A Good Plan Gives You Peace of Mind

Surprisingly, there are a lot of different ways to come into a six-figure sum. A payout from a settlement, inheritance, an insurance check, a lottery ticket and more are all ways that you may find yourself with six figures more than you had before. Although six figures may not sound like an extraordinary sum of money, it is the median net worth of a 45–54-year-old person in the United States. Growing your net worth by a liquid six-figure sum is nothing to sneeze at and its use should be planned carefully. Here are three questions to ask a wealth management advisor when you are first issued your six-figure check. 

Ask how to invest for passive income

One of the best choices that you can make for your financial future is to find some method of passive income. Passive income allows your money to work for you by bringing in smaller sums over time. If there is a way that you can bring in more money monthly via investing some of your windfall, you should talk over the possibility of the method with your financial advisor. Some investments are inherently riskier than others, so you want to make sure you choose an income method that you are comfortable with. 

Determine what liabilities should be paid off, if any

Although paying off bills may seem like the responsible first step when you come into money, this may not be the case. If you have a manageable mortgage, paying off your home may not be the best investment, as it could decrease your tax write-offs. Monthly bills with small monthly payment amounts or with low-interest rates could possibly hold off on being paid so that you can hang on to the majority of your funds. Your wealth management advisor can explain what should be paid off and what you should leave on monthly payments to maximize your money. 

Bluntly state how much you can afford to spend

The fun part about a financial windfall is being able to spend some of the money. You may also have expenses that resulted in the check making its way to you, such as in the case of an insurance payout. Go over the full purview of your financial situation with your wealth management advisor, including any pressing needs or desires that you have. Ask the advisor to come up with a figure that you can afford to spend while still keeping the rest of the money in a growth account.