Sometimes people ask me how to invest money that they won’t ever need. Most often, I hear this from investors who must take required minimum distributions from retirement accounts and don’t need the money to live on. In many cases they see this requirement as a problem. But instead, they could regard it as an opportunity.
If the question is what to do with this money, the best answer will come from understanding what you mean by money you “won’t ever need.” If you intend to leave the money to your heirs, that’s one thing. If you have already provided for your heirs and you are sure your own needs are taken care of, that’s something else. My strongest recommendation is that you treat this money — and all your money, for that matter — with respect. Read: You’re not just a number: think of life as stages, not ages First things first: Unless you have set up some bizarre trust, this surplus money won’t just sit in cash for the next 150 years. Someday, it will go to somebody or some organization. Review your will (or create one) and spell out your wishes.Then look at the situation from the point of view of the ultimate recipient. What would they want? Most likely they would love to get their hands on the money right away. If you’re going to keep it under your control, how much risk would (or should) th …