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A close friend of mine passed away two month ago at the age 47, left a lot money to his wife; and she ask for help how to invest that pot of money, she is in the early 40s with two teenage daughters and is still working with decent salary. I know this board has a lot people with investing wisdom and would appreciate if you can recommend some good funds for her, her account is at vanguard. Thanks in advance.
I agree with @Ted as to the funds he mentioned and KISS. I will add VWENX which is available to Vanguard account holders. This fund is active managed varying from 50-70% in equity. The long term return performance is excellent, with this fund having an expense ratio of .18%. Not knowing the tax status of current or these new monies, one may also consider a Vanguard muni bond fund for some of the monies, if investment taxation could be a problem. Also, if applicable; maximizing a Roth IRA contribution with some of the monies. The above is offered with the presumption that these monies are directed properly towards any and all other financial needs first, as deemed appropriate.
Tough call without knowing the person's risk tolerance, financial goals, and sources of funds. Since she has account with Vanguard, it would be equally as wise to talk with Vanguard advisors, even without using their advisor services.
i think she needs a financial advisor - just picking funds is not enough. someone needs to look at the entire picture. now that she is a sole provider for the tho teenagers, does she have enough life insurance?...she needs to put 2 kids through college while saving for her own retirement. does she have a 529 for each daugther?...
investments are but one part of the family financial planning. she needs clarity on the whole picture.
Totally agree with fundalarm. A fund to invest in is the least of her concerns when there is so much other financial responsibility to contend with. Good advice fundalarm.
Thanks everyone for your inputs, deeply appreciated. There are enough money in 529 to support both kids through college. Her house was paid in full when my friend realized that he didn't have enough time left. I recently suggested her to talk to advisor, she did but was hesitate to take that professional advice. Her diseased husband told her to use Vanguard index funds to manage her Portofolia after he is no long around. I am not an index person and would still appreciate your suggestion of various index funds to start. Thanks Ted and I will pass your suggestion to her.
If she is truly well-set, as it sounds, and being not that old, I might advocate more aggressive (higher proportion in stocks) than has been advised at the front. For example, half in Total, half in Wellington, call it a day.
Thanks everyone for your inputs, deeply appreciated. There are enough money in 529 to support both kids through college. Her house was paid in full when my friend realized that he didn't have enough time left. I recently suggested her to talk to advisor, she did but was hesitate to take that professional advice. Her diseased husband told her to use Vanguard index funds to manage her Portofolia after he is no long around. I am not an index person and would still appreciate your suggestion of various index funds to start. Thanks Ted and I will pass your suggestion to her.
If she wants advice from Vanguard, the Vanguard Personal Advisors Service will manage her money for 0.3%/year.
They would put her in the total stock market index, the total international stock market index, total bond market index, total international bond market index, etc etc
rjb112: I would not hesitate to take Ted's advice for now. I was put in the very same position 3 1/2 years ago, but we had not discussed investing my inheritance since we both were active investors, its how we met. He led a class on investing that I took. I chose to take on an advisor, but have since taken some out to manage on my own since I am confident I can do as well. It did give me some excellent planning and allocation plan, which I am basically following. As your friend learns more about investing and gains confidence, she can then branch out to some investments she make like better. I am not a fan of Vanguard's advisory service concept since they only will invest in their products. She may find others investments she likes. If she is does not want to have an advisor help manage right now, she may want to go to https://www.napfa.org/ and find an hourly rate advisor to help come up with a plan for the future when she is ready.
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Regards,
Ted
investments are but one part of the family financial planning. she needs clarity on the whole picture.
The OP asked for fund suggestions.
For example, half in Total, half in Wellington, call it a day.
They would put her in the total stock market index, the total international stock market index, total bond market index, total international bond market index, etc etc