Ask HN: How do I handle a $Ms windfall for the short term? | Hacker News Reader

Ask HN: How do I handle a $Ms windfall for the short term?

3 pointsmoneyanoney8 comments

I’m coming into a low $Ms windfall from a personal investment and am looking for advice on how to handle the receipt and management of these funds for the short term.

This is the first time I’ve ever come into this kind of money, and want to take ~6 months to cool down and shore up my financial intelligence before making any moves. I’m deathly afraid of fucking up, and losing it all.

How do I handle the wiring process — send it all to one account? And how do I hold this money safely for the short term — multiple high-yield savings accounts, treasuries, money market, etc?

Any advice and stories of your own experiences would be greatly appreciated.

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Here are places to start:

* the r/FatFIRE subreddit - many people have asked variants of the same question: https://www.reddit.com/r/fatFIRE/comments/hf99ez/large_inher... . The r/personalfinance “windfall” page comes up occasionally: https://www.reddit.com/r/personalfinance/wiki/windfall/ (it links to lots more similar questions).

* Past HN submission: https://news.ycombinator.com/item?id=18600220

* If you don’t have any experience at all, you may want to start with an hourly financial planner who is also a fiduciary: https://www.napfa.org/find-an-advisor?q=&exp=Fee+Structure%3... (note: the “Hourly” filter is checked), https://www.napfa.org/financial-planning/fiduciary-101, https://www.forbes.com/sites/baldwin/2019/10/13/hourly-plann.... They’ll help you answer these questions and charge an hourly fee, much like an attorney would.

(The best-insured place to park it would be a bank/brokerage with multi-bank sweep account, like Fidelity’s FDIC-Insured Sweep: https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBa.... However, talk with a professional first.)

Thanks. I’ve been digging into both those subreddits quite extensively for a couple weeks. Tons of great info, but nothing I’ve found that walks me through the uber elementary and practical steps of receiving and holding that money for the short term. Like when I’m asked for wire instructions, where do I have them send the money?

I’ll see if I can get some time with a financial planner, but would love to learn how others here have handled it, and if there are any “best practices.”

Sure. Sign up for https://www.fidelity.com/cash-management/faqs-cash-managemen... and Fidelity will give you a routing and bank account number. As long as you choose Fidelity FDIC-Insured Sweep as your sweep (uninvested cash) account, it’ll be there until you decide what to do with it.

Yeah, some preliminary research on Insured Sweep after your first comment suggests this may be a good way to go. Much appreciated.

Any quick thoughts on parking it in a TIPS ETF?

It shouldn’t be there long enough for yield to matter, so I don’t know why one would take on that complexity. Step 1, put it somewhere absolutely safe and fairly simple. Step 2, talk to someone and decide what to do with it longer term (which probably won’t be bank deposit or TIPS).

In step 1, the goal isn’t to keep pace with inflation because, for the few months required to do step 2, inflation doesn’t matter.

(My meta-comment is: spend the time you’d spend reading r/FatFIRE or asking HN on finding and talking with a planner instead. I assumed you just found out because, if it’s already been a few weeks, there’s no reason to still have this question. I don’t mean to offend you, but: a few hours with a professional who knows your specific situation will be more helpful than anything you’ll find online.)

Do not trust anyone. Including your relationships and spouse.

Make three lists of items - things you will want for yourself rest of the life, things you need to live, and things you want to invest for the time after you. Examples for each list: a good house in a good place, a set of low risk investments that will give you 250k p.a. perpetually, invest in a durable enterprise that will outlast you.

Then go about living as if nothing had happened.

When it comes to investment, choose boring non-exclusivist models. Aka. avoid maddoxes.

Thanks, appreciate the advice. I’ve got initial allocations outlined for things like debt, expenses, runway, etc, most of which are straightforward. The biggest and riskiest allocation is for “investment” and the one I’m looking for advice on where to store for the time being until I’m ready emotionally and analytically.

I'm very happy with my investment advisor at Edward Jones. He is based in San Francisco. Ping me if you want his contact info.

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