Essay, Research Paper: What To Do With Money

Economics

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What do you do when you suddenly inherit money? Are you supposed to run out and
spend it like crazy? Are you supposed to put it all in the bank? Do you tell
anyone you have your money and where you got it from? These are all questions
that went through my head as I turned 18. I was an overnight "rich"
person. What was I to do? Ever since I can remember, my mother has been telling
me, "when you turn 18 you are going to get the money your Daddy left for
you." For some reason I never really believed her. I thought that I would
get about $2,000 or something and be able to buy a nice computer for college or
something along those lines. I never thought I would be able to buy a house. I
dont even want or need a house, but all of a sudden I am able to buy one. I did
not grow up poor by any means, but I was not the kid on the street with money to
toss out either. Now that I had money, what was I supposed to do with it? The
first thing I did when I got my money was hug my mother really tight. Ever since
I was 2 she had been paying taxes on it, investing it, making sure it was safe,
and tons of other things she really did not have to do. She did it all out of
the kindness of her heart. When the judge in control of my funds would be a dork
and send us a nice little letter saying that he "was sorry but had decided
to move the money from a 10% interest account to a 4% account", my mother
would be talking to our lawyer and trying to get it back to the good interest
rate. We would always be getting letters like that, so having dinner with a man
who charged us $250 an hour was not unusual. Even then I never realized that I
would be getting actual money. I must have been in some kind of a dream land,
but it did not make any sense until one certain rainy Monday. That Monday I had
gotten called out of band by my lawyer, who to my suprise, was standing in my
high school hallway. He handed me a stack of documents about 4 inches thick and
instructed me to sign on various pages. I did so, and afterwards he gave me this
big smile. "Congratulations, Beth. You now are in control of your
money." I asked him exactly how much I had to spend and he directed me to
the bottom of the next to last page. I stared at an unbelievable figure -
$84,000. Was my lawyer serious? I actually had a bank account somewhere with my
name on it that contained that much money? I could go out and by a new car and
give each of my friends cars? I did not understand how overnight I had gone from
my little dream world to reality. I now had a bunch of dilemas to deal with, and
I was not sure I even wanted them. Would having money change me? That was a
major concern of mine for a long time after I got my money. I did not want to
become one of those superficial people that depend on money to make them happy.
On the other hand, now that I could afford to get nice things, I wanted to take
advantage of it. I could now go out and buy a nice computer for college, maybe
buy a new car, and finally get some new clothes. The last time I had money to
spare on clothes, I was in the 6th grade, so I think I was a little overdue for
a trip to the mall. Clothes, a computer, and a car seemed very shallow to me, so
I decided to get some advice on what to do with my fortune. I did not want to
spend all of my money and then wake up one day and realize it was all gone and I
had to hunt for tuition. That would be the last thing in the world I would ever
want. Randy Baird worked for American Express at the time, although now he works
for Prudential Securities, and he was more than willing to meet with me and
discuss my financial future. He explained to me that although it seemed like I
had millions of dollars to blow on whatever I wanted, I would actually need a
budget to get through college. I could not believe it. I thought I would be able
to buy all I wanted and not have to worry about spending a little too much on a
fancy dinner or buying one too many CDs. After our initial meeting, I sat down
with a calculator and figured out exactly how much I could spend on a computer.
Since I love computers to death and I did not want to have to upgrade during my
Undergraduate education, I decided to buy a brand new 400MhZ computer. The funny
thing about my computer was that although I picked a very expensive setup, I had
a friend of mine who worked with a local computer company buy the computer for
me under his employee discount. Even having $84,000 had not changed my
"penny pinching" style. I felt so proud of myself that I even called
up Randy and told him what I had done. After he recovered from my $2000 computer
bill he told me that I had made a wise decision and that he hoped it would be
the first of many. With those words ringing in my ears, I went out and bought a
brand new truck. It really makes me smile to myself to realize that although I
have all of this money at my fingertips, when I chose to buy a truck, I got a
Standard because it was cheaper, even when I did not know how to drive one.
Those kind of things that I do for myself just crack me up. Feeling insecure was
way too common when I was trying to decide exactly what to buy with my money and
I was very grateful for my humble upbringing. Without it I probably would have
gone spend-crazy and ended up with a Corvette and about 5 cents to my name. Now
that I had a computer, a car, and clothes, I was ready to make a big decision. I
needed to figure out what I wanted to do with the remainder of my money. After
some long nights with my trusty calculator and a few dozen meetings with Randy,
I decided to invest the entire thing. If I had the will not to touch the money
for 4 long years, by the time I graduated I would have a considerable amount
saved up. When I realized that I wanted to do that and not withdraw money every
week to buy stuff with, I was left with a big dilema. I needed to ask my parents
to support me through college. After I was throughly rejected by them, I decided
to get a job and work my way through school. My mother decided that was a bad
idea as well, and I settled on investing 3/4 of my money and using the other 1/4
for college expenses. It was really funny to realize that even though I was
newly rich, I would have to pretend I was poor for 4 years and just ignore the
money I was saving up. My financial advisor helped me make up a budget that was
reasonable and my parents helped me understand how to stick to it. The hard part
was over, I knew what I had to do. Finally college arrived and I found myself in
a new town with nothing to do. I thought of the thousands I had in my name and
it was very hard not to drive over to the bank and withdraw some of it just so I
would have something to do with my time. The thing I came to realize was that
even though I did not want to spend it, it made me feel happy and secure to know
that I had it saved away. That cushion would be there for the next few years and
if there was ever some emergency, I could access it. That security just made
most of my other college fears fade away. I do not think I am a superficial
person at all. That fear of mine I can just throw away, because it will never
happen to me. I know what I want in life right now and I know how to achieve it.
Getting a lot of money just kind of forced me to re-evaluate what I needed to do
to grow up. Now that I look back on the last year or so, I can see that I am
financially secure and even better, I am more mature than I was as a high school
senior. I can only hope that I will be able to grow as quickly and have it turn
out as well as I have in the past.
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