As exciting as receiving an inheritance is, it can also feel overwhelming. After all, we’ve all heard the horror stories of inheritances being squandered away within a few short years. With the right inheritance investment strategy, you can put your inheritance to good use in the short-term and plan ahead for the long-term.
If you recently received an inheritance, consider the following investment tips:
1.Take Your Time
Most inheritance investment mistakes come from rushing through financial decisions, resulting in the loss of a portion – or all – of the inheritance. Avoid making important financial decisions while grieving a loved one. There is no harm in placing your inheritance in a savings account until you feel ready to make sound financial decisions.
2.Determine Your Goals
Defining financial goals is key to finding the right investment strategy for your inheritance. Do you have an emergency fund? Substantial credit card debt to clear up? Are you saving enough for retirement? Once you know your financial goals, your financial advisor can put together a recommended investment strategy for your inheritance.
3.Weigh the Risk
The best investment strategy for your inheritance will vary depending on your risk tolerance. Risk tolerance typically changes as you age, starting with a higher risk tolerance in your 20’s and 30’s and becoming more conservative as you age. Consult with your financial advisor to asses your risk tolerance and choose the best investment and asset allocation strategy* for your inheritance.
4.Build Your Portfolio
After assessing your risk tolerance, you can potentially start building your portfolio with a combination of stocks and bonds. Remember, a flashy portfolio isn’t always better. Your financial advisor can help you create a diversified portfolio* aligning with your financial goals, both long and short-term, and risk tolerance.
5.Revisit Your Portfolio Regularly
Just as with your physical well-being, regular check ups are a necessary part of maintaining your financial health. Work with your financial advisor to ensure your portfolio is still working towards achieving your financial goals.
With the right investment strategy, you can put your inheritance to work in accomplishing your financial goals. Contact a Fifth Third Bank financial advisor to get started.
*Asset Allocation and diversification do not assure or guarantee better performance and cannot eliminate the risk of investment loss.
Fifth Third Bank does not provide tax or legal advice. Please consult your tax adviser or attorney before making any decisions or taking any action based on this information. This information is provided for educational purposes only and does not constitute the rendering of tax or legal advice.
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