Plan your Windfall Receipts Well

Last week, a fellow train traveler was discussing with me her marriage ceremony focusing with all the week long “rasam” and about all the unusable home appliances she had received. She was not sure if she should start using them or store it away for gifting it to others. I was tongue tied for a moment, thinking “Oh My God, she wants to get rid of her presents which are indeed her loved ones’ blessings and good wishes.”  However, it came to me as a revelation that she got three food processors and five hand blenders, also couple of dinner wares. I sympathize with her situation; she is in no position to command her desired gifts and has no choice but to pass on her gifts forward.

Financial windfalls can come in varied forms, such as an inheritance, large gifts, structured settlements, retirement lump-sums or even lottery winnings.  Upon receipt, most are not prepared to handle such a large sum and often make many mistakes. It is not uncommon that we are also gifted with unexpected or irrelevant gifts/ assets from our loved ones, which have some financial value, attached to it i.e. like your mother’s designer wear saris or traditional jewelery. Some of the other common gifts received include:

1. Expensive artifacts or paintings
2. Collection of stamps or coins
3. Old home in home town or tier II cities
4. Non dematerialized  Shares & bonds

The most common question we find asking ourselves on receiving them is, “What will I do with this?” or even more confused with the situation “Why me?” In order to find a feasible solution to your query, we would recommend you to follow a three point simple agenda:

1. Bifurcate between ‘I need it’ and ‘I don’t need this’ – Make a quick decision about your gift whether you find it useful or not. If it is usable by neither you nor your near ones, it is best to dispose it at the earliest and best possible price.  However, if want to own the gift, it would be recommended to plan the right utilization of it to maximum growth.
2. Get the latest value of Investible Assets – Accept the ownership titles of the acquired assets and add the latest valuation to your net worth to give you a correct picture of your financial worth. Bring the acquired assets in usable format.
3. Maintain the acquired assets well – Plan a suitable investment plan for the gained asset in the most feasible manner that can help you in wealth creation in long run. Avoid the temptation to splurge the amounts for a temporary gratification.

Windfall receipts are not regular and free of encumbrances, we should be very careful in planning out the utilization of proceeds from the receipts. Take your financial planner in confidence to plan if you are anticipating any such receipts.

Thanks and Regards

Team

Saarthi Financial Planner

Email: saarthifp@gmail.com

Facebook || Twitter || Blog || Google Plus || Blogger