I’m 25 and my parents passed leaving me $7 million – am I just wasting my time at my $90k per year job?

In today’s pull from the Reddit mail-file, we face a good news, awful news situation.

Our inquirer today (we’ll call her “Alice”) suffered a tragedy in 2019, just pre-Covid, when both her parents passed. They did, however, leave Alice a sizeable inheritance, that’s become only more sizeable over time. Thanks to “this crazy market growth,” says Alice, she’s sitting on a $7 million nest egg today.

(Probably even more than that, actually. Alice posted her note back in 2021, after a 50% post-2019 run-up in the value of the S&P 500. And it’s up another 30% since then!)

Whether we’re talking $7 million or $9 million, though, Alice’s basic problem goes like this: After taking some bereavement time off, Alice went back to work at her $90,000-a-year job selling medical devices. It’s a fine job, and Alice describes herself as “competent” at it, but she’s really not enjoying the job with its relentless sales quotas that need to be hit, customers who “demand the world,” and endless “pointless meetings.”

So far, I think we can all sympathize with Alice’s situation, but here’s where it departs from the norm: Alice doesn’t really need to work. A $7 million nest egg, sitting in an S&P 500 mutual fund and earning the historical 10% rate of return, is probably generating $700,000 in capital gains. Even deposited in a high-yield savings account paying 4% interest, Alice is looking at $280,000 in annual income.

And her salary? In any calculation of her total annual income incorporating both salary and capital gains, her salary becomes a mere rounding error.

So why keep working?

Why keep working indeed?

Most responders on Reddit were of the opinion that Alice should in fact go with her gut, and quit the job she hates so much. And I’m inclined to agree, but with a caveat.

Alice’s parents have put her in an enviable position, starting out life with sufficient capital that she may well find greater fulfillment growing her inheritance than by working an ordinary “job-job,” so to speak. Alice might quit her sales job, for example, and become a full-time investor instead.

Note that I say “investor” and not “day trader.” Day trading’s just one step removed from degenerate gambling. Alice can afford to take a much longer-outlook approach to investing, devoting time that would otherwise be spent in an office, or on sales calls, to screening stocks for value, and then narrowing her search for promising investments by reading 10-K filings, listening in on earnings conference calls, and calculating price-to-free cash flow ratios.

Do well by doing good

Or Alice could take the simpler approach of putting a year or six months’ expenses in a bank, and investing the rest in an S&P 500 index fund. This approach seems to have already served her well over the last six years after all! And the time she saves from not having to actively research stocks, she can put to good use working for a job she enjoys, rather than simply endures in return for a paycheck.

Alice might take a low-ranking job in a more “fun” industry than medical device sales for example. Or she might join a non-profit working to promote a cause she supports. Heck, with $7 million to $9 million to play with, Alice might want to hire an accountant and a couple lawyers, and set up her own small non-profit to do worthwhile work that no one else has yet thought (or had the money) to do.

The world’s Alice’s proverbial oyster at this point, and I see no good reason to drudge through it if she doesn’t have to. We should all be so lucky.

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