When you come into money it’s always an exciting time.
However, when the money comes from a deceased loved one, it’s not so exciting, because nobody wants to have to lose someone they love in order to gain something.
While it’s nice that you were thought of in a will, you still have to consider what you should do with the inheritance rather than just sit on a large amount of money.
An inheritance can certainly be complicated, but with the help of qualified financial advisors, you can manage the money with ease and without losing all of it overnight. You should feel confident that you’re going to be able to manage the money you’re about to receive, and that you’ll be able to make it last.
To do that, though, you need to bear in mind some key things.
Tips on What to Do with an Inheritance
Speak to a financial advisor
If you want to ensure that you don’t accidentally squander your inheritance, you need to speak to someone knowledgeable about money.
If you do, you’ll find that their expertise gets you where you need to be.
Research how fast the average person blows through an inheritance and then make a point of not having that happen to you. The worst thing that you can do with your investment is pay money on something you cannot maintain, so you need the right advice.
Don’t sit on the cash
There are some do’s and don’ts when it comes to your inheritance, and sitting on your cash is not a good thing to do!
It may feel like a safe option, but the risk of inflation catching up and the potential to miss out on money that you could have been spending means that sitting on it is a bad plan. You should make a point of investing it, and if you’re too afraid to, get some advice and ride that wave.
Don’t buy anything you cannot manage
It’s vital that you think ahead.
Your inheritance might afford you something wonderful, but if you spend out the cash and then cannot maintain the item you’ve bought, you will end up regretting it. So, don’t spend out on a house if the taxes won’t be easy to manage once the money runs out.
The book Rich Dad Poor Dad talks a lot about this concept.
Be smart about what you can afford
If you inherited property, make sure that you can keep it going.
Not all inheritance is cash based, and that should be remembered. It’s nice to increase your net worth on paper but if you are going to struggle to keep that going, you need to do all that you can to sell on so you can manage the affordability.
Diversify
It sounds like a great idea, but putting all of your money in one area is not a good way manage it.
You want to be able to diversify your new portfolio, and that’s why you need to speak to a financial planner. If you don’t have those conversations, you’re going to struggle to keep up with your inheritance and manage it appropriately.
Final Thoughts
It’s nice to be thought of as an inheritance, but if you don’t consider how to manage the money once you receive it, you might struggle to be able to keep that inheritance going.
Try not to get starry-eyed from the prospect of all that money coming in, and make sure that you stay informed and look after it wisely.
After all, that’s what your loved one would have wanted.
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