Life in the One Per Cent

Hi Barefoot,

I am 21 and in my third year of a medicine degree. I have just found out that I will be receiving a generous $100k inheritance from my late grandfather to be held in trust until I am 25. The executor is arranging an accountant to sort out the trust. Firstly, do I get any say in how the money is managed? Secondly, how would you recommend I invest it if I am able? I realise this is a huge headstart in life and want to make the most of the four years in trust.

Sincerely,

Tom

Hi Tom,

You’ll have to read the trust deed, but I doubt you’ll have much say in how your money is managed. Given your grandfather was smart enough to make you wait till you turned 25 (and shaken a bit of stupid out of your system), to get your hands on the loot, I’m sure he’s thought it through. Best to talk to the executor.

Now, in four years’ time you’ll have $100,000 (plus earnings) and you’ll have your medical degree. From an income perspective, you’ll eventually reach the top 1 percent. That doesn’t automatically mean you’ll be wealthy, though -- god knows the doctors, dentists and football players I’ve worked with who don’t have two bob to rub together. So the way to honour your grandfather is to start preparing now, by learning the basic building blocks of wealth and low-cost, long-term compound investment (keep reading my column!).

Scott