A financial windfall can make your life better in many ways. It could come in the form of a substantial bonus at work, an inheritance from family or friends, a legal settlement, a real estate investment or a lottery win. Whether the size of your windfall is small or large, it can be a life-changing event that requires careful planning.
It’s often easy to fall prey to people who are looking for ways to take advantage of you with a newfound wealth. It’s also important to avoid making rash decisions that you may regret down the road. With a little planning, you can enjoy your windfall for years to come.
The first step is to pause and let your emotions settle. Depending on the type and source of your windfall, it can be exciting or frightening, and it’s important to keep your emotions in check so you don’t make hasty or impulsive decisions.
Next, review your goals and prioritize them. A financial professional can help you understand how your windfall will affect your current situation and long-term plans. Be sure to consider the tax implications of your windfall as well, if applicable. Cash gifts up to $15,000 won’t be taxed, but gambling and lottery winnings will count as income, so it’s best to talk with a tax professional before you do anything else.
With your priorities established, you’ll need to decide how much of your windfall to allocate toward each goal. Even a large windfall won’t likely be enough to fully fund all of your goals, so it’s important to be realistic about what you can accomplish with the money. You should formalize your goals and the allocation of funds to each one in a comprehensive financial plan.
While it’s tempting to give back to family and friends, be sure to set aside a portion of your windfall for yourself as well. A solid savings plan and a reasonable allocation to retirement, charitable giving and investments can help your good fortune last longer.
A financial Selling land for a cash windfall can also provide an opportunity to pursue some of your hobbies and interests. Whether it’s taking piano lessons or starting a photography business, you can use your windfall to follow your passions and improve your quality of life. Lastly, a windfall is an excellent time to get a head start on college savings or invest in real estate through a crowdfunding platform like DiversyFund. You can find opportunities with a minimum investment of $500. If you’re interested in investing, be sure to consult a reputable financial advisor who can help you create a comprehensive strategy for your windfall. They will charge a fee, but they can also help you avoid costly mistakes that can reduce your long-term returns. It’s also a great way to diversify your portfolio and potentially earn an extra stream of income for the rest of your life.