeping the money in stocks.
Stocks are today selling at reasonable prices. So in 10 years she will probably have earned a decent return. But we are living today in the wake of the most out-of-control bull in U.S. history. That means that the odds are good that we are going to see another 50 percent price crash in coming years.
Some of us are emotionally prepared to take another 50 percent hit (because we were going with low stock allocations when prices were insane). Some of us are not (because we have already taken huge hits). If you are not emotionally prepared for another 50 percent crash, stocks are not the place for you today, in my view.
After the 50 percent crash, stocks will offer even juicier long-term returns and the risk of a big price drop from those price levels will be something close to nil.
Rob
@ Nevada Queen
It sounds like you've experienced a lot in your young age. First, I want to commend you for investing the money. I know the outcome was not as expected, but I've been witness to other younger people that have inherited a good chunk of money only to squander it away on absolutely nothing.
I don't know what you are exactly investing in, but if they are good quality investments, I would suggest leaving as is. Now I say "good quality investments" loosely here, because it's all subject to interpretation. I would say that for a beginning investor, I'm not sure that that was the best place for you start. Anybody that is a beginner to investing I have them ease their way into the market (Dollar Cost Average). It allows you to get your feet wet, to see if it's the right place for you. That's all behind us now, but something to consider going forward.
With the $50k that you may get, I would condsider staying more liquid i.e. CD's, short term bonds, etc. You already have plenty in the market as is, and don't need any more exposure.
If you have your bills covered and finding a job is not an option because of your injuries, you should try blogging. Don't expect to make much (or anything at all), but using the web to network while you recover may land you something unexpected. I've made plenty of great contacts via the web, blog, twitter. Good luck!
Hi Christina,
First off, I'm sorry for your loss (the reason for the inheritance). That's tough, and you were smart to 'do the right thing' with it afterward. Secondly, I'm sorry that on top of that loss, you were injured in an accident. It's great that you are keeping your head up and looking for ways to be financially solvent in these tough years of your life--you're so young to be going through all this. :(
Thanks for writing more and clearing some of the misconceptions up. From the first email, it really sounded like you weren't getting a job because you had to travel to see your significant other, and the car accident wasn't mentioned as the reason for not getting a job right now. I think people were confused.
I'd leave your $$ where it is for now and start reading up about investments--return rates, fees, load funds, etc. Don't be afraid of checking out Money or Investing for Dummies from the library (not an insult--that's how I learned!). Or if you can't get to the library, see if Dad or your significant other will. Or just look online for info--there's tons.
Once you get a clear handle on what the lowest fees are, best return rates, etc., start comparing your own investments to them, your rates of returns, your fees, etc. Basically, get to where you can feel confident about where your money is living, what it's making, and how much it costs for it to live there. THEN, if you find other funds or investments that sound better than your own, you can make changes. But only after you are comfortable with the process and know what you are doing.
You say you have $800 spending money--are you putting some of that away somewhere? Do you hope to recover from the accident? What are your future plans? Start saving up now, get in the habit.
For online work, there's a ton of legit sites out there--check out MSN's Women in Red message board and search there, or post to the forum and explain your situation--they'd all be willing to help. There's ChaCha, several survey sites, blogging, tutoring online, sites where you write ads and get paid a few cents per word...
Good Luck!
Blow it all. Have fun and live. Never know when your makers going to come.
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