Let’s take a second to dream. Say your long lost aunt kicks the bucket next week and leaves you a million bucks. Will you be SMART about it, or one of those people who blows through it in a year and ends up broke again?
Here are the top five mistakes people make when they come into money . . .
1. Mindless spending. It feels like you suddenly have an infinite amount of cash. So you spend like crazy until you realize it’s NOT infinite.
2. Not getting help from a financial planner. If it’s a lot of money, you might need a TEAM to help you. People who come into money and try to invest it all themselves usually regret it.
3. Making big decisions too quickly. Things like selling your house right away to buy a bigger one, or quitting your job too soon. Don’t make any rash decisions.
4. Taking too LONG to make decisions. Some people just sit on their money because they’re scared they’ll lose it. That’s another reason to get help as soon as possible.
5. Trying to be the hero and paying for EVERYONE. That includes relatives, friends, charities, and even your own kids. Make sure you’re in good shape first, THEN help if you can. And don’t set yourself up so you’re paying for a whole entourage. (CFP)