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Schulfer & Associates, LLC

Managing Suddenly Acquired Money

You may conjure a vision of the fortunate fella or lucky lady who wins the lottery and overnight, his or her financial dreams have come true. Certainly this is one way to suddenly come into a large sum of money that you didn't have to make decisions with before. More commonly though, people who suddenly receive sizeable amounts of money or other assets do so through a divorce, a settlement from a law suit, life insurance proceeds from the death of a loved one, an inheritance, receiving a severance, their retirement package, cashing in their stock options, or from the sale of real estate, a business or another investment.

We are used to receiving our money gradually. That is, we receive income and build our net worth over time. Receiving a large amount of money all at once is very different. You now have money suddenly — more than you are used to being responsible for. This may stir up many emotions – excitement, fear, stress and anxiety, or a general sense of being overwhelmed. We've all heard stories of the person who won the lottery only to find that a few short years later, they are broke. Or, the person who received an inheritance who didn't have a plan or a clear direction for the money, and before they know it, the money has vanished.

If you've received a sizable sum of money in a short period of time, the most important thing you need to have is a plan. Otherwise, you may find your money suddenly gone. Think through what is most important to you over the short term AND the long term. Before you spend money for short term items, albeit important ones, be certain that you are leaving enough to fund your longer term goals too, particularly if that goal includes creating a future income stream. Judiciously calculate the amount of money you have, the time value of that money, and the future withdrawal rate to determine how long your money will last. Remember to include inflation and taxation into your equation, as they can be powerful influences on the future value of your funds. Carefully assess the risks associated with any investment before you commit your money. Understand how your accounts are titled, as well as what the options are and their associated implications for how your accounts may be registered.

We have worked with numerous people who've found themselves the recipients sizeable assets, suddenly, either expected or unexpected and are now out of their financial comfort zone. We can work with you, beginning with an initial consultation. We understand that it is important that you be heard and clearly understood. At our initial consultation, we'll take the time to get to know you, listen to what is important to you, and tell you about us. From there, we will determine if we are a good fit for you, and you for us. We can work to devise both a financial and investment plan to work toward pursuing what is most important to you. Along the way, you can be assured that our communication to you will be clear and concise, and that as we progress through each step, you are comfortable understanding the stages of your plan.

So, if you or someone you care about has received money or other assets suddenly, give us a call. Just as we've helped countless others in this same situation, we are here to help you too.