Life can be an exciting and unpredictable thing. One minute, you are going about your normal daily routine and the next minute, everything can have changed forever. Very often, this can be a positive thing as the life-changing event that comes along can improve your circumstances. One great example of this is getting a sudden financial windfall.
Suddenly getting a large amount of money can happen in a number of ways. Maybe your lottery numbers finally came up and you scooped millions in a jackpot win, or maybe your rich old uncle left you a significant windfall in his will when he passed on. Whatever the exact situation, you can sometimes find a lot of money coming your way out of the blue.
Make sure to handle your new-found wealth properly
Many people assume that coming into money in this way will answer all their problems and make life perfect. While this is entirely possible, it will only happen if you are prepared to deal with all that the windfall brings. Having lots of money can actually feel a little scary as well as exciting! The key is to think ahead to how you will manage it. This is essential so that you do not waste it or get ripped off while also allowing you to enjoy it to the full.
How can you manage your finances to make the most of any windfall?
- Use an asset management firm – top of the agenda for most normal people will be talking to a professional asset management firm. This will ensure that you get expert advice on how to invest your money and make it work for you to earn more into the future. Most normal people will not have the knowledge or investment skills to do this alone and make the right calls.
Al Masah Capital is one of the best around globally and has been helping its clients manage their wealth and assets since 2010. Since then, it has built up a strong reputation for delivering honest advice, performance and value to its customers. With a range of low to high-risk portfolios to consider and various assets classes such as funds and bonds, Al Masah Capital is a wise move for any investor.
- Do nothing! – as well as finding professional help in terms of investing your windfall, there are a few other tips to help make it a little easier. The first thing is to do nothing at all! This may sound strange advice, but it will help you to avoid rushing into bad decisions. Take a little time to think about what you will do with the windfall and how you will divide it up to be used. Giving yourself this thinking time will make it less stressful and ensure that you use it rationally.
- Pay off debts and taxes first – once you are ready to start using your new stash of cash, paying off debt should be high on your list of priorities. Living debt-free is the ideal that we should all be striving for, and a windfall can make this a reality. As well as paying off debts such as loans or credit card bills, make sure to set some aside to pay any taxes associated with your windfall. This could be something like inheritance tax if it is money left to you in a will.
- Set some aside in an emergency fund – while investing some of your money is wise so that you earn more moving forward, do not invest it all. It is sensible to set some aside in a bank savings account for emergencies and those times when you need quick access to cash. If you have it all tied up in long-term investments, then you are in a bad situation if you need liquid cash fast.
- Put money into a pension scheme – one very good way to use your new-found wealth is planning for your retirement. For most people, this will involve opening up a pension plan to put money into if you do not have one or paying extra into a current one if allowed. This will help you enjoy your life when you retire and have plenty to live on.
Make sure to treat yourself
As well as all of the above, it is also vital to treat yourself and your family a bit! While you do not want to go crazy, a nice holiday or new car will make sure that you actually have fun with your new windfall. Just do not get carried away and spend it all. If you have recently come into money and need help, then the above are great tips on how to handle it for the best.