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We won’t settle for average. We continually seek top managers or securities and meld them into superior custom portfolios. Each palette of investments is carefully tailored to personal or family goals. We enlist excellent managers, research, resources, and effort for our clients. Don’t settle for average. You deserve excellence.

Please search our blog posts for answers to common investment questions, and we look forward to sharing our knowledge and experience with you first-hand.

Five Investment Strategies for Windfall Situations

Investment Strategies and Sudden Gains (Such as Tax Returns)

 

If you find yourself with unexpected money, you may also find yourself with questions. For many, receiving an unexpected sum of money is exciting – but it also requires a strategy. Investment strategies for these life experiences don’t have to be complicated; it can be helpful to review the concepts below.

Here’s more to ponder: thinking beyond tax season, the National Endowment for Financial Education found that almost 70 percent of people who hit it big will find themselves in the same situation they were in before obtaining that money.

Recently Forbes asked a dozen investment advisors about investment strategies for windfalls. Here are their top tips to keep in mind:

1. Pay Down Your Debts
While it isn’t as fun as going on a shopping spree, paying down certain types of debt is vital for a brighter financial future. (Note: some debt is good debt. Credit card debt is never good debt. Talk to an advisor about which debt is good and which is bad.)

2. Make Fact-Based Decisions
The first reaction after receiving a windfall might be to spend, spend, spend. However, to sit and do nothing aside from developing an investment strategy is probably your smartest option. Rather than focus on short-term expenditures that satiate your shopping itch, think long-term.

3. Hold on to It
If you have no real debt to speak of, put some of the money into the bank. We never really know what life will give us, which is why setting aside enough to cover three to six months of expenses (“emergency fund”) is wise.

4. Invest It
Before you invest your windfall, you need to ask yourself a couple of questions: is my emergency fund in good shape and are my debts paid down? If you can answer yes to both, consider investing in accounts like an IRA or brokerage account. There are many different options, so talk to an investment advisor about what’s best for you.

5. Addressing Risk
For those who are immediately thinking long-term with this windfall, it’s reasonable to look down the line and assess when you think you might actually start spending this money. You need to assess the risk associated with various investments so that you have a chance at compound returns, yet the risk is low enough so that it will be there for you when you need it. There are also taxes to consider, so talk to your investment advisor about which options fit your goals.

Windfalls can cause a flood of emotions, which we all know is not the best state to be in while considering financial decisions. Do yourself a favor and hold off on making decisions and contact your investment advisor about steps you should consider.

At Family Investment Center, we’ll talk to you about your goals and how this windfall can work toward those goals. Contact us today and let’s build a solid investment strategy together.

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4 Tips for Establishing Good Investment Strategies

Simple Investment Strategies to Get You Started

 

 

Are you a part of the Millennial generation that is being discussed so frequently today? Some of the attributes that have been pinned on you aren’t accurate, nor are they fair, but you’re definitely in a generation that is coming up – fairly new to your career and perhaps struggling to come to terms with investment strategies that will see you through to a fruitful retirement. We have compiled some personal finance tips that can put you on the right path.

1. Your Parents Aren’t Always Right
One common characteristic of Millennials is that they have “helicopter parents.” These are well-intentioned parents who took great interest in every part of their child’s life. They are often thought of as friends for whom you can go to for advice. However, when it comes to helping you develop investment strategies, you have to realize your parents’ situation is entirely different from yours.

There is a good chance that the strategies your parents developed for themselves will not work for you. You shouldn’t have your retirement account invested the same way someone from another generation does. You need to look at what you want to accomplish and align with the best investment strategies for your unique personal situation.

2.  Look at Your Finances Often
It can be a source of stress when you’re constantly on a tight budget, but you need to avoid ignoring your finances, as that will make developing a plan more difficult. You’re not always going to like what you see, but at least you have the option to be proactive rather than reactive.

3. Look for Inefficiencies in Your Budget
It’s understandable that as you pay down your student loans and pay all your bills on your base salary, the money you put toward investments may not be a large amount. However, making small cuts to your budget can give you a nice little boost now that could turn into a lot of money later on.

Cable television is one expense that might feel painful to cut out at first, but that extra $100 (or more) per month can do wonders for an investment account. From clothing purchases to eating out, find areas where you can make small changes.

4. Take Advantage of Automatic Contributions
Many employers offer retirement plans with a company match. If your company has this, you’re losing money by not signing up. If your workplace doesn’t offer a plan, consider setting up an IRA and have money directly deposited into it each month.

At Family Investment Center, we’re committed to helping our clients find the right path to financial freedom. Contact us today and let’s discuss where you want your own personal “freedom tour” to take you.

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