Money News: Management Tips for an Unexpected Windfall
- Details
- Category: Business/Financial News
- Published on Wednesday, 10 November 2021 05:59
- Written by Mallory Knee
Having a sudden inheritance dropped into your lap from a wealthy, long-lost aunt or uncle might sound like the plot of a movie or TV show, but have you ever wondered: What if that did happen?
Daydreaming about coming into a ton of money is one thing, but to wake up one day and realize you've actually inherited a fortune is another.
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Once the shock wears off, you'll have to come up with a financial plan to handle your new net worth—and avoid any temptations to immediately begin spending. Learn what to do if you get a massive inheritance to avoid any rookie mistakes, or lottery mentality, that could cost you, well, a fortune.
Learning how to manage your money wisely before treating yourself to a dream vacation is the first step to long term financial security. Here are a few tips.
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Think Before Spending
Your first inclination might be to buy all the things you've ever wanted: a dream house, a giant boat, designer jewelry, or an expensive car. But before making any large purchases, hire a financial adviser who can manage the money objectively. Paying someone to make sure you don't mismanage the money might seem counterintuitive, but financial advisers are experts in not only growing money but also ensuring their clients don't lose it.
Pay Off Debts
Before you begin spending, look at any debt you might have and pay it off. By paying off any debts from student loans, car payments, or medical procedures, you'll have more cash flow thanks to eliminating the interest payments associated with that debt.
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Make Investing a Priority
Investing should be a priority, and your financial adviser will help you invest the money wisely to make it grow. Usually, they'll advise their clients to place their funds into investments that yield solid results over time, providing a passive income that will last for years or even decades.
Splurge Cautiously
Once you've paid off your debts, invested wisely, and had time to think about what you'd like to do with the inheritance, you can finally splurge on the fun stuff. Plan the European vacation you've been dreaming of, and if the pool of money is large enough, treat yourself to chartering a private jet to celebrate your new lifestyle.
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Knowing what to do if you get a massive inheritance can save you from losing everything. After securing your financial future, you can purchase that car you've always wanted, be generous to family members and friends, and think about the rest of your life with a little more breathing room.
