Financial Planning for Personal Injury Settlement
Ever been at the receiving end of an accident and got a large amount of money in the form of damages? Be it a personal injury settlement or compensation for a car incident, we hope you know what to do with this cash.
This reflects your brilliant lawyers’ success, such as Jones Whyte Law Personal Injury Lawyers in helping you get justice or gain financial damages. However, do not worry if you feel a little lost or a bit confused on how to optimise your settlement savings. Clearly, you are a smart cookie and are doing your homework. That is what has brought you to this page- and you are in the right place!
What kind of cash could this entail? It could be anything and range from large cash bonuses to cash settlements to structured settlements. This volume of money will tend to change your life. Maybe you got a large sum of inheritance from a loving aunt, a new sign-up bonus or a healthcare insurance policy paid off. You really need to sit down and have a think about what you want to do with this money. Making spontaneous decisions whereas your personal finance are concerned is highly ill-advised. The wrong move could create significant losses which you do not want to regret.
Here are nine smart things you can do with your settlement money.
- Know how much tax you owe
There are quite a few scenarios that you could be in. As mentioned earlier, maybe you got a wicked new job and received a sign up advance. Or, you spent some money on legal fees to gain a settlement. What you need to do know is whether your money will be subjected to taxes. What we recommend is that you speak to a professional, such as a CPA or a lawyer, to determine whether the nature of your settlement is exempt from taxes.
- Make a plan
It is always best to outline a roadmap of what you want to do with your settlement. Maybe you want to purchase a house or invest in a retirement fund. Do you want to give some to charity? Think about what you want and give it a structured plan. In fact, do one better, and create a contingency plan as well. Remember, it is always better to be safe than sorry later.
- Bring a professional onboard
If the sum is truly massive and you are not sure how to invest it or to best maximise its advantages – bring a financial expert on board who can guide you on what to do. He will be able to tell you which mutual or hedge fund is the best, which property you can buy etc. In essence, he will direct you on how to best diversify your investment portfolio. Of course, you need to do your homework as well and be aware of the market instruments that are available at your disposal. Mate, this is how you avoid getting scammed!
- Keep learning and improving your knowledge
Always wanted to go to postgraduate school? Now is your chance! Just because you have come into a pile of cash, it does not mean that you stop pursuing your path of self-improvement. Take an online class or a part-time schedule if your daily routine is too hectic and does not allow you to return to school full time.
- Secure a life insurance policy
Investing in a life insurance policy will keep your loved ones safe from any form of economic burdens. Make sure that you can afford the monthly premiums. Scan the market and see which life insurance service provider is most suitable to cater to your needs.
- Invest in financial instruments
Be it real estate, a share in someone’s business, stocks, securities etc – get your hands on some investment. Buy property and rent it out. It will keep you liquid for years to come as it will only accelerate with time. The best part is that it can be inherited by your family or offsprings and secure their future as well. No matter what financial instrument you go for- just make sure you know the risks and rewards associated with it.
- Give back to society
What better time is there than to give back to the society that you were raised in? Fund an after-school program in a poor district near you or make a donation to your local church. A small dab of your generosity could make a huge difference in someone’s life. These donations will be tax deductible too when you account for your yearly taxes.
- Invest in your house
Want to build a brand new bedroom suite? Go for it. Hire the best construction crew and architect possible within your budget and invest in your home. These kind of additions will only help the value of your house to appreciate. Another thing that you could do is to sell of your current home and buy a bigger, better new one. You see, there is so much you can do!
- Clear all your debts
Okay, we have to be honest with you. My friend, if you come in to a hefty sum of money, the first thing you should do is to clear yourself of all debts. Be it a credit card bill or a personal loan, do not default. Clear your name and your conscious. Get your credit rating back up! It is such a great feeling to know that you are truly liberated from the clutches of debt. There is nothing holding you back. Then, you are really free to start afresh and open a new chapter of fiscal success in your life.
One more thing, do not forget to put away a nice sum for a rainy day. By this, we mean to put aside a good sum for any unanticipated emergencies. This could be a health crisis or could serve you well after your retirement. Hey, if nothing else, take it and travel the world!