What to Do When Money Finds You
“If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed” — Edmund Burke
3 min read
What to Do When Money Finds You
“If we command our wealth, we shall be rich and free; if our wealth commands us, we are poor indeed” — Edmund Burke
3 min read
Life sometimes surprises us with unexpected wealth. Whether you’ve received an inheritance, won the lottery, sold a property, or even received a substantial bonus at work, managing sudden wealth requires careful consideration. Here’s a practical guide to help you navigate these turn of events.
Pause and Breathe
First, take a deep breath. Sudden wealth can be overwhelming, and rash decisions may lead to regrets later. Give yourself time to absorb the news and adjust to the idea of having more money than before.
As you pause, it’s essential to understand that this isn’t just about money; it’s a significant change in your life. Consider how this newfound wealth might impact your daily routine, your relationships, and your long-term goals. Reflect on what truly matters to you and what you want to achieve.
Seek Professional Advice
Consider consulting with Financial Advisers and estate planners. They can provide insights on how to minimise tax implications, invest wisely, and create a long-term financial plan.
Professional advice is invaluable, especially when dealing with substantial sums of money. Your Financial Adviser can help you make informed decisions based on your unique circumstances and goals. They can guide you in optimising your investments, managing risks, and preserving wealth for generations to come.
Pay Off Debts
If you have outstanding debts, such as credit card balances or loans, consider using some of your newfound wealth to clear them. Reducing high-interest debts can free up more money for your financial goals.
Debt repayment might not be the most exciting use of your newfound wealth, but it’s a financially responsible move. Eliminating debts can bring you peace of mind and help you redirect your financial resources towards more meaningful objectives. Plus, it can improve your credit score, which may benefit you in the future.
Emergency Fund
Ensure you have an adequate emergency fund. This safety net provides financial security during unexpected events and can prevent you from dipping into your newfound wealth for unexpected expenses.
An emergency fund is a cornerstone of financial stability. It ensures that you’re prepared for life’s curveballs without derailing your long-term financial plans. Aim to have at least three to six months’ worth of living expenses set aside in a high-yield savings account.
Diversify Investments
Avoid putting all your money into a single investment or asset class. Diversifying your investments can help manage risk and provide a more stable financial future.
Diversification is a fundamental principle of investment strategy. By spreading your investments across various asset classes, such as stocks, bonds, real estate, and alternative investments, you can reduce the impact of a poor-performing asset on your overall portfolio. Consult with your Financial Adviser to create a diversified investment portfolio tailored to your risk tolerance and goals.
Create a Financial Plan
Work with professional Advisers, such as Patterson Mills, to develop a comprehensive financial plan that aligns with your long-term goals. This plan should account for your retirement, children’s education, and any other financial aspirations.
A well-structured financial plan acts as a roadmap to your financial future. It outlines your financial goals, investment strategies, and savings targets. Regularly review and adjust your plan to accommodate changes in your life, financial situation, and goals.
Budget Wisely
Even with newfound wealth, budgeting remains crucial. Develop a realistic spending plan that ensures you’re living within your means and not overspending.
A budget helps you manage your finances efficiently and avoid unnecessary expenditures. It can also help you strike a balance between enjoying your newfound wealth and saving for the future. Consider working with a Financial Adviser to create a budget that aligns with your financial goals and lifestyle.
Enjoy but Don't Splurge
Whilst it’s tempting to splurge on luxuries, consider balancing enjoyment with prudent financial decisions. Prioritise your long-term financial security alongside immediate gratification.
Enjoying your newfound wealth is natural, but moderation is key. Set aside a portion for indulgences, but also allocate funds towards your financial goals. By striking a balance between enjoying the present and securing your future, you can make the most of your sudden wealth without jeopardising your financial well-being.
Your Path to Financial Prosperity
Your sudden influx of wealth, whether through inheritance, a lottery win, property sale or any other method, can be both exhilarating and daunting. It presents a unique opportunity to make smart financial decisions that can impact your life for the better. By following these steps and seeking professional advice from Patterson Mills, you can navigate the twists and turns of newfound prosperity with confidence.
Remember, wealth is a tool to help you achieve your goals and lead the life you desire. Embrace this financial gain, but do so with careful consideration and a well-thought-out plan.
Get in touch with us today and book your initial, no-cost and no-obligation meeting. Just send us an e-mail to info@pattersonmills.ch or call us direct at +41 21 801 36 84 and we shall be pleased to assist you.
Please note that all information within this article has been prepared for informational purposes only. This article does not constitute financial, legal or tax advice. Always ensure you speak to a regulated Financial Adviser before making any financial decisions.
