How to invest an inheritance
I am 34 years old and single. My only debt is about $75,000 at 6.1% with 20 years left on a fixed 30 year mortgage. The house is now worth about $130,000, so I have a nice bit of equity. My income is about $3,000 a month after tax.
My grandmother passed a few months ago and I inherited the following:
$75,000 in cash
$220,000 in an Edward Jones bond/mutual fund portfolio
A well-kept house that appraised at $175,000 (no mortgage)
A 2003 Buick Century (barely any miles, like brand new)
All the household furniture and effects
There are no estate taxes due and I should receive the stepped-up basis as of the date of death on the investments and the house.
I know this is an amazing gift and I want to make the right decisions on what to do with it. Currently, I have about $12,000 in savings and $10,000 in a 401K. Here are some things I am pondering:
-I probably will stay in my home so I either need to sell the inherited home or rent it out.
-I would love to refinance my house or even pay it off. Unfortunately, I have lousy credit (a little over 600 score). I don't know if I could get the good rates even putting down a significant amount.
-The investment account is currently very bond-heavy and probably needs to be re-calibrated to match my age and investment goals
-I need to know how to improve my credit score. Even though I could buy a car in cash, I thought maybe I could finance a couple of thousand just to establish a new account that is paid on time. I don't have any credit cards, so maybe I should get one and just use it to buy gas or something and be sure to pay it off in full every month.
-Thinking about setting aside 15K or 20K in some type of emergency fund that is not very convenient to get the money out of.
Can all you investing experts help me?