Latest / Becoming Financially Confident / I Inherited $20K and Grew It to $70K. Should I Keep Investing or Pay Bills?

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I Inherited $20K and Grew It to $70K. Should I Keep Investing or Pay Bills? · Becoming Financially Confident

• 0:00
  $20,000 turned into $70,000 thanks to stock advice from someone she isn't with anymore.
• 0:06
  Now she's got to decide what a windfall like this is actually for.
• 0:10
  And the first thing she needs to hear has nothing to do with the stock market.
• 0:14
  Going to be a great discussion today and make sure you stick out till the end.
• 0:18
  I've got a very special announcement of what's going to happen with the show starting tomorrow.
• 0:32
  Hey, friend.
• 0:33
  Ralph Estep Jr.
• 0:34
  Here.
• 0:34
  Welcome to the last day of financially confident Christian.
• 0:38
  We'll talk more about that in a little bit, but we're going to continue breaking that cycle of financial shame with confidence.
• 0:44
  And today we're talking about an inheritance that's tripled, a relationship that ended, and bills that are due right now.
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  It's that feeling of having money and still feeling stuck.
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  And it's more common than anybody admits.
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  So let's get right to today's listener question.
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  Listener writes this myth.
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  My aunt left me $20,000 last year, and I put it into the stock market based on advice from someone I was dating at the time.
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  That relationship is over now, but the money's still there.
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  And it actually grew to about $70,000.
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  Now.
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  Hold that thought.
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  20,000 to 70 in a year.
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  We're going to come back to that.
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  Part of me feels strange keeping it invested since the advice came from him.
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  Part of me needs money for bills.
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  What do I actually do with this now that it's mine to manage?
• 1:32
  What a great question.
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  And I want to come to that growth because that's part of this answer.
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  Here's the thing.
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  I want you to understand.
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  This was never his money.
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  And it isn't a moral question.
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  It's your money to manage.
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  And the real question isn't to invest it or spend it.
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  It's what job does each dollar have?
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  So today I'm going to give you five steps that's going to help you make that decision.
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  So here's the first step.
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  You got to separate the money from the man.
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  $20,000 came from your aunt and this dude was in the room.
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  That's all he was.
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  He was a dude in the room.
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  He gave you some advice.
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  But good advice doesn't become bad advice because the relationship ended.
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  So many people think, well, this person gave me that advice.
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  I got to throw it out.
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  Like the baby with the bathwater.
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  Bad choice.
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  But it doesn't obligate you to him either.
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  That relationship has ended.
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  I get it.
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  So don't make a $70,000 decision being reminded of someone here's the thing I want you to do practically this week.
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  Change the account passwords.
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  Remove any authorized users or shared access.
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  Update the beneficiary.
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  And if the account came through an advisor or his broker, move it.
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  It's really that simple.
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  Clean ownership on paper and is what's going to make it feel like yours.
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  Remember where the money came from, the origin of it.
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  It came from your aunt.
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  He was just there standing nearby.
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  It's your money.
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  But here's the second part.
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  Now I'm going to go into that 20 to 70 thing.
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  Find out what's actually you're selling and what it would actually cost.
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  You got to understand what you actually own if you had a $20,000 become $70,000.
• 3:14
  I'm worried that is a very concentrated investment and that runs risk in many direction.
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  The inherited money you had isn't taxable income.
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  You get what's called stepped up basis.
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  So whatever your aunt left you when you invested it, that is the basis.
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  But the growth of that is where you're going to pay taxes.
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  That is roughly $50,000 in gains.
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  Now if you've held it for more than a year, it's taxed differently than if you sold it within that year.
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  So this is your time.
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  Talk to a tax professional before selling a big chun chunk of it, not afterwards.
• 3:47
  So many people come to me after they've made a decision and I can't do much for them.
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  Cashing it out in one move or cashing it out over time can be two very different tax bills.
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  So before you sell a single dollar of it, find out what the tax on that growth looks like.
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  But then number three, I want you to give every dollar a job in order.
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  Windfalls like this rarely gets spent all at once.
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  What I've seen in my life, what I've seen working with people for 30 years.
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  Most people who don't give a job to these things.
• 4:21
  This money leaks away in small withdrawals that nobody planned.
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  So here's the thing.
