If you’ve recently received an influx of money, then that’s great news. If managed in the right away, then it’s likely that this cash will provide you with some long-term security and with a much-improved quality of life. How can you make sure that this cash has a wholly positive impact on your life and that it doesn’t become a source of stress? This article will explore some top tips for managing a windfall properly.
Seek financial advice
In your daydreams, you might have lots of ideas about how you’d spend a large amount of money. Whether you’d spend it on a fancy yacht or you’d pay off all of your family members’ mortgages, it’s likely that most people have thought about this from time to time. However, real life is often very different, and it’s advisable to get some proper advice before making any rash decisions.
Financial advisors can come into play here. With lots of experience in advising people who have recently come into money, they can help you work out everything from how to make sure that you pay all the right taxes to ensuring that you have a sustainable long-term plan that prevents you from wasting any of your new-found riches.
Consider investment options
Your financial advisor is likely to suggest investing some of your cash, which essentially means placing it somewhere where it can grow in value. The world of investments can sometimes seem a little scary: from stocks and shares to government bonds and much more, it can appear to the untrained eye like a source of endless confusion – but a financial advisor can help.
Depending on your financial circumstances, it’s likely that you’ll receive different advice. If the windfall is relatively small and you’re not a property owner, for example, then it’s likely that you’ll be advised to save towards your future in some way. However, if you’re already financially comfortable, then the investments suggested to you may take a different form. You may want to consider setting up trust funds for family members further down the line, or you might want to use some of the cash to set up that company or charity idea you’ve always had.
Save a little, spend a little
No matter how big or small your windfall is, it’s a good idea to take a balanced approach. If you keep every last penny of it stashed away without ever spending any of it, then you’ll soon become resentful and angry, but if you find that you’ve spent all of it within a year or two, then you’re likely to regret it for the rest of your life – and you could find yourself without adequate preparation for your retirement.
Instead of blowing it or hoarding it, develop a strategy that encompasses the best of both worlds. You could, for example, decide that the money – and any earnings from it as a result of savvy investments – is going to pay for a luxury two-week holiday to a dream destination every year, and that the remainder of it should get designated as savings for later life. That way, you can enjoy your money while also knowing that you’re being prudent.
Gambling wins
There are all sorts of different ways that people come into money. One of the most lucrative but perhaps least common is winning at some form of gambling: whether it’s a lottery win to the tune of millions of dollars or it’s a victory at the casino, there are lots of different ways that gambling can line your pockets – but they all require a little bit of special advice.
The first thing that you should do after a gambling win (especially from a casino) is remember that there’s often nothing to be gained by risking your cash again. Remember that this is what the casinos want you to do – because it increases the chance that you’ll lose it all back to them! It’s still fine to have a gamble again from time to time, though, especially on lower-stakes games: whether you buy lottery tickets online here or you head back to the roulette wheel for one night only, recreating the fun on a smaller scale isn’t out of your reach.
While it’s certainly true that having some extra cash is a good thing, there’s actually a lot to think about – and it can quickly become quite stressful. From selecting the best investment vehicle for your needs to ensuring that you don’t blow it all in a few months, there’s plenty to get your head around – so taking advice is a smart move.