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Most of us dream of receiving an unexpected windfall, in hope that it would allow us more financial freedom in our lives, whether to pay off our debts or to indulge in a life of luxury. But whether it’s a family inheritance, a sizeable work bonus or a major lottery win, an unexpected windfall is not a guarantee for an easy life in the absence of proper planning and investing.
It is estimated that approximately 70% of people who receive a vast sum of money unexpectedly will squander it in only a few years, according to non-profit National Endowment for Financial Education. Lottery winners are the best example, with many cautionary tales of squandered wealth making the headlines in recent years.
If you are lucky enough to receive an unexpected windfall and aren’t sure how to handle it, check out these 11 useful tips from Forbes Finance Council members to help make your newly acquired wealth last.
Visit the resource to read details about each of the 11 tips!
1. Don’t do anything (initially).
2. Pay off debt first.
3. Understand time horizon, risk, and tax efficiency.
4. Give 10% of it away.
5. Invest, pay down debt, or hold in cash.
6. Examine your financials.
7. Have a plan and stay the course.
8. Save it, pay your debts, or invest.
9. Re-assess your risk tolerance.
10. Pay yourself first.
11. Try the 50/50 plan.