What is the best thing to do with a large settlement paid in one lump sum?
I do not have experience with finances outside of living paycheck to paycheck. I am thinking of speaking to a financial advisor, but I don’t even know where to start with that. I currently have the money in my checking account and know that this is not a wise thing to be doing. Any help or advice for a beginner in finance would be appreciated. (The amount is less than 30k, but even that amount is a large amount of money to someone like me).
First thing to do is take the money out and put it into savings, just so you don’t start spending it willy-nilly. Do not sign anything with a financial adviser, as most of them want to sell you products. That is how they make their money. Instead, breathe for a while. Get free information from several sources. Banks will give you differing investment advice, but go to several, and make up your own mind.
In the mean time, are you in debt? If you have credit card debt, pay that down. It is like investing at the 18% you may be paying for the fees. Do you have an emergency fund? You should put away at least six months of expenses and not touch it right now, especially with our bad economy. The best investment for now is a ROTH IRA. You can put in $5000 for 2010, and $5000 for 2011. This should be in a long term account, I prefer Mutual funds, like Fidelity, or American Funds.
You don’t say how old you are, or if you have student loans, or are thinking of furthering your education. Do you have student loans to pay off?
Workers’ Compensation and Lump Sum Settlements | MyPhillyLawyer
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