girlfriend recieved $50,000 cash and wants advice on what to do with it

[MikeJones2001]

She is a 30 years old and starts a new job tomorrow making around 62,000. The company has a 401k and a match

She has no debt, no car payment and she rents right now.

Her net worth is around 60,000.
She has $3000 in a roth that is not maxed out this year. And she has around $4000 in an old employer 403b.
She has about $10,000 in a regular savings account.

We are planning to get married in October and rent an apartment.

What advice would yall give to her as far as this new $50,000 that she has received? I told her to max her roth and open up a brokerage account and dump the rest of the money in that.

She wants to use this windfall help jump start growing her net worth.
She wants to work for at least another 20 to 25 years if possible.

[getmoneyeatpizza]

Follow the investment order: https://forum.mrmoneymustache.com/investor-alley/investment-order/

Max 401k for the year and max an IRA. Then January 1, 2022 max the 2022 IRA. At this point she'll have 18500 left so then max out the 2022 401k. An HSA too if available.

If are saving enough where you can enough contribute a portion the 401k without recycled money then the rest can go to taxable.

[dandarc]

Should have pointed you to "how to write a case study": https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

In particular the link to the case study spreadsheet - filling that thing out in detail is a great exercise for getting a handle on your spending, running tax scenarios, etc. This is also the first post I've seen from you indicating marriage is imminent - have y'all had a discussion about how you're going to handle finances as a household?

There's the big picture "agreeing on how to handle finances is very important for your relationship", and also even if you're going to continue with more or less separate finances, for things like taxes you're married and various options you might select have a bearing on what constitutes sound advice.

Example: in general, "contribute to an IRA" is damn good advice, but if you're married and decide to file separately, then to contribute to a Roth IRA, you're probably going to need to use the back-door technique, and unless income is very low a traditional IRA contribution just won't be deductible for you. And unless your plans fall through, you will both be married as far as the IRS is concerned for 2021.

You'll get better advice the more detail you develop and share.

[MikeJones2001]

Should have pointed you to "how to write a case study": https://forum.mrmoneymustache.com/case-studies/how-to-write-a-'case-study'-topic/

In particular the link to the case study spreadsheet - filling that thing out in detail is a great exercise for getting a handle on your spending, running tax scenarios, etc. This is also the first post I've seen from you indicating marriage is imminent - have y'all had a discussion about how you're going to handle finances as a household?

There's the big picture "agreeing on how to handle finances is very important for your relationship", and also even if you're going to continue with more or less separate finances, for things like taxes you're married and various options you might select have a bearing on what constitutes sound advice.

Example: in general, "contribute to an IRA" is damn good advice, but if you're married and decide to file separately, then to contribute to a Roth IRA, you're probably going to need to use the back-door technique, and unless income is very low a traditional IRA contribution just won't be deductible for you. And unless your plans fall through, you will both be married as far as the IRS is concerned for 2021.

You'll get better advice the more detail you develop and share.

thanks dandarc. I appreciate the response. Rookie mistake on my part

[Smokystache]

Sounds like she has her head on straight - no car debt, no CC debt, no student loan debt at 30? She's ahead of 95% of 30 year-olds.

The only other thing I'd suggest is running a few calculations on what these investments will grow to in 20-25 years. Let's make this very clear and concrete. She may think she was given $50k, but she was really given $XXX,XXX - and all she has to do is not touch it. I consider this preventative information for when her cousin comes to her with a "great opportunity" or her best friend wants her to "invest in my business idea". She was gifted resources that will turn into 6 or 7 figures (without any work on her part) - the one rule is that you can't touch it for a while. Let's not beat her over the head with this information, but it may help keep everyone on the same page and stay motivated to not touch it.

[MikeJones2001]

Sounds like she has her head on straight - no car debt, no CC debt, no student loan debt at 30? She's ahead of 95% of 30 year-olds.

The only other thing I'd suggest is running a few calculations on what these investments will grow to in 20-25 years. Let's make this very clear and concrete. She may think she was given $50k, but she was really given $XXX,XXX - and all she has to do is not touch it. I consider this preventative information for when her cousin comes to her with a "great opportunity" or her best friend wants her to "invest in my business idea". She was gifted resources that will turn into 6 or 7 figures (without any work on her part) - the one rule is that you can't touch it for a while. Let's not beat her over the head with this information, but it may help keep everyone on the same page and stay motivated to not touch it.

Great advice. I like your approach. My girlfriend is not totally on board with FIRE but she is starting to save now for the first time in her life.
I have encouraged her to save and invest for the last year or so and she has done well.