This ad will close in

The More You Know...

...the better you'll be prepared for windfalls.

Does wisdom come with age? That depends. Baby boomers often don't know what to do with windfalls of $50,000 or more, according to a recent survey of 33-to-51-year-olds. The reason? Boomers tend to lack an understanding of finances.

One common mistake boomers make is to act on a windfall too quickly and ignore their tax responsibilities in these situations. "Windfalls usually come with lots of emotion--divorce, layoff, retirement or the loss of a loved one," says Jane Ann Whitchurch of OppenheimerFunds Inc., the mutual fund company that conducted the survey. "Many people [try] to make themselves feel better by spending money on luxury items."

It's best to wait until you have your emotions under control and then consult a financial advisor. "In fact, talk to a financial advisor even before getting a windfall," says Whitchurch. And while the survey threshold was $50,000, Whitchurch says you should create an investment plan or consult an advisor even if you receive a lump sum as low as $2,000. Bottom line: Look before you leap--or what seems like an enormous cash resource could quickly dwindle away to nothing.

Next Step

OppenheimerFunds Inc. publishes four brochures on handling windfalls; these brochures cover divorce settlements, severance packages, retirement payouts and inheritances. To order free copies, call (900) 525-7048.

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the June 1998 print edition of Entrepreneur with the headline: The More You Know....

Loading the player ...

2 Mobile Apps That Help Make a Busy Entrepreneur's Life Super Easy

Ads by Google

0 Comments. Post Yours.

Most Shared Stories

1
5 Key Characteristics Every Entrepreneur Should Have
2
The 3 Attributes to Look for in Top Talent
3
The 7 Books Every Entrepreneur Needs to Read When They're Discouraged
4
Steve Jobs' 13 Most Inspiring Quotes
5
5 Keys to Inspiring Leadership, No Matter Your Style

Trending Now