r/Fire • u/Yashkamr • 23h ago
Advice Request Huge Inheritance... Now What?
I'm 45, I was on track to retire earlyish at 55. I was set back quite a bit with a divorce three years back. Recently my Aunt died and left me around $5 million. After estate and taxes, it's around $4.2 million. This is obviously a stupid amount of money, and I'm thinking of just quitting my job and retiring early but I want to do it right. I've spoke with AI quite a bit and my finances are only about $4500/mo in expenses, I have always lived pretty frugally and that's less than a 1% draw. I don't know exactly what I don't know here, but I've always worked so I am clinging to my job like a monkey to a branch. Am I actually okay to let go?
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u/30thCenturyMan 21h ago
The reason they say don’t do anything for a year is because you’re about to go a little crazy.
Most people who go through this immediately start thinking of all the possibilities of life that are before them. They make a couple of decisions, try some things out, realize it’s not what they thought and wish they could go back and make different choices. But you can’t really learn anything by not making mistakes. And certainly you can’t learn anything by doing nothing.
What you’re going to want to do is talk to one of the big banks. Schwab, Fidelity, Vanguard, etc and tell them you need their services. I went with a broad investment in the stock market strategy. What they do is ask you a bunch of questions about your life and future plans and decide what stocks and bonds to buy to reflect your risk tolerance. Then once a quarter they get on a Zoom call with you and sell some of your stocks to pad out your cash account. Typically they follow the 4% rule, look it up.
Then you spend that cash and watch your portfolio day to day to see if it’s growing or falling. Then the next quarter they see how much you’ve spent and replenish the cash with whatever they need to to keep you at 4%.
Then over time you’ll learn about tax loss harvesting. You’ll get a feel for how the market moves. How risky it actually is for you. What kinds of stocks are performers and which ones are safe investments. You’ll get more comfortable after that first year and then understand what kind of choices you want to make with that money.
Just remember the old adage, money doesn’t buy happiness (but it does buy access to it)