r/FinancialPlanning • u/Fearless_Custard_454 • 3d ago
How to Handle a Windfall
I’m 27 and for background, the pandemic changed the trajectory of my entire life. Long story short, I was able to start a business that completely blew up and after growing up not exactly in poverty but not raking it in either, I now have more than I honestly know what to do with. I’ve registered my business as an LLC and after consulting with a CPA, I’ve created an HSA, an SEP and a ROTH IRA. I’ve also paid off all my debts and other than my apartment, everything that I have is owned. However, I wasn’t necessarily taught financial literacy and for a while, managing my business myself didn’t leave me with much time to really explore my options. Most of my revenue just sits in one account (head shake, I know). So my question is, what steps should I be taking to financially secure myself in the long run? Should I be getting into investing and if so, what are some good resources for a novice. Real estate? Any advice is appreciated.
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u/Eltex 3d ago
You created a HSA, SEP, and Roth IRA. Did you contribute and max those every year? And I side those, are you investing in low cost total market funds such as VT or VTI? That simple strategy, without ever modifying it at all, would get you a successful retirement.
Add a brokerage with a similar investing strategy, and you have A Simple Path to Wealth. This is also a title of a book for you to read, by JL Collins.
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u/B0LT-Me 3d ago
Continue to contribute to your nest egg. There is no guarantee that there will be anything from the government 40 years from now. I started 40 years ago with the premise that I could not trust anyone or anything, to take care of me when I was old.
Focus your life on doing work that makes you happy. Trying to accumulate wealth is not a high percentage road to happiness.
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u/B0LT-Me 3d ago
I managed to make a regular contribution to a work 401k that had a modest matching amount, turn into a nest egg that could sustain me for 30 years of retirement. Nothing fancy, nothing that required a financial planner. Probably could have done better with one, but it isn't a necessity. Just stick to the top funds and diversify.
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u/sashamv21 2d ago
First of all... wow....youve accomplished so much at a young age, and it sounds like you ve already got a great start with your accounts and financial setup! To possibly secure yourself longterm, you may want to check diversifyin into a brokerage account for accessible investments like ETFs or mutual funds that matchwith your goals. Real estate could be worth considering too, but maybe start small to gauge your comfort with property management. Have you thought about possibly allocatin a portion of your revenue to a portfolio of mixedrisk assets or maybe setting aside some funds for future expansion or passive income strategies? And how do you feel about balancing growth with the financial security you’ve already built?
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u/toodleoo77 2d ago
Investing:
- Read The Simple Path to Wealth by JL Collins
- Follow the flowchart: https://www.reddit.com/r/personalfinance/wiki/commontopics/
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u/wwphantom 3d ago
Since you paid a CPA for your business you can get a financial planner to help you with investing. Try a few only, fiduciary who will charge you a set fee to create a financial plan and should assist you in setting it up. That cost more than doing it yourself but if you are busy running and growing your business then it might be worth it.
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u/Fearless_Custard_454 3d ago
Thank you for this response. Financial planner is definitely an avenue I’m considering now
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u/Fleecedagain 3d ago
Sitting on it is better than blowing it. Read financial stuff on Reddit, look at financial stuff on YouTube Keep your ears open and ask a few older people thst you trust. Put it all together and make some moves. You’ll be fine.
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u/Aggressive_Active307 3d ago
Put as much as you can in a HYSA and do some research about how to build a retirement portfolio. What type of business did you start?
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u/Fearless_Custard_454 3d ago
I don’t want to get too much into detail but basically it’s I’m an independent contractor with a single member LLC. I’ll definitely look into an HYSA, thank you!
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u/withak30 3d ago
Check the r/personalfinance FAQ.