We all know what it’s like to lose money. And, just as it’s easier to fall down than it is to get back up, losing money is something we deal with more often than suddenly gaining it.
But, sudden acquisitions of money do happen in the lives of most people. And, even if we’re just talking about a few hundred or thousand dollars, these windfalls can be game changers for the average person.
Because windfalls are most significant in the lives of people who are not prepared for them, it’s best for everyone to have a plan for what they’d do if they got their hands on some cash all of a sudden. Remember, this can happen a lot of ways: inheritance, settlement, game winnings, etc.
Check out more ways at the Cash in Your Annuity Blog. If you get a windfall this way, or through some novel method I haven’t thought of, make sure you are ready well in advance to make sure this money lasts a long, long time. Here’s how people…don’t do that.
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When Things Go Unexpectedly Right
They Get Cocky. Some people get ahold of a windfall, and they can’t shut up about it. They post about it on Facebook. They buy an amazing car that just screams “Money!”. They brag to all their friends and family. This can backfire in many ways.
First, you can spend all your money before you’ve paid any taxes on it, leaving you with a big ol’ bill come tax time, one that you are unprepared to pay. Other people who make the above windfall failure get inundated with friends and relatives asking for money.
This can be a very awkward situation. And don’t think it won’t happen to you. There’s always someone in your life who needs the money, and may find a way to kind of ask without asking. You don’t want that. It’s much better to spend nothing and tell no one, for a period of at least a couple months.
Better yet, start implementing a specific, useful plan for the money. Then tell everybody once the money is tied up, if tell people you must.
They Get Freaked Out. Some people get a lot of money and think “This is too much responsibility!” There is a whole breed of duplicitous financial folk who would love to cheat you out of a chunk of your cash, all for help that isn’t really help and bad deals you don’t need.
To avoid this, my advice is the same as the above. Just sit on the cash for awhile. Don’t do anything with it or tell anyone until you have a good plan, that you understand.
They Go Crazy. Some people get a windfall and suddenly start living like their life is Drake music video…for about 12 days. Then, out of money, they rejoin their regular broke life with nothing to show for their one-time fortune. Don’t let this be you.
As above, wait out the excitement and make a plan with a certified financial professional to make your money last and work for you for a long time to come.
If you follow my advice, your windfall will be around forever. And it’ll grow! Let your windfall improve your life for the rest of your life, not just for a few magical weeks.