A Wiser Retirement®

283. How to Manage a Sudden Money Windfall: IPOs, Business Sales, or Inheritance

• Wiser Wealth Management • Episode 283

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Receiving a large money windfall from an inheritance, business sale, IPO, or legal settlement can be life-changing, but it can also lead to costly mistakes if not handled wisely. Here’s how to take a thoughtful, strategic approach to ensure your newfound wealth supports long-term financial well-being.

Related Podcast Episodes:
- Ep 227: I’ve inherited $200k, what should I do?
- Ep 278: Avoid These Common Mistakes After Receiving a Large Inheritance

Related YouTube Videos:
- ​​Does inheritance count as income?
- Do you have to pay taxes on an inheritance?

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This podcast was produced by Wiser Wealth Management. Thanks for listening!

Pause Before Making Big Decisions

Speaker 1

So, number one pause before making big decisions. So obviously any type of emotional decision is not always the best decision. Some people say build a decision-free zone, so you make no decisions for like three to six months. So you just park everything into a high-yield savings account or wherever it is and you just leave it there and you just adjust and then you figure out how to work it into your current financial situation. Welcome to a Wiser Retirement Podcast. Are you curious about how to manage a sudden money windfall? I'm Casey Smith, joined with Senior Financial Advisor Shauna Theriault. Each week, we bring you practical advice on retirement, investing and planning for your financial future. Don't forget to subscribe to the podcast wherever you're listening. Let's get started. Hey, Shauna.

Speaker 3

Morning.

Speaker 1

So today's Tuesday, For those who don't come to Wiser headquarters very often, uh, Sean and I are kept very separate from each other. I don't know if they do that on purpose. We're both talkers. Maybe they're concerned about you, know getting work done getting work done. It's a hard boss, I'm in one side and you're on the other side of the office, but today's a Tuesday, so I get to see Shauna on.

Speaker 3

Absolutely.

Speaker 1

And we're in this kind of new podcast space. I think you and Michaela did the very first recording.

Speaker 3

We did. This is nice in here, so yeah, it's very soundproof.

Speaker 1

Now it's got all this fancy lighting and, honestly, when they close the door and we start recording, I feel like I want to take a nap. It's very relaxing.

Speaker 3

It is relaxing.

Speaker 1

Agreed. Yes, it's very, it's very relaxing. It is relaxing. Agreed, yes, I think me with my head down this desk taking a nap, uh, would end up somewhere on social media.

Speaker 3

Someone would record that that would be bad, but you're always go, go, go, go go.

Speaker 1

I can't picture you taking naps right over the mustache of my, my forehead or my lip or something you're always ready to go yes, I am go, go, you're always ready to go done anything fun lately um, just getting ready for the season end event and cheerleading for two of my three daughters.

Speaker 3

Oh yeah, cheerleading, let me guess the summit.

Speaker 1

It's a year-end event, sounds big, let me, it's probably in orlando it is all the cheer stuff's in orlando.

Speaker 3

It is absolutely oh you're gonna see mickey while you're there. Yes, you wear the mickey ears when you go to.

Speaker 1

No, that you're going to see Mickey while you're there. Yes, you wear the Mickey ears when you go to.

Speaker 3

No, that gives you a headache. It hurts. No, but we're definitely going to see Mickey while we're there.

Speaker 1

Do you have like a? Like a favorite t-shirt you wear when you go? I wear.

Speaker 3

Disney shirts, sure and cheer shirts. We have summit shirts that we wear there Sure, absolutely. So I look the part with my girls, yeah, yeah. That's good, I only have a couple more years of this, so you know, you know it's nice that there's an ending.

Speaker 1

With my daughter, we didn't do cheer, we did horses, and there seems to be no ending in sight.

Speaker 3

I think that's. The other sport that's more expensive than cheerleading is horseback riding, Because cheerleading is expensive but horseback riding is over the top you.

Speaker 1

Horseback riding Because cheerleading is expensive, but horseback riding is over the top. You can't top maintaining three horses there's no, no, no, it's great. They're beautiful animals.

Speaker 3

And it doesn't end when high school is over.

Speaker 1

No, Hopefully she makes the big stage. We'll see she's doing really well. It's just a lot of. It's hard on your body.

Speaker 3

She sees a chiropractor, I think, every week and a half.

Speaker 1

I guess I could see that it's all the jumping yeah, um, especially cross country, it's just really hard on your body.

Speaker 3

She's a small, small girl so does she have to like work out in between to just stay in shape, or does she stay in shape from she?

Speaker 1

stays in shape for the muscles that she uses. She probably could use more of a full body workout, and she. She did that for a little while, but now she says there's no time and she's 17 and I'm dumb as dirt.

Speaker 3

Well, I understand that I have two teenagers, so I understand we're all. And then I have a middle schooler, so she's almost a teenager. So I'm getting to the point where I'm as dumb as dirt, but I still have one that likes me a little bit right now.

Speaker 1

My son's home from college. So he's the golfer in the family. He plays at Mississippi State and he takes all online classes. So he's in school with like 20,000 kids but he doesn't know anybody. He only knows 12 people and they're all on the golf team.