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  I'm going to encourage you to do the first job of this right now with that money that you've got is to build a real cash cushion in a high yield savings account.
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  This is separate from the brokerage account.
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  And I want you to put three to six months of your expenses in that account.
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  That's the first job I want you to do.
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  Put that money in a separate account.
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  Second job, wipe out that high interest debt.
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  You mentioned you had credit card debt.
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  I don't know if you've got credit cards, payday loans Anything that's charging you double digit interest, wipe that out with this money right now.
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  Third job, what's left stays invested and keeps working for your future.
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  That order answers your question.
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  It was never to invest or pay bills.
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  It's both in sequence.
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  If you've got a windfall right now, without assignments, it's going to get spent.
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  So give every dollar a job before you need it.
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  Now I want to go on to know something else you mentioned.
• 5:23
  I think you're not telling us the whole story there.
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  I want to tell you to fix the leak, don't just fund it.
• 5:29
  One of the things you said, which is a tell and I do this for a living, you said in there, part of me needs money for bills.
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  And that is the most important line in your letter.
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  And I wanted to ask you.
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  I wish I could talk to you.
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  This is why this new show we're going to be launching tomorrow is going to be so great.
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  We're going to talk about that at the end.
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  But I want to ask you, is this a temporary gap?
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  Is this something a few months is going to go by or is your income simply not enough to cover your lifestyle?
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  Because that's a really important difference.
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  If you've got a structural issue, $70,000 isn't going to solve it.
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  It's just going to pay for it until it's gone.
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  If you draw from it, it's going to be a set amount on a set schedule for a set number of months in running.
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  Do that.
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  But if it's just a defined bridge and you can see an end, that's not an open account that you dip into whenever it's tight.
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  So you got to understand, if the money, monthly money, doesn't work, $70,000 isn't going to fix it.
• 6:27
  And that's what I'm worried about.
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  When you said that it might cover my bills, it might just fund it for a while, but now you got to get your own counsel as well.
• 6:34
  You said one of the things is your boyfriend was a friend of yours, helped you.
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  Well, guess what, guess what, Tag, you're it.
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  You're the manager of the money now.
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  And that's not a burden.
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  That's good news.
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  So here's one thing I'm going to encourage you to do.
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  Sit down with a fee only fiduciary advisor.
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  That's somebody who's paid by the hour or a flat fee, not by what they sell you.
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  A lot of people go into these income under assets, go pay somebody for their guidance.
• 7:02
  Ask about diversifying some of this thing, the thing that worries me about this is you got a huge return on your investment in a very short period of time.
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  I got a feeling your boyfriend was betting on winners.
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  Well, the problem with betting on winners is those things can become sour losers really quickly.
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  So ask an advisor about how to do that.
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  Bring those tax questions.
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  Talk about the overall bridge plan in that same conversation.
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  That advice you pay for and understand beats advice you inherited from some relationships.
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  You don't need his advice anymore.
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  You need your own advice from somebody paid to give you your answer straight.
• 7:41
  Now I want to go a little deeper, because there's a strange grief in money like this.
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  Your aunt is gone, and what's left is a number on a screen.
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  The man who helped you grow is gone, too.
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  You've also.
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  You almost had two losses.
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  And every time you look at that balance, I guess you're probably seeing both of them standing there.
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  And that's why this feels heavy.
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  Because it isn't just money for you.
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  It's a memory.
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  And so many of us who have inherited money or a relationship came to an end have felt this.
• 8:13
  And you said you feel strange about it.
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  That doesn't mean you're doing anything wrong.
• 8:18
  Faith doesn't promise us that the market keeps cooperating or that the right move will feel obvious to us.
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  And it doesn't promise us that grief lifts on a schedule.
• 8:29
  I Love what Matthew 25:21 says.
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  Faithful in it with what's being entrusted, not perfection with it.
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  The servant is commended for stewarding, not for being uncertain.
• 8:41
  Your aunt gave it to you.
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  That's not a version of you who has it all figured out.
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  God isn't asking you to be flawless with this money.
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  He's asking you to be faithful with it.
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  So manage it with open hands and a clear head and let it be what your aunt meant it to be.
• 8:58
  A help given in love to her.
• 9:01
  Feeling unsure with $70,000 in the account is not a failure.
