I Was Given $53,000 and Now I’m Terrified to Invest Half of It—What Should I Do?

A 23-year-old Reddit user came into a lot of money after a car accident. He was hit by a vehicle, and after all the fees were paid, he walked away with $53,000 that he currently has in a CD. He talked with an advisor at his credit union who said he should invest in something which the poster didn’t understand, but which required a $25K minimum investment and came with a 1% management fee. 

The poster is really scared of making a mistake with the money. He wants to someday buy a car and give his sister a little money, but he doesn’t want to waste the funds. And, he can’t talk about the money with anyone in his family because he said none have financial sense and many of them owe him money anyway.

So, what should the poster do? 

How to manage a windfall when you know nothing about money

The Reddit poster here is understandably confused because he has a lot of money for someone his age and no place to turn to for help. He should consider finding a financial advisor to help him evaluate his options, but not the one who was trying to sell him on an investment without explaining it fully and with an added fee.

Instead, the poster should look for an advisor who works on a fee-only basis and who acts as a fiduciary, so they will have his best interest at heart. The advisor should be someone he feels comfortable with, and who talks to him in a way he understands, so he’s not walking away still confused and uncertain of how investment options work and what to do. 

What should the poster do with the funds?

An advisor can provide the help this Redditor needs to make a fully informed choice. However, the poster most likely should do a few key things with the money.

First, he should set aside some of it in a high-yield savings account so he has an emergency fund. He should not touch this money unless or until he has an actual emergency. Since he’s pretty young and likely doesn’t have a lot of major financial commitments, given that he doesn’t even own a car yet, he can start with a few thousand dollars.

Then, he can open up a Roth IRA with a brokerage firm and max out his contributions for the year by investing $7,000 in it for 2025. A Roth IRA will allow this money to grow tax-free until he retires, and it will turn into a lot of money by that point. He can put the funds right into an S&P 500 index fund, which will give him a good chance of earning a 10% average annual return, and he won’t have to pay a big fee to an investment manager for it. 

Beyond that, he likely should invest some more of the money in a taxable brokerage account and perhaps begin to save some of it for his other goals, like buying a car, helping his sister, and perhaps purchasing a home someday. His advisor can help him understand the options and work with him to decide what to prioritize. 

 By taking these steps and getting good advice, the poster can make sure he understands the opportunity this money provides to him and uses it to help set himself up for a more secure future.