Navigating Divorce at 48 – How I Plan to Manage My $4.5 Million Assets and Secure My Future

A Reddit user is trying to figure out how to manage her money to build a secure future for herself. While she is in a good place financially because she has a lot of resources, she is also facing some unique challenges as she is getting divorced at 48 and doesn’t have a lot of investing knowledge or clear ideas about what to do with her money.

So, how can the Redditor take her money from your divorce settlement and build the security that she needs going forward? 

Divorce throws a wrench in financial plans

The original poster (OP) explained the challenges that she is facing in her Reddit thread. She is 48 years old and ending a 22-year marriage with two kids who are in college. The divorce is an amicable one, and the couple is close to signing an agreement on how to split their property, although she’s annoyed that her husband squandered a bunch of cash that the family had. 

Although she’ll be receiving around $4.5 million from the divorce, and she has a consulting business that can earn her around $100K to $200K per year, she doesn’t know what her spending is going to look like post-divorce, and she has very little investment experience because she’s been tied up in running the business and taking care of her family. 

She’s also concerned that she’s essentially losing 50% of her net worth in the divorce, so she wants to make sure she does the right things to protect what’s left. 

How to manage your money when you have a lot of cash and little investing knowledge

Many other Reddit posters had some good suggestions for the OP that she would be smart to follow.  Specifically, many responders told her to keep her investing simple and to avoid making any major decisions for around six months after her divorce.

Ending a 22-year marriage can cause major life upheaval, and the poster should take time to try to figure out what she wants her new life to look like before she makes major financial commitments. She said she’s not looking to buy a house right now, which is good, and she also said she’s not clear on what her spending will look like, so making a draft budget that doesn’t include any major purchases would be a smart idea to give her a sense of control in the short-term. 

As far as the suggestion to keep her investing simple, many posters recommended a very limited portfolio with a few ETFs that give her exposure to the stock market as a whole, as well as to some safer investments like bonds. She’ll also need to pay attention to her risk tolerance and asset allocation, given that she’s 50 and getting somewhat close to the time she may want to retire. 

But, as many posters commented, you don’t need to be an expert investor to buy ETFs and set yourself up for a pretty good chance at earning a decent ROI — and you shouldn’t try if you aren’t confident in your investing knowledge. Even people who think they know what they are doing when buying stocks often underperform the market as a whole, so since the poster doesn’t feel like she has that knowledge, her best bet is to take the simple, proven approach.

A number of Redditors also advised that the OP talk to a financial advisor, and that is a really good idea. She has a lot of money coming to her all at once and has the opportunity to set herself up for a secure retirement. A financial advisor can help her to ensure she uses that nest egg wisely in a way that gives her the future she deserves. 

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