Question

imagine you have inherited 1 million dollars but you cannot spend it till your 20 ( your 18) choose three different types of investment and they all have to equal 1 million

Answer 1

Quick clarification: do you mean
a) split the $1,000,000 into three different investments that are equal in size (so ~$333,333 each), or
b) give three alternative ways to invest the entire $1,000,000 (three different whole‑million strategies) and you’ll pick one?

I’ll assume you meant (a). Below are three different, equal-sized ($333,333 each) investments for a short multi‑year hold until age 20 (if you’re 18 now, that’s ~2 years). I give the rationale, risk, and practical notes.

1) Safety / capital preservation — laddered short‑term Treasuries or high‑yield savings / CDs (~$333k)
- What: A ladder of short‑term Treasury bills (or bank CDs) that mature across the 2‑year horizon, or a very high‑yield online savings account.
- Why: Preserves principal, predictable returns, low volatility — good for the portion you’ll definitely need when you turn 20.
- Risk/return: Lowest risk. Current short‑term yields (mid 2020s) are materially positive (higher than old near‑zero era), so you’ll earn a few percent annually.
- Practical: Treasuries are held in a brokerage account; CDs have FDIC protection up to limits. If under 18, use a custodial account or trust.

2) Growth — low‑cost total stock‑market ETF (e.g., an S&P 500 or total‑market fund) (~$333k)
- What: A broad US (or total global) equity ETF/ index mutual fund (e.g., S&P 500 or total stock market).
- Why: Longest runway for highest expected return. Even with a ~2‑year horizon this piece can outperform cash, but it’s volatile and could drop short‑term.
- Risk/return: Higher risk / higher potential return. Over 2 years, outcomes are uncertain — could be meaningful gains or losses.
- Practical: Use a low‑cost fund (low expense ratio). If you’re a minor, hold in a custodial brokerage account.

3) Diversifier / income + stability — short‑intermediate bond fund or conservative multi‑asset fund (~$333k)
- What: An intermediate‑term aggregate bond fund or a conservative target‑risk fund (mix of bonds + some equities), or a municipal bond fund if you want tax‑free income and are in a high tax bracket.
- Why: Smooths portfolio volatility, provides income, better returns than cash but less volatile than equities.
- Risk/return: Medium‑low risk. Bonds have interest‑rate sensitivity, so value can move with rates.
- Practical: Choose a highly rated aggregate bond ETF or a well‑known conservative target fund.

Additional practical points
- Custodial/legal: If you’re under 18, funds typically must be held in a custodial account (UGMA/UTMA) or a trust until you reach the legal age. Discuss with the custodian/guardian and a lawyer.
- Taxes: Investment earnings can have tax implications; long‑term vs short‑term capital gains, interest, and dividends differ. Consider tax‑efficient funds and consult a tax advisor.
- Liquidity & emergency funds: Keep some readily accessible cash (part of the “safety” bucket) in case of unexpected needs or opportunities.
- Alternatives and constraints: Series I bonds are attractive for inflation protection but have purchase limits (~$10k/yr electronically). Large private investments or real estate can be good long‑term but are illiquid and not ideal for a 2‑year wait.
- Advice: With seven figures, it’s wise to consult a fee‑only financial planner and a tax attorney to set up custodial/trust structure and an investment plan consistent with your goals and risk tolerance.

If you meant option (b) — three full‑million strategies — I can outline a conservative, balanced, and aggressive whole‑million plan. Tell me which you prefer and your exact age/horizon and risk tolerance for tailored numbers.