What Should I Do With A Large Lump Sum Of Money

Did you just win the lottery, receive a large inheritance, or win a lawsuit settlement? If you just won the lottery I would recommend being wise with that money since 70% of lotto winners lose or spend all their money in five years or less (Source: Reader’s Digest; link below). Being smart with an inheritance or lawsuit settlement is just as important. Here are some steps you may want to consider when deciding what to do with your newfound wealth.

1. Don’t Do Anything

   You might want to buy a fancy new car, go on an expensive vacation, or be generous by sharing the money with friends and family. There will be plenty of time for those things, but you should take a month to let everything settle first. Carefully consider who you are going to tell about the money. Don’t quit your job. Don’t go around bragging or posting about it on social media. Don’t put all of it into the hot stock of the month based on a Reddit forum. Continue living your life as if you never received the money. You will make better decisions once your endorphin levels have settled back to baseline.

2. Contact a Certified Public Accountant (CPA)

   The IRS loves when people receive large sums of money, and you can bet that they want a piece of the pie. Often, that piece ends up being much larger than you’d prefer, so finding a CPA that specializes in taxes should be a top priority. They could help you strategize a plan to reduce the tax burden and leave more money available for other things.

3. Contact an Attorney

   An attorney is able to explain the benefits of having a will, a trust, and a DPOA for finances & healthcare. They should be able to help you complete these if needed for your particular situation. If you already have these in place, this might be a great time to review and update any if needed. Having these in place will save your family many headaches when you eventually pass away.

4. Contact a Financial Advisor

   A financial advisor is able to help create a written plan for your money. This could include paying off high-interest debt, opening and/or maxing out retirement accounts, funding a brokerage account, evaluating the need for term life insurance, building out a net worth statement, starting a donor-advised fund, and determining your risk tolerance to create your ideal asset allocation. When searching for a financial advisor you want to make sure they:

   • Are a Fiduciary: Which means they have to put your best interests first!

   • Are a Fee-Only Advisor: This means they do not have a conflict of interest with potentially selling you certain investments to get a large commission.

   • Have a Clear Investment Strategy: Do they have an investment strategy that can be clearly explained to you and matches your investment philosophy?

     I am proud to say that I check all 3 of these boxes in my financial advising practice.

5. Implement Your Plan

   While creating your financial plan might sound like the hardest part, implementing your plan may be more difficult. A written financial plan of how you want to direct your money is great but if you don’t take steps to implement that plan then it was all for nothing. When implementing your plan keep in mind:

   • Not to let emotions control your financial decisions.

   • Don’t let the news media tempt you into making quick, spur-of-the-moment decisions during periods of market volatility (Remember the main goal of news media is to attract viewers, not to give solid financial advice).

   • Stay consistent and reach out for help if needed. Investing is a marathon, not a sprint.

   A patient going for physical therapy could perform all their therapy on their own if they knew the correct exercises. Having a physical therapist guide which exercises will be the most effective and support/encourage the patient in completing them, could help the outcome tremendously. Partnering with an excellent financial advisor is similar.

6. Finally, Treat Yo Self!

   If you have made it to this point and are implementing a well-thought-out financial plan, you should congratulate yourself. You did the hard work and made the tough decisions to set yourself up for success. Now might be the time for you to use a small portion of that money to Treat Yo Self as a reward!

Sources: https://www.rd.com/list/13-things-lottery-winners/ https://rochesterlawcenter.com/services/durable-power-of-attorney-michigan/ https://www.youtube.com/watch?v=gSjM5B3QNlw

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Fiduciary Financial Advisors, LLC is a registered investment adviser and does not give legal or tax advice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. The information contained herein has been obtained from a third party source which is believed to be reliable but is subject to correction for error. Investments involve risk and are not guaranteed. Past performance is not a guarantee or representation of future results.

5 Tips to Stop Fighting Over Money

1. Talk About Money When You’re Rested & Calm

Lack of sleep can really affect our attitudes. I think we can all agree to that. I don’t know about you, but I can think of a couple of times (or a few) when I thought it would be a good idea to discuss a sensitive topic while my husband and I are getting into bed for the night. Spoiler alert: it never goes well. This relates to money talks too. Make sure you are both rested and calm. Don’t go into the conversation already heated. We all know where that can lead. And hey, while you’re at it, might as well make sure you’re not hungry either (ever heard of hangry?).

