Join Date: May 2002
Location: Dreaming of the Bavarian Alps
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First of all, I'm sorry to hear about your loss. This is the worst way to come into some money.
The very first thing I would do is to put the money aside and really think before you do ANYTHING at all. Most financial planners would tell you to wait a whole year before touching it, but in your circumstances, I don't think that's reasonable.
I would suggest that you spend a lot of time reading some financial planning books. I always suggest the financial books "For Dummies" by Eric Tyson. Not because anyone is a dummy... they are really good books, written for the lay person. I refer back to them myself regularly.
About the financial planner. I hate to say this, but you may have a hard time finding someone to actually manage your money because it's really not that much compared to what they usually manage. I would definitely have a one-time session with one, though. Most financial planners have a minimum they will work with. Around here it's usually $1M, sometimes only half a million. They usually charge about 1/2 a percent to manage. Do a LOT of homework on financial planners before hiring one... there are some shady characters out there that are just rubbing their knuckles to have someone come through their door that is instantly richer and uninformed about finances. And don't trust the lawyer probating the will... they often will just suggest a friend and not someone necessarily reputable. Do your own searching for a financial planner. (The Managing Finances for Dummies book will explain in detail how to do this.)
Ditto on the car, what a pp said. We have a relatively high net worth and have *never* spent that kind of money on a car (and one of our cars is a nice Mercedes). Additionally, brand new cars depreciate by an average of 20% the minute you drive it off the lot. So one day after you own that new car, it's not a $30,000 car anymore, it's a $24,000 car. People who have money make it and keep it by making sound financial decisions... buying a new used car is one of the ways people who arrange their finances based on net worth keep their wealth. It must be hard to not want a nice car, but that money will be gone before you know it if you're not careful and if you make purchases like a $30k car.
The best thing to do, as I said above, is to just put the money aside. Live at least 6 months as you have been (of course if you are living in poverty, use some of the money so you're not miserable), and establish your financial goals FIRST... before spending a dime on any bling (and yes, that car would be bling). You have to think long-term rather than instant gratification. I know that can be hard when you perhaps feel like you've been deprived of something as simple as financial security.
An example of thinking long term: let's say you decide to buy a good, reliable car for $10,000 instead of the $30,000 you want right now. Over the course of 30 years, with that extra $20,000 invested in a safe, decent investment returning 7% to you annually, at the end of the 30 years, instead of having just $761,000 you'd have $914,000. That means that by simply making a financial decision to NOT spend $20,000 now, you are $153,000 richer in the end. This is how you have to think when it comes to finances. Not the now, but the tomorrow. You have to ask yourself not whether you want a $10,000 car or a $30,000 car, but if you want a $10,000 car or a $153,000 (which is what the $30,000 would cost you over time) car. Make sense?
It's like finding a new flat-screen TV on sale and putting it on a credit card you can't pay off. That TV wasn't a deal at only $1000 if after you pay all the interest on it, it actually cost you $2000. If you think in these terms it will help you enormously as you approach investing your money.
Good luck! Hope I didn't complicate things too much.