Most of us wish to be left with a handsome inheritance by someone in our family, but very few of us know what to do with all the money once we attain it. We either spend it all on a spree and are left with nothing when we really need it or make all the wrong decisions with the money and regret later. We want to help you make the most of your inheritance, and so, here’s looking at certain practices to follow when you come into a considerable inheritance.
Stay Calm – 3 Month Rule
It is advised by many a financial advisor to not do anything with your inheritance for at least 3 months after you get it. 3 months give you a chance to process the matter and to think through the best course of action.
Don’t Switch Your Help
Your current financial advisor knows financial history better than others. He also understands your individual needs and what you need to achieve from the money you make, invest and save. As such, when you receive your inheritance it is best to stick to your current financial advisor, at least for a while, as he will best be able to guide you on the next steps you should take.
Pay the Debt
If you are making your way through any kind of debt, either personal or a home loan etc. then the first thing to do with the inheritance money is pay off all of them. By doing so, you save yourself from re-occurring struggle of paying installments or the looming tension that comes with it.
Turn to Investments
Once your debt is paid, take a chunk of the money and put into various investment avenues. By doing so you are giving the money you inherited a chance to grow and reap larger benefits. Invest thoughtfully and in the right places to attain better returns at every turn.
Think Before Splurging
Of course, inheriting money is no fun if you can’t use even a little bit for your own fancies. However, try not to be reckless while doing so. It’s okay to splurge some of it but do so wisely. Steer away from the downward slope of loss and instead splurge on things that actually benefit you. Limit your splurging though, don’t go over board.
Leave Something for The Next-gen
After paying off your debts, investing, splurging, now comes the time for saving for you and your children. Yes, it’s true whatever you invest is for them too, but still, having some money kept aside that is not bound in contracts and lock-in periods is a good idea. The cash they inherit can be used by them immediately in case of emergencies or in their hour of need. Add to this inheritance amount, something from your side too for your future generations.
Heeding the above advise is sure to help you manoeuvre your way through any confusion you may have regarding your inheritance. And you’re trusted financial advisory is sure to help you for the anything else.