There may be times in your life when you experience a “sudden money®” event. This occurs when you receive a windfall of money, expected or not. The most common sudden money® events are an inheritance received from a loved one, or from the sale of a business.
In both cases, you will have investment decisions to make. Our first recommendation for anyone in this situation is to take it slowly. Making quick decisions about anything in your life after a sudden money® event is often a mistake. We find that it takes time for an individual to become accustomed to having cash that can be easily spent.
For the business owner, we recommend that we help him or her understand the significant difference between cash flow from their business and the cash flow from the money they’ve received from the sale of the business. For those with inheritance receipts, decisions often have to be made about integrating their current lifestyle with a new life style and trying to envision what the outcome of that integration might look like. Both of these events take time and the new wealth holder should move slowly.
You may be overwhelmed by the number of different choices available to you. Our job is to help you identify the choices that will make your life better and allow you to choose which of these activities would help achieve that goal.
Some of the activities we help our Clients with when they are making investment decisions with sudden money® events are:
- Creating a financial plan that emphasizes the potential cash flow from different investment options.
- Helping Clients understand what type of long-term market we are in and what a reasonable expectation of returns might be.
- Helping business owners understand that the cash flow from the sale of their business will be much smaller than the cash flow they received while operating the business.
- Helping our Clients understand what is an investment policy statement.
- Helping our Clients implement and monitor the investment policy statement.
- Choosing investments that match the risk and goal profiles of our Clients.
- Ensuring the chosen investments correspond with your investment policy statement.
A well-instituted investment strategy cangive you confidence knowing you’ll have needed cash available as a result of a well-designed financial plan. We believe that combining these two areas will help make your life better.