The Koyal Group Private Training Services: How To Manage A Cash Windfall

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The Koyal Group Private Training Services How To
Manage A Cash Windfall
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Many of us fantasize about winning a big lottery
jackpot. Lets say that actually happened? What
would you do with the money? How would you manage
it?   While winning the lottery is a real
longshot, cash windfalls are not that uncommon.
People inherit money or receive a life insurance
payout when someone dies, they sell businesses or
professional practices, they win a judgment in a
lawsuit, receive a sizable divorce settlement, or
take a 401(k) rollover or lump-sum distribution
from a pension account all of which can result in
a sizable windfall. (For related reading, see
Are Pension Buyout Offers a Good Idea.)   The
number 70 seems to be a common one in terms of
the percentage of lottery winners and retired NFL
and NBA players who end up in financial
difficulty. If you're the recipient of a cash
windfall what should you do, how should you
manage it?
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TAKE A STEP BACK There is no rule saying that
you have to do something with the money right
away. In fact many financial advisers would
counsel you take some time and do some financial
planning. This is especially true in the case of
a large and possibly unexpected windfall. (For
more, see What Kind of Financial Plan Makes
Sense for You.)   Dont succumb to pressure from
family, friends, or pushy financial sales types.
Its your money and your life. Get the financial
guidance you need, take the time to plan out what
you want to do with the money, and then move
forward. Refrain from making rash spending
decisions.
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HIRE HELP Depending upon the size and the nature
of the windfall you will want to assemble a team
of experts that might include a financial
adviser, a tax professional, and perhaps an
attorney for any estate planning issues created
by the windfall. (For more, see Fee-Only
Financial Advisors What You Need to Know.)   If
the windfall was an expected one, such as a large
retirement plan rollover or proceeds from the
sale of a business, you quite likely have been
working with a financial adviser or tax
professional or both already. Lean on these
trusted advisers for help in managing this
windfall.   In the case of an unexpected
windfall, your team of advisors is even more
important, especially if you are not accustomed
to having money to manage.
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HIRE HELP CAREFULLY Im frequently amazed when I
read about professional athletes who have made
tens of millions of dollars over their career who
end up in financial trouble. Likewise, with
winners of the lottery who go broke.   Often this
is attributable to having received bad financial
advice, or worse, having been the victim of
financial fraud. While there is no surefire way
to ensure that you dont hire a bad adviser, it
pays to interview several and to do some checking
on them. Check out this guide to choosing a
financial adviser from NAPFA.
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DEAL WITH THE EMOTIONAL ISSUES Windfalls such as
an inheritance or a divorce settlement will
likely also come with some emotional issues. The
death of a loved one is always tough to deal
with. Divorce may entail anger, sadness, and a
feeling of being alone. In the case of a widow or
divorcee, this might be the first time that
youve had to deal with your finances on your
own.   Its important to let yourself deal with
these issues and not to make hasty financial
decisions based upon these emotions. Also
important dont let any financial adviser talk
down to you because you are inexperienced in
dealing with financial issues. (For more, see
Winning the Jackpot Dream or Financial
Nightmare.)
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LEARN TO SAY 'NO Once family and friends get
wind of your newfound wealth you might find them
lining up for a handout. Certainly, helping those
close to you is good thing, but you need to set
limits and you also must learn to say no. Who you
help financially and to what extent will depend
upon your circumstances, relationship dynamics,
etc. Failing to set limits here is a great way to
end up broke.
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PLAN, PLAN, PLAN The key to your financial
success in terms of managing your windfall is to
plan. Specifically have a financial plan in
place. Define your overall financial goals and
put a price tag on attaining them. Has your
windfall gotten you to where you want to be in
terms of providing your children with a college
education or being able to fund a comfortable
retirement? Has it significantly narrowed the gap
from where you are to where you want to be? Is
the windfall enough to allow you to alter your
current lifestyle and still achieve your
long-term goals?
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THE BOTTOM LINE A cash windfall can be a life
changing event, especially if it is unexpected.
You want to make sure the impact on you and your
family is a positive one, even if the windfall is
the result of an unhappy event such as the death
of a loved one or a divorce. Make sure that you
take some time to do some internal planning and
soul searching. Most of all hire a team of
competent financial advisers to help guide you in
doing a financial plan, investing the money, and
dealing with any tax or legal implications that
might accompany the windfall. Its your money,
take control.
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The Koyal Group Private Training Services designs
its online and on-site training to your
particular needs, providing information you can
apply while in training in order to reinforce the
efficiency of that information. Our coursework
qualifies state standards both for fraud and
continuing-education upgrade. Our programs are
adaptable and can be presented in various formats
to address industry requirements and standards.
Please visit and check our course
listings. http//koyaltraininggroup.org/