2. Proactive Versus Reactive

Having money talks regularly helps get you on the same page as your spouse and helps keep you there. Expressing your concerns, fears, goals, and expectations before a problem arises makes for a lot fewer arguments. Picture this: a reactive situation would look like me using the credit card to pay for my latest Target run. Because my husband and I weren’t being proactive, I didn’t know he wanted us to pay off the credit card this month and not add more to the balance. The results? It ended with a fight after the damage was already done. A proactive situation would have looked like my husband and I clearly communicating our expectations. I would have paid cash for the Target run and the fight wouldn’t be there. Don’t wait for a problem to arise. Be proactive and clearly talk about your expectations. 

3. Stop Interrupting

Whether you agree with what your spouse is expressing or not, don’t interrupt. I cannot express this enough. Do you know how much appreciation is felt when you actively listen and acknowledge what your spouse is saying? Let me fill you in - it’s a lot. I know, it is easier said than done. Especially when you think your answer is the best. I’m not saying to throw your input out the window. But what I am saying is to simply acknowledge what the other is saying and do so without butting in. You’d be surprised by the amount of respect it resembles. 

4. Always Fall Back on Your Priorities 

Let your priorities ground you. If you can’t seem to agree on something, fall back on what you decided was important to you two in the first place. Think of your priorities/goals as your center. The action steps you two take should orbit around your priorities or around your “center”. Whatever you are arguing about, ask yourselves “does this relate to our priorities?”. If yes, then great, keep at it. If not, remove it from your “financial universe”. This way of thinking brings you back to what’s important and keeps you on track. 

5. Marriage Is All About Compromise

Sorry if you are sick of hearing this, but it’s true. Marriage really is all about compromise. Whether that is who gets to pick the movie tonight or compromising when it comes to a financial decision. If this is hard for you, keep practicing. Sacrificing is not always easy but I promise you, you will learn to appreciate the compromise in your marriage and see it as a beautiful thing.

Here, at Fiduciary Financial Advisors, we take our fiduciary oath seriously. We hold these five principles:

1. I will always put your best interests first

2. I will avoid conflicts of interest

3. I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional

4. I will not mislead you, and I will provide conspicuous, full, and fair disclosure of all important facts.

5. I will fully disclose, and fairly manage, in your favor, any unavoidable conflicts

How to Communicate with Your "Nonfinancial" Spouse

In marriages, it’s common to have one spouse who enjoys the finance part more than the other. Do you get excited to do the budget each month? Do you know your retirement account balances at all times? Can excel sheets provide you happiness? If you answered yes to any of these questions, there’s a good chance you are that one spouse. (Disclosure: this is 100% me). But what about your spouse who doesn’t seem to share in your financial giddiness? I’m here to tell you their input on your financial life is just as important - even if they don’t smile when they hear the word “excel”. Let’s dive into how you can include your “nonfinancial” spouse in a way they want to be included. 

No Assumptions Here

A conversation around how much info they want to know is a must. Don’t assume they want to walk through every little detail of the budget with you, but also don’t assume they want to take the word “budget” out of their vocabulary. It is as simple as asking, “would you like to do the budget with me or would you prefer to know a general update?”. Most times, they just want to hear “we did good this month” or “hey, we need to cut back on eating out”. Opening up this conversation takes out the guessing and immediately puts you two on the same page.

Less is More

9 out of 10 times you will find your spouse simply wants a taste of your financial well-being. This does NOT mean they don’t care about your financial health (gasp!). This simply means a brief overview will give them comfort. My husband and I decided that giving him a quick “here’s what we were able to put toward fill in the blank this month” makes him feel he has a good handle on where we’re at but not too much to put him to sleep. Plus, I give him general updates on our saving account balance and goal progress. After having the conversation we talked about earlier, you will understand if your spouse needs more or less. Typically, less is more in the “non-financial” spouse’s mind and yes, that means they still care. 

Hear Them Out

If your spouse has an idea or a financial recommendation, let them be heard. Sometimes as the financial spouse, we tend to think we know all the answers (guilty!). I have found myself quickly shutting down my husband’s ideas or concerns because, well I’m the financial spouse! And that means I must have all the perfect answers, right? Nope. Remember, your financial plan is built around both of your goals, dreams, and hopes. Just because you were able to crunch some numbers, design a seamless timeline, and constantly know your status does not mean it is a one-sided plan. Allow your “non-financial” spouse to be heard. I also have found that my husband’s ideas actually make a lot of sense and provide a new perspective. 

