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Personal Development 1,142 views Sep 20, 2018
How to Make the Most of a Staggering Windfall

Lots of millennials are about to come into a lot of cash in the near future. Okay, in the next 20 to 30 years. Baby boomers are about to offload most of their wealth to their children – a study by Accenture says between $1 $3 trillion will be transferred to heirs by 2050. Question: are the recipients ready to handle such amounts and if not, how can they make the most of each coin?

  • Do Nothing

First order of business as told by experts: do nothing at least for the first few months. Financial advisors reckon that upon receiving a huge sum of money, most people are likely to make hasty decisions. So, take a few deep breaths and do nothing until you are mentally ready to make sound decisions. Go on holiday, even, to sort out your thoughts.

An inheritance is different from rotary wins in that an heir knows the person who bequeathed them personally. In this regard, they are less likely to spend the money poorly.

  • List your Plans

You have all the money you ever wanted – or at least a little of it. What are your plans with it? While away on holiday or in the first month of receiving the inheritance, experts advise that you make four lists. The first is a safety measure – the cash you will set aside for medical and life insurance, personal use and such expenses; Fun – your planned vacations and other escapades; the future – portion set aside for investment; and cushion – money for emergencies. You want to ensure there is money for each of this categories and if you are so inclined, you could send some of it to charity.

  • Pay off Debts

If you have any debts, this is the best time to pay them off. You may never have cash of this magnitude again and so you want to be free of any encumberment. Also, note that you don’t have to make advance payments just because you have the cash. If your mortgage is payable in five years, you could invest this cash into a plan equivalent of this period then take out potions of it to pay off the mortgage as it becomes due.

An expert advises on thinking income instead of assets. Think of the inheritance as a certain amount of money for the next so many years instead of a lump sum – say $40,000 a year instead of $1.2 million. This perspective helps when planning on his to spend your new wealth.

  • Fund an Idea

You may not have a solid business plan but others could, and so here is your chance to be a venture capitalist. It comes with its tax benefits too, so you will be saving some and making money at the same time. There is no shortage of ventures that could use funding, such as upcoming web design firms that offer futuristic solutions.

Have Fun!

While making all these plans, don’t forget to have fun! You don’t have to live in squalor because you are too scared to spend what you have already earned. As long as the future is secure, you can have fun with what’s left.


Tags: #personal