Skip to main content

How to Manage Large Amounts of Sudden Wealth

Dream of receiving a windfall of money? Maybe the real question is, would you be prepared for good fortune when it happened?

Whether it’s from an inheritance, insurance settlements, severance package, or maybe you hit the jackpot and won the lottery, receiving a large sum of money is a dream for many, however most don’t plan for it in advance. Here are a few things you should think about when managing a financial windfall:

Give Yourself Time to Adjust

Getting a large amount of money at once can be overwhelming so it’s okay to take some time to get comfortable with it. Meet with your financial Advisor to update your financial plan so when you feel comfortable about using the money, you’re all set.

Determine Short and Long Term Goals

Work with your financial Advisor to figure out how to successfully manage the money for your financial goals. This could pay off your mortage or get you to retirement sooner, but your unique financial situation will determine how to best use the money.

If you already have a solid investment plan using this sudden wealth as a safety net instead of adding to the existing plan could be a good choice. This means putting it into an investment with low risk while keeping your current investment plan as is.

Practice Responsible Spending

Receiving a large sum of money comes with a lot of responsibilities so don’t go overboard with spending. You’ll most likely want to buy some things you’ve always wished for, and we don’t blame you, but large purchases should be well thought out.

For example, if you’re going to buy a new car make sure you have room in your budget for insurance, gas, and maintenance costs.

Always do a detailed analysis to see every outcome so that you can be confident you're prepared for all that comes with the purchase and can adjust your budget where needed.

Update Your Estate Plan

With any big changes in your finances it’s smart to revisit your estate plan so it still makes sense for you. Maybe you’re selling a large asset or taking on a new one, either way you’ll want to change your plan based on your decision.

You never know what to expect or when you’ll receive a windfall of money but being prepared will ensure you make the most of it. Book an appointment with one of our expert Advisors to help you determine what your options are.


Need advice? Just ask. 

Select Image