Disclaimer: Any advice provided in this discussion is only general in nature. For advice that relates to you personally, please seek the advice of a qualified and trained professional.
“Lump sums” are an amount of money to arrive into people’s lives sometimes as a surprise, sometimes by program. There are a number of ways that it can happen including retirement, sale of business, redundancy, inheritance or winning a prize, lottery or large sum of money. In any case it is a time to make a consideration about the way it will work for your life into the future.
The fact is that many people are not armed with the knowledge and forethought when the times comes to make the best choices about their financial future. The “rush of blood” from sudden windfall could see the money disappear too quick to give lasting benefits to the person’s life time.
Often there are tax advantages of a programmed approach too lump sums as well.
Redundancy is a time to make some choice and too often we see people take a one year holiday to travel the world to return with little money to start the next part of their life. It may be that the redundancy is an unwelcome surprise and the emotions can run deep. In any case, it pays to make some plans about life and finances going forward. Perhaps have been made redundant, a new job role of new business can be planned for a year later, THEN go on the round the world trip.
In the case of lottery wins, the organisers have come to recognise that the windfalls don’t always bring long term benefits to the winners and we hear that lotteries now look to give money over time. Support for winners to plan their financial future is also know to happen.
The fact is that a “lump-sum” is a rare opportunity to set up life, instead of pursuing the passion project that may drain finances way too fast.
The key is to not put all your eggs in one basket is the mantra in the majority of cases.
In any case, it is a good idea to get the right advice that’s tailored to your circumstances by contacting Helen Baker today. You can even check out her book called On Your Own Two Feet for further valuable insights.