How to Invest a Windfall

May 30, 2017 | Blog, Wealth Management

Many of us dream about receiving a sudden windfall of wealth. But whether it’s through an inheritance or a promotion, an unexpected influx of cash is more common than you’d think – and it’s no guarantee for long-lasting financial success.

The statistics show that most people who see an uptick in financial success will squander it rather quickly. So even if you don’t plan to make a million dollars overnight, it’s worth seeing how to invest a windfall so you can make your wealth last:

Do nothing (initially)

With a flood of wealth, it can be tempting to have irrational spending patterns and make illogical decisions. That’s why it’s valuable to take a breather and do nothing when you first get a windfall. After you’ve had a pause, you’ll (hopefully) realize that many of those rash choices aren’t the best way to make your wealth last.

Then, map out your long-term goals

If you’re wondering how to invest a windfall, the first thing you should do (if you haven’t already) is to map out your long-term goals and aspirations. This will allow you to view your finances in light of the big-picture, and remove the short-term blinders.

For instance, if you want to retire with a million dollars, you’ll start to realize how investing that windfall in an IRA can get you there. More often than not, you’ll notice that knee-jerk decisions aren’t the best way to make to achieve your most important financial goals.

Utilize an advisor

Don’t discount the value that a trusted advisor can bring to the table. They can be the voice of reason and rationality when your temporary emotions are doing the opposite. An advisor can also provide valuable advice on how to how to invest a windfall for the long-term. As I’ve said before, it’s the patient, long-term lens that best serves prudent investors who want to make their wealth last.

Learn more about how to invest a windfall

At LexION Capital, we’re proud to be a fiduciary firm, and we’re legally required to always put our clients’ interests first. As a client, you can rest easy knowing we’re always focused on achieving your goals and needs. If you’d like to learn more, let’s have a conversation.

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