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New Inheritance

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oldnostache:
Im a 30 year old who has been semi-mustachian probably since birth and stumbled on to this site and was impressed with peoples insight/knowledge. I have grown my own $100,000 mustache over the past 5 years (in retirement accounts) after traveling around for a few years after college. I recently inherited about $500,000 unexpectedly (my grandpa had a millionaire next door stache). I was wondering if anyone had thoughts on how best to invest this money. With currently very high valuations on US stocks I was considering foreign stocks and just tricking in 10-15 thousand a month into vanguard equity funds.

I am fairly risk averse knowing that even with relatively low returns i can reach Fire in 5 years (im paranoid and basing on $20,000 expenses and a 2.5% extra safe withdrawal rate). Should i just jump in, consider other investment combo's or dollar cost average into the market while reinvesting dividends? Any thoughts?

nara:
We were in the same position (same inheritance amount) 3 years ago. We are also nearing FIRE because of this boost, so I am curious what advice others may give you.

I think in comparison studies of "timing the market" to dumping everything at once has shown that that exposing your money to the market asap creates the greatest gains. I was given the Boglehead's link to how to handle a windfall when we first got the inheritance. We put 50% down on our first home and put the rest into a one year CD (as Boglehead's windfall guide suggests just sitting on the money for a year!) This turned out to be my biggest regret. If you are not at risk of at all of being an idiot with your money, putting it into a Vanguard managed account asap is what I wish we had done right away. They will build you a retirement plan based on your retirement date and risk aversiveness and the fees are very low.

ysette9:
Some reading I recommend

https://www.bogleheads.org/wiki/Managing_a_windfall

https://investor.vanguard.com/investing/online-trading/invest-lump-sum

I think you should really dig into the research of safe withdrawal rates. Plenty of good reading from Kitces, Pfau, and bloggers like the mad fientist. https://www.madfientist.com/safe-withdrawal-rate/
In short, 4% is very conservative. 3% is prepper/guns and ammo in a bunker/never failed historically/ overly conservative. 2.5% is plain absurd. If you think events will be so bad as to not support a 3% withdrawal rate then financial investment performance is probably the least of your worries.

But read the research so you know and understand that rather than just do what some random people on the Internet say.

oldnostache:
Some good advice and appreciate all the input. Im going to read through all the links and more financial sites. Currently thinking of dumping half in vanguard funds and sitting on the rest for 6 months and see if/how i can manage any fluctuations mentally. Does anyone have any tricks to mentally disconnect from the market (bull, bear or boring)?

oldnostache:
As for the withdrawal rate, maybe i do have a few too many tin foil hats (joking....kinda). I just recognize the data is taken from roughly the last 100 years of US data which represents one of the greatest success periods for an individual country ever including a long period when due to WWII we were the only developed country not devastated but the war and boomed accordingly. Other reasons are due to demographics in the developed markets, negative real interest rates (interest - inflation) as far as the eye can see, staggering unsustainable Gov't dept, Pension Funding Crisis and that Warren Buffet possibly the most successful investor ever can't find anything to buy.

^^Sorry for the rant; not trying to pick a fight/argument just hoping you see where i'm coming from and would love any insight to lean me the other way as i know i am probably wrong given a long time line.

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