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If you are fortunate enough to receive a financial windfall, consider common pitfalls and assess the potential of your financial gain.
What would you do if you received a major financial windfall? Would you buy a new house or vacation home, give money to your family members, donate to your favorite charity, or travel like you’ve always dreamed of?
While many people will not receive a major financial windfall, or unexpected financial gain, during their lives, it is not uncommon. You might receive sudden wealth by:
So, while receiving a sudden appearance of a large amount of money may seem great, it can also have significant impacts and challenges. For example, according to the National Endowment for Financial Education (NAFE), an estimated 70% of people who receive a large lump sum of cash won’t have any left within a few years.1
However, handled properly, receiving a financial windfall can be a huge boost and help you achieve many, if not most, of your financial goals. So, let’s look at some of the possible issues you might face and how you can effectively navigate them.
One of the major keys to preserving your newfound wealth is to avoid traps and manage challenges like the scenarios below:
If you, a family member, or someone else you know is somehow fortunate enough to receive a financial windfall, below are four steps that we recommend taking to help you best realize its potential positive impact.
Receiving a major financial windfall can give you and your family financial security and provide you with opportunities you never thought you might have. To help set yourself up for success, avoid the pitfalls and follow the steps above to help you best realize the potential lifelong benefits your new wealth has given you.
1 8 Smart Ways to Handle a Financial Windfall, Alert Investor Staff, www.finra.org October 27, 2015
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