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  It's not some personal fail on your part.
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  It's the weight of a real decision.
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  You didn't get lucky and lose the right to manage it.
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  You inherited and it's yours.
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  And that plan doesn't have to be perfect this week.
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  It just has to be your plan.
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  So here's your win for today.
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  I want you to do that this week.
• 9:23
  Take full ownership of that money on paper.
• 9:25
  Change the passwords, remove any shared access, and update the beneficiary.
• 9:30
  Then open up that High Yield Savings account and move that emergency cushion out of that brokerage company.
• 9:36
  The Moment the account is fully hers, that decision stops being about him and starts being about you.
• 9:43
  Well, let's get right to our Bible verse.
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  We mentioned Matthew 25:21 and this is what it says.
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  It says and this one is used in, in context with something else.
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  But I thought this was perfect for today and it's actually kind of perfect for the decision I'm going to make or the, the, the boy I'm struggling.
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  It.
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  Oh, it's going to be perfect for the announcer I'm going to make later.
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  And this is what Matthew 25:21 says.
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  Well done, good and faithful servant.
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  You've been faithful with a few things.
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  I will put you in charge of many things.
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  And I love this one.
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  The money's already multiplied once through someone else's decision.
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  Now the question is whether it keeps growing under wise, faithful management or gets spent down without a plan.
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  And you have the ability to do that.
• 10:28
  How about we close in prayer?
• 10:29
  Heavenly Father, I just want to thank you for this listener's aunt and for the love that they thought about ahead of time.
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  And Lord, our listener, comfort her in the grief that still sits underneath of this gift.
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  Heal what that ended relationship left behind and free her from carrying him in her new decisions.
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  Give her wisdom to steward what she's been given, Lord.
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  Encourage to ask for good counsel.
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  Meet the real numbers on the table right now, the bills that have her name written on it and let her provision be a blessing that lasts, Lord, not a weight she's afraid to touch.
• 11:03
  I just ask that you would establish her steps, Lord, as she takes charge of this for the first time.
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  And give her courage and confidence, Lord.
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  And I ask this in Jesus name, Amen.
• 11:14
  Remember this, the money came from your aunt.
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  His advice doesn't own any part of it.
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  So know the tax costs before selling.
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  Give every dollar a job, build that cushion, remove that debt and plan for growth.
• 11:28
  And if the money math is broken monthly, fix the leak instead of trying to fund it.
• 11:32
  And get your own financial counsel from here on.
• 11:36
  All right, now I promised you I was going to share some news with you and I'm going to share it right now.
• 11:39
  Before we go.
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  Today's the last day before everything changes around here.
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  You're going to notice something.
• 11:46
  Tomorrow we're going to have a brand new show.
• 11:48
  It's going to be called Becoming Financially Confident.
• 11:50
  It starts tomorrow at 11:30am Eastern and it's going to be a brand new live show and it's going to be live every weekday at 11:30am for a full hour.
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  You're going to meet my co host.
• 12:02
  We're going to have two voices, not some lecture.
• 12:05
  We're still going to talk about real bills, real estate, real numbers.
• 12:08
  No jargon and of course, no shame.
• 12:11
  And here's my favorite part.
• 12:12
  The live chat is part of the show.
• 12:14
  You'll be able to get your questions answered live on the air in that moment.
• 12:19
  But here's what's not changing.
• 12:21
  It's going to be the same mission, my same heart.
• 12:24
  We're just going to do it together in real time.
• 12:27
  And if 11:30am doesn't work for you, don't worry about it.
• 12:30
  We're going to go live at 11:30 Eastern and then the whole show is going to get released as a podcast episode later that same day.
• 12:37
  So you can choose to be with us live some days or live with us every day, or you can catch it on your drive home.
• 12:42
  Again, that starts tomorrow at 11:30am Eastern.
• 12:46
  So come join us at becomingfinanciallyconfident.com again.
• 12:50
  That's becomingfinanciallyconfident.com I would love to see you there.
• 12:55
  So thank you for joining me today.
• 12:57
  I want to encourage you, as I always encourage you, stay financially savvy.
• 13:02
  May God bless you.
• 13:03
  And we'll see you tomorrow on Becoming Financially Confident.
• 13:07
  Have a great day.