So you have received an inheritance or other windfall

Lucky you! Now, what to do? You are young and find that you can enjoy your windfall starting today or invest for the future.

I have been in the investment business for 35 years and have seen assets pass from my original clients to their heirs. My clients worked hard to accumulate these assets for their own security and for those who would inherit the residual.

I sit down with the beneficiaries, explain their options and, of course, encourage them to invest in their futures.

In two interesting cases, there were two siblings. Two brothers in one case and a brother/sister in the second case. Sadly, all three young men quickly dissipated their accounts. Hopefully, they deployed some of the money in hard assets that have ongoing value.

The young lady prudently took only manageable monthly withdrawals. Her account started at $400k in 2004. She has gradually increased her withdrawals from $1,000 per month to $3,000 per month, totalling $450k over 16 years. Amazingly, her account now totals $672k.

Her example demonstrates the power of fiscal discipline and the power of compound investment returns. Despite her withdrawals, her $400k account earned $717k over 16 years.

Had she made no withdrawals from her account, it would have grown to more than triple to exceed $1.2 million.

Think of a 30, 40, or 50 year time period and the growth your assets could experience.

Many newbies are “investing” for 30, 40 or 50 days and expecting big outcomes. Sorry, but it doesn’t work that way.