Figuring out what to do when you have won a large sum of money can be difficult. While you don’t want to make the wrong decision and be unwise, you don’t want to be so frugal that you end up missing opportunities that could have made your life so much better. It may be hard to know what to do, but a financial adviser who is familiar with these kinds of situations will be a great asset to have on retainer. Friends and family have great intentions but if they have not been through this before then there is no way for them to understand the pressure that you are under and the decisions you have to make.
Should you sell fixed annuity?
This is the first question to ask yourself. You have the option to sell fixed annuity or get cash for your settlement payments but is that going to benefit you in the long run? Weight out the pros and cons before you sell fixed annuity to see how beneficial that will be to your long term goals and visions. Maybe structured payments would help you to learn how to deal with a large sum of money without wasting it away. On the other hand, if you sell fixed annuity and get cash now, there are things that you could purchase or pay off immediately that have been weighing on you.
How much should go to charity?
Don’t feel obligated to give everything to charity. While some would be beneficial, giving everything away might cause some regrets. It would be more helpful if you set up a fund of something sort and maybe even your own charity if you really want to help. Especially if you have debt, it is responsible and financially wise to eliminate debt before doing anything else with the money. If you don’t want to give anything to charity, you shouldn’t be made to feel guilty. It is your money, you won it and you should be allowed to make the decisions about where it goes. Which leads on to the next point:
Who should you involve?
There is some wisdom in not telling everyone that you have suddenly come in to a lot of money, if you don’t have to. Of course, winning the lottery requires that you not remain anonymous but if you won a court case or received an inheritance, the less people you tell the better. You’ll want to be careful in deciding who will be in the know about your money. They need to be people that you trust and have trusted for a long time. This will eliminate risk of people asking for loans and gifts that you are not prepared to give, knowing they will never be paid back. If you want to give your friends and family money, it should be out of your good intention, not because they demanded it from you and you felt obligated.
How should you invest?
This is definitely a good time to call a financial adviser. Especially if you decide to sell fixed annuity settlement and get all your money at the same time. There are stocks, bonds, houses and more than you can invest in but they are not without risk. You’ll need to run a professional risk analysis to help you decide where you money will benefit you best. Now that you have money you can use it to make yourself more money.
Making these decisions will not be easy but it is doable and soon having the money will not be a novelty and you will find yourself able to make financial decisions a lot easier than you could have right now. You will begin to understand the financial world a little better and see which techniques and methods are beneficial and which are scams.
While selling an annuity settlement can be a scary thought, it may be easier to think about when having to make all these choices. On the other hand you may find that receiving these payments periodically will help you learn how to deal with being rich suddenly without letting it go to your head or change who you are and what you believe.