How I Plan to Invest $72K Gifted by My Grandparents for a Secure Financial Future

As Baby Boomers and members of the silent generation (the parents and grandparents of Millennials, respectively) pass on their wealth to the next generation, the so-called Great Wealth Transfer will see many of today’s young people walk into some pretty sizeable financial windfalls. Undoubtedly, heirs will be taking in trillions, and the funds could be invested and spent in ways that differ drastically from older generations.

In this piece, we’ll check in on the case of a 30-something Reddit user who was given a five-figure sum from their grandparents.

They were told to “invest it” but aren’t all too sure of the right moves to take. With a longer investment horizon and a wealth of new and simple options to consider, I’d argue that the heirs will be able to invest the proceeds in a far more efficient way than their grandparents.

Of course, it’s not hard to imagine that many of today’s young people lack the financial savvy to make the right moves. In any case, this Reddit user is on the right track.

This Reddit heir is doing it right.

With a nice emergency fund stashed in a SoFi high-yield savings account (HYSA) yielding an outstanding 3.8%, they’re prepared to deal with any financial jabs to come from out of left field. With such an outstanding rate, the heir may wish to top up their emergency fund so that it can cover closer to six months’ worth of expenses for them and their spouse.

Of course, depending on one’s expenses, there may already be enough of an emergency fund as it stands today. In any case, parking a bit more in a HYSA for the interim isn’t all too bad a bet, especially for a near-4% rate, something that you’d be hard-pressed to get for savings at a big bank.

Beyond the emergency fund, it makes sense to contribute to tax-advantaged accounts (think Roth IRA) while using the proceeds to invest in low-cost solutions that mirror the broad stock market.

With a Schwab portfolio that’s heavily leaning on the Schwab S&P 500 Index (NASDAQ:SWPPX), the heir already seems to know what to do. With the S&P 500 recently coming off a 10% correction, I’d argue that now represents a great time to be buying more of such a fund. While I wouldn’t put the entirety of one’s inheritance in at any given moment, I do think that gradual buying of such a fund on continued weakness could prove very smart.

What about larger waves in the stock markets?

Of course, tariff uncertainty and the surge of volatility make it a tough time to even think about adding money to stocks. However, at such a young age (30s), stocks, I believe, are the asset class to go with to build real wealth over the span of decades. Sure, it’s a wobblier ride, but one that’s still worth braving at a time like this. Whether it’s due to the inflation-crushing nature of stocks or the somewhat higher prospective returns after a nasty market spill, now is not the time to hit the panic button.

Rather, it’s time to hit the buy button, in my humble opinion. As always, though, a financial advisor can chime in and give their thumbs up for the path forward. While some may view bonds and lower-risk assets as prudent diversifiers, I do think that stocks triumph over bonds for someone so young who’s looking to gain a leg up on their retirement savings.

The bottom line

So, what’s a sound game plan for putting a five-figure inheritance to work? Maintain the emergency fund (that seems to be checked off already, at least for the most part), contribute to those tax-advantaged accounts, and keep adding to the S&P 500 (SWPPX) over time. This Reddit user is on the right track and looks poised to make the most out of their grandparents’ invaluable gift.

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