They Care, I Promise

If you don’t record your daily steps, how many calories you took in for breakfast, or check your heart rate every 30 seconds, does that mean you don’t care about your body? Absolutely not. Think about your spouse’s perspective in this way. Just because they aren’t constantly checking the pulse of your financial health does not mean they don’t care. They do. The sooner you can learn that and understand that about your spouse, the clearer the communication will be. Sharing is caring but sometimes too much sharing is not caring. 

By not making assumptions, giving brief overviews of information, allowing them to be heard, and understanding your spouse does care are ways you can love your “nonfinancial” spouse better. Like I always say, financial intimacy is just as important. Money can be hard in marriage and can cause a lot of stress between the two of you. It all starts with open communication and understanding your spouse better. Take these tips and techniques with you as you power away entering data into your excel sheet (now, without your spouse falling asleep in the chair next to you). 

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Here, at Fiduciary Financial Advisors, we take our fiduciary oath seriously. We hold these five principles:

1. I will always put your best interests first

2. I will avoid conflicts of interest

3. I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional

4. I will not mislead you, and I will provide conspicuous, full, and fair disclosure of all important facts.

5. I will fully disclose, and fairly manage, in your favor, any unavoidable conflicts

How to Actually Keep Your New Year’s Resolutions

New Year’s Eve has passed, the ball has dropped, our resolutions are made, 2021 has begun. I love the New Year. There’s something about getting motivated to be better and to do better.

You know what I don’t love? February, March, maybe even mid-January when our motivation toward our new goals runs and hides. We’ve all been there - killing it the first few weeks then falling back into comfortability.

I’m here to shed some light on how we can keep our New Year’s resolutions. I believe this is just as important as making your resolutions in the first place. Here are five simple steps to kill it the whole year:

You’ve Got a Friend in Me

Support, support, support. I know this one is cliche and you’ve probably heard it a million times, but there may just be a reason that’s the case.

Trying to make some major dents in your debt, increase your retirement savings, actually use your gym membership? Team up with your spouse, a close loved one, a friend, literally anyone who will encourage you and check-in with you.

Whoever it is you choose, discuss how often they will check-in and return the favor. Teamwork makes the dreamwork, ya know.

All About the Progress Tracking

Want to run a faster mile? The first thing to do: actually time yourself at the start of your training. Trust me, I know this seems obvious. But, I’m sure we can all think back on a year (or years) where we never bothered to track our progress.

Let’s make this a priority this year. Grab a notebook, open up notes on your phone, and record. What’s your current debt balance? What’s your retirement contribution right now? How many times do you go to the gym each week? You get the point.

Listen! Don’t stop there. Weekly, monthly, quarterly, whatever it is record those same numbers. Nothing better than seeing your positive progress. Not so great progress can be just as powerful to motivate you.

Put It on The Calendar

We all know how time can magically slip away from us. Reoccurring self-evaluation and progress tracking is typically not something we put first on our list of to-dos.

Physically block out a time on your calendar (and add a notification) to sit down and check how you are doing with your resolutions. Take control of your time and your resolutions.

Patience is a Virtue

Think about it; typically, our resolutions are about reversing some bad habit we’ve had for years. If we’ve done (or not done) the same thing for months and months, we can’t expect to complete one-eighty with the snap of a finger. New habits take time. Patience needs to be our friend.

Consistency is key and it should be paired with patience. Start simple. Don’t try to change your life in one day. Accept good things take time and use that as your primary motivation to keep on keeping on. Patience can be a comforting companion.

2021 is a fresh page. I think we all appreciate the New Year just a little more this time around. Whether you have some major financial goals you want to tackle this year or you are just sick of falling into the same “resolution rut” each year, take these ideas with you: find support, track your progress, block out your calendar, and remember - patience is your friend.

I have the privilege to help people like you work toward their goals every day. It’s always New Year’s with me. Have questions about what financial strides to take? What investment accounts to utilize? Looking for opportunities to minimize your portfolio fees? I got you covered. I can be your support, help you track your progress, and remind you self-evaluation and patience are vital. Let’s start this New Year off right - together.

Here, at Fiduciary Financial Advisors, we take our fiduciary oath seriously. We hold these five principles:

1. I will always put your best interests first

2. I will avoid conflicts of interest

3. I will act with prudence; that is, with the skill, care, diligence, and good judgment of a professional

4. I will not mislead you, and I will provide conspicuous, full, and fair disclosure of all important facts.

5. I will fully disclose, and fairly manage, in your favor, any unavoidable conflicts