The richest inheritance any child can have is a stable, loving and disciplined family life.
Youâve got to be kidding me!
Oh come on now, we can all agree on one thing- inheriting money from your beloved benefactor is nothing less than a blessing. Itâs like entering a cheat-code in the game of life, where a truckload of clean wealth just lands in your lap.
When this happens, youâre probably going to do one of the two things below:
The answer to the question âWhat to do with inheritanceâ pretty much decides your fate. Itâs all about what you do when you see the big money- either you go YOLO! And spend all your money on flashy cars and exotic vacations, or you fix yourself up and change your fortunes.
The average inheritance that benefactors leave for their loved ones is somewhat close to $177,000. Sometimes, the poorest man leaves his children the richest inheritance. You can change the destiny of your future generations if you know what to do with inheritance.
Weâre going to tell you what to do with inheritance money, so if you wake up tomorrow and realize that your beloved Aunt Shirley left you a fortune or (god forbid) when someone in your family passes away and you get a text that reads âYouâve been credited with $$$$ of inheritance moneyâ, you know what to do.
Read more: Can You Inherit Debt From Your Parents?
Okay, first of all, youâre probably grieving the death of a beloved member of your family. You need to calm down a bit, pour yourself a drink (one drink, thatâs all) and remember the good times you had with that person.
Donât go all crazy and spend your benefactorâs hard-earned money on unnecessary stuff. You donât need a boat or a fountain; postpone that around-the-world expedition you planned with your fake friends in a matter of minutes.
Iâll tell you what to do- buy a bottle of scotch; make a toast and say a few words for the person who left you this fortune. It feels good, and you have more time to think about what to do with inheritance.
You got the money? Great! Itâs in the bank? Superb! You can access it in a swipe now? Stop right there.
Assemble yourself a team of professionals; you can call them The Avengers, Justice League, The Fortune SaversâŚ anything. I named my squad The A-Team. Anyway, here are three vital heroes that should be in your squad to tell you what to do with inheritance:
This guy/girl is going to be the Talisman of your inheritance squad. A financial planner will closely look at your financial situation and make a plan for you. This plan will hopefully solve all your financial jitters or reduce them by a hefty margin.
While youâre thinking about what to do with inheritance, the financial authorities are doing their part. More money calls for more complications in taxes and you need a tax planner to sort these out. This person will make sure you donât miss out in paying the government.
Yes, letâs assume for a minute that youâre Don Corleone and this guy is your Consigliere, except in this case your attorney will make sure you donât get conned by people of your inheritance money. Also, attorney cleans up your mess, something that Consigliere does.
If you want to know what to do with inheritance, remember that this money can bring you peace of mind. What can leave you at peace better than the thought that you donât owe anything to anybody?
Pay off all your debts in one go with this money. Not only will you save hundreds of thousands of dollars on interest rates, but you can also be free from this enchanting cycle of paying someone more than what you took in the first place.
Keep a record of how much interest you pay, imagine if all that money went straight into your account? You can also consolidate your debt and then pay it off with inheritance money which would save you more money.
You can put some of the inheritance money in your emergency fund to strengthen it or start afresh. It is good to have an assurance that you have a few monthsâ expenses covered in a locked box.
However, putting it all in an emergency fund would be a waste. You can do so if youâre still thinking what to do with inheritance, but not forever, itâs pointless.
As we stated above, if you let all that money sit in the bank, itâs just going to stay there for time immemorial- now thatâs what you call a bad decision. Guess whoâs come to the rescue? Your Talisman- The Financial Planner!
If youâve paid off your debtors and made an emergency fund too, what to do with inheritance next is to invest. Now that this money in your hand is nothing but clean- these three places would be a great and secure way to start:
If you plan to invest your inheritance money at a place where you have multiple options in relation to associated risk, you can go for mutual funds as the opportunities are endless.
If you want to play it safe, you can invest in growth funds. You gotta play big to earn big though; you can invest a very small portion of inheritance in medium risk/ high risk mutual funds and hope for the best.
In case of real estate, you can procure a rental property and earn life-long income from it. The best part is that if you pay in cash up-front, you can get great deals on real estate.
Now itâs your call to either rent it for a stable income or move in that place and save on mortgage. Weâd recommend buying a renting property from that inheritance money; youâre making a lifelong capital investment when you do so.
What to do with inheritance, something that will make out life easier when we hang up our boots? If youâve already invested in a 401(k), make it stronger by putting cent-percent of inheritance in there.
You have to check if your 401(k) plan really needs that splurge or not- Blooom can do that. First of all, youâd get a free 401(k) plan checkup and any changes that should be made shall be notified. Blooom can be your personal 401(k) planner too for just $10 a month, now thatâs cheap retirement fun!
Your Benefactor was very considerate to leave a fat envelope of cash beneath your pillow- would you do that for your kids? No, Iâm not telling you to give your inheritance money as an inheritance; thatâs just silly.
What to do with inheritance for your kids? You can set up college funds for them and invest this money in a very safe place. Not only will the money grow slow and steady, but your kids will at least start their adult life on the right foot.
Speaking of college life, we hope you pay off your student loan from the inheritance money.
Think about it, if it was you who faced the question of what to do with inheritance, whatâd you do? You would quit your job first thing in the morning, you Sneaky Pete. Quitting your job is the worst thing you can do after inheriting money.
Keep doing what you do, and keep your mouth shut about the inheritance. Spend some time with yourself and think of a business idea instead. When you got it figured, make a website (Bluehost can help you with that) and keep it up and running! Donât quit your job though.
You thought that the celebrations of inheriting money would just stop at a bottle of scotch? Hell no! Make an itinerary to travel the Atlantic, look for new real estate, buy your kids their favorite toys and take your loved one to jewelersâŚ all of that in just 10% of your inheritance money. (Evil Laugh)
Seriously though, if you plan to have fun from your well-deserved inheritance money, make sure you donât spend it all on having fun. These splurges are fun to an extent, but too much fun can take a horribly wrong turn.
This inheritance made a positive impact on your life and youâll forever be grateful to your Benefactor, now itâs your time to make a mark on someone elseâs life. Thank the person who does this for you and donate to charity in his/her name.
You can either do it discreetly or in the open, at your local church or public school, that is your call. But do donate it some part of this money to charity, it feels good. Remember- What goes around, comes back around.
Its fine when the money goes straight into your bank, but what to do with inheritance if it is:
Best way to make the most of these heirlooms is to ask the experts. You can go to the nearby pawn shop and ask what the antiques and baseball cards are worth, sometimes these things are worth millions, you never know.
As for other objects like jewelry and car, you can consider selling them off. If youâre too attached to family heirlooms, you can keep them and they can be a part of your kidsâ inheritance, who knows!
At most times, life doesnât offer a second chance. So if you got an inheritance by the grace of, well, the Benefactor; use it wisely. You got yourself a lifeline, an opportunity to start from a fresh page. Now that you know what to do with inheritance, make it count.