Sudden Wealth

June 11, 2014

What would you do with an extra $10,000? Pay off some debt? Get rid of some college loans or take a much-needed vacation? What if you suddenly had an extra million or 10 million or more?

Evaluate your new financial position
Just how wealthy are you? You'll want to figure that out before you make any major life decisions. You first impulse is to go buy things, but that may not be in your best interest. Answering these questions may help you evaluation your short and long-term needs and goals.


  • Do you have outstanding debt that you'd like to pay off?

  • Do you need more current income?

  • Do you plan to pay for your children's education?

  • Do you need to bolster your retirement savings?

  • Are you planning to buy a home?

  • Are you considering giving to loved ones or a charity?

  • Are there ways to minimize any upcoming income and estate taxes?


Impact on Investing
What will you do with your new assets?

  • Do you have enough money to pay your bills and taxes?

  • How might investing increase or decrease your taxes?

  • Do you have assets that you could quickly sell if you needed cash in an emergency?

  • Are you investments growing quickly enough to keep up with or beat inflation?

  • Will you have enough money to meet your retirement needs and other long-term goals?

  • How diversified are your investments?


Impact on Investing
You may want to re-evaluate your current insurance policies and consider purchasing an umbrella liability policy.

Impace on Estate Planning
Estate planning involves conserving your money and putting it to work so that it best fulfills your goals. It also means minimizing your taxes and creating financial security for your family.

 

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