.png)
German (DE) 
English (US) 
Spanish (ES) 
French (FR) 
Hindi (IN) 
Italian (IT) 
Russian (RU) Marc Guberti
Thu, Apr 24, 2025, 10:04 AM 4 min read
The windfall from an inheritance can lead to promising opportunities or offer a fresh start for someone who is deep in debt. However, if you don't know how to use an inheritance correctly, you can end up losing the funds.
It's always great to get an inheritance, but it requires a lot of responsibility to manage the money and allow it to grow over time. That's why a 23-year-old turned to Reddit after receiving a $50,000 inheritance.
"How should I invest it?" the Redditor asked.
Don't Miss:
-
‘Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. You can invest today for just $0.26/share with a $1000 minimum.
-
Are you rich? Here’s what Americans think you need to be considered wealthy.
The individual wants to know the best ways to invest the money and intends to let it compound for at least 10 years. Fellow Redditors jumped into the comments to offer their suggestions.
One commenter suggested that the Redditor put the money into a high-yield savings account. Some of these accounts yield more than 4% APY, and if you look for online banks, it gets even easier to find that type of yield.
These accounts come with no risk since you cannot lose principal. However, these accounts can underperform inflation, and you might miss out on better investing opportunities. Furthermore, interest income is treated as ordinary income, so the real return on your savings account will be less than the posted APY.
While the 23-year-old might earn higher returns with an index fund, a high-yield savings account gives them time to think about where to put the money. If you ask Reddit about what to do with a $50,000 inheritance, you shouldn't rush to make a decision. While there was great advice, it's best to take things slowly when you receive a significant windfall and don't have much investing experience.
Trending: The secret weapon in billionaire investor portfolios that you almost certainly don't own yet. See which asset class has outpaced the S&P 500 (1995-2024) – and with near-zero correlation.
The same Redditor who suggested a high-yield savings account also recommended contributing to a Roth IRA. The 23-year-old has enough money to contribute to a Roth IRA for the next seven years thanks to the inheritance.
Granted, the Redditor can contribute some of their own paychecks into a Roth IRA and put the inheritance money in a brokerage account. This approach, if the Redditor believes it's right for them, would allow the individual to invest more than $7,000 per year.
Comments