Difference between revisions of "Managing a windfall"
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==Managing a windfall== | ==Managing a windfall== | ||
| − | + | * '''Take your time''' | |
| − | + | * '''Determine your tax situation''' | |
| − | + | * '''Formulate a plan''' | |
| + | :* '''Paying down debt''' | ||
| + | :* '''Retirement''' | ||
| + | :* '''Charity''' | ||
==See also== | ==See also== | ||
Revision as of 19:27, 4 September 2012
A windfall, in personal finance, is defined as an amount of money that a person gets unexpectedly. Windfalls can range in magnitude from small additions to an individual's wealth to a significant increase in fortune. Since a large windfall almost invariably means huge changes in a recipient's life, psychological and emotional factors are often the most important factors determining outcomes.
 | "Most financial practitioners agree that well over 50 percent [of windfalls] are lost in a relatively short period of time. NBC News reported that more than 70 percent of lottery winners exhaust their fortunes within three years." -Larimore, Lindauer, and LeBoeuf (2006). The Bogleheads' Guide to Investing. Chapter 15, p.180: Wiley. ISBN 978-0471730330. |
Common sources of windfalls
- Legal settlements
- Inheritances
- Gifts
- Lottery winnings
- Insurance settlements
- Retirement lump sums
- Sudden increases in income
Other common sources of receiving large lump sums: [1]
- A real estate sale
- The sale of a business
- Widowhood and divorce
Managing a windfall
- Take your time
- Determine your tax situation
- Formulate a plan
- Paying down debt
- Retirement
- Charity
See also
References
- ↑ Larimore, Lindauer, and LeBoeuf (2006). The Bogleheads' Guide to Investing. Chapter 15, p.180: Wiley. ISBN 978-0471730330.
Notes
External links
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