Speaker 1

So anyway he's in for the US Open qualifier this week and he was just sitting on the back porch with me last night and I was doing some work and he's kind of sat down and he was looking up something, uh, and we just it was nice to have a nice little conversation you know, and it was.

Speaker 2

I wasn't dumb as dirt Maybe maybe he's coming out of that phase, she's going into the phase. So I don't know.

Speaker 1

I don't know, Kids are. You know, one of our at least I see it as a benefit is working with so many families over all different age spectrums, and you know the families that have kids that have already grown. They're some of the best encouragers, Because I'll tell stories like that when we, you know, have catch up and meetings and stuff and they always say hey they come back around. Eventually they come back around.

Speaker 2

I'm like holding out for that.

Speaker 1

Yeah, I'm holding them to it. They don't come back around. I'm calling you and figure what's going on. Um, but yeah, it, and I think my favorite ages were like from five to 12. Yeah, that that was kind of my favorite, but's over.

Speaker 3

It's over so fast it is fast, but it's the slowest fastest process you'll go through, because it's like the days are long and you know it feels long, but then all of a sudden you look back and you're like what just happened?

Speaker 1

so oh, I know, I remember when we were really young in the that diaper budget. I'm sure it's five times what I had to pay for diapers now. But oh, I don't know.

Speaker 3

People come in and they're about to have kids and it's like daycare and diapers and they're like it's so expensive. I'm like you, just wait until there's college cars, car insurance, cell phones, all the sports. I'm like it's actually really cheap. When they're babies, it's really inexpensive.

Assembling Your Financial Team

Speaker 1

Yeah, that's true. They don't have a whole lot that they have to sign up for it feels expensive, though, but I'm telling you it's worse, I promise. All right. Well, let's hop into today's topic. So you know, when you think about a sudden money windfall, that could come from several things. It could be you work at a company that goes public. It could be that you're selling your business. I wouldn't say that would be sudden. You probably have been working on that for a while.

Speaker 3

Hopefully you have plans.

Speaker 1

Yeah, usually a fire sale of a business is not a good thing. Inheritance could be sudden because maybe you don't know, Parents kept things close to the vest or whatever. So you know, we see this quite a bit and we thought that it would be interesting to go down kind of our steps, of what we tell people that are going through these things. So, first of all, windfalls can be life changing and I would think add one more uh, like a lawsuit settlement.

Speaker 3

I was just going to say that because, we've seen that a lot lately with accidents.

Speaker 1

Yes, on a smaller scale. I've had a couple of clients over the years at, uh, the very large scale settlements. Bad things happen. A lot of money was paid out. Uh, in a hundred percent of those cases that money's gone. They managed to spend that money. They've never seen that kind of money before. They got it and, um, the money's gone.

Speaker 3

Same with lottery winners, yes, well, yeah, there's whole shows about that. I actually knew somebody that won the lottery and that happened and it was, did it have?

Speaker 1

to file bankruptcy? No, but it was like all the money just kind of disappeared.

Speaker 3

Yes, I spent it down, even though we did a plan and, yes, unfortunately, you know it.

Speaker 1

It's um, uh. There's a whole show on TV about people and and I don't remember the exact percentage, I don't want to say something that's not accurate, but it was uh, uh. I want to say it was in the 80 something percent. It was very, very high number of people who win the big lottery, not even just a little lottery, but big lottery. Right End up filing bankruptcy.

Speaker 3

Yeah.

Speaker 1

It's yeah.

Speaker 3

There was a.

Speaker 1

There was a guy a long time ago that won the lottery, and and it was, he won a lot. It was a big number. No-transcript. We have we where we work for a family where, um, the wife inherited assets from the parents so she's been a great steward of those assets and growing them. Uh, the brother bought.

Speaker 3

uh, um, those assets and growing them, uh, the brother bought uh um started buying a net jet subscriptions and spent all the money.

Speaker 1

So for like a few years, a few years, three, three, four, five years uh, he took it down basically to zero.

Speaker 3

And I've seen. I've seen where families have done that and then, like the brother in that case. I don't know this happened, but would like reach out to the sister and be like I need help financially because they you know we're help financially Right.

Speaker 1

I need some more money Exactly.

Speaker 3

I know, and sometimes you see that in families where you know it was like that even when they were the parents were alive, where it was like helping to support the one child who could ever like you know get there financially, and then they get their inheritance and spend that.

Speaker 1

And you can design trust to help protect that as a parent If you think that's going to be the case where they can. So number one pause before making big decisions. So obviously any type of emotional decision is not always the best decision. Some people say build a decision-free zone so you make no decisions for like three to six months. Yeah, so you just park everything into a high yield savings account or wherever it is and you just leave it there and you just adjust and then you figure out how to work it in to your, your current financial situation.

Speaker 3

Well, and I would like to say with that, you know, just parking it, just be careful, because I wouldn't want to have a ton of money in just a bank account, you know, over the FDIC limit either. So I would look at maybe opening a brokerage account, maybe like at Charles Schwab is what we use where they have like SIPC insurance coverage and then they have Lloyd's of London and sit on top of that. So I wouldn't want to put, like you know, a million or some dollars in a bank account just sitting there if it's over the FDIC limit or you can spread it out for various banks. So just be wary of that, um. If you're just pausing which you should, if it's, you know, especially if it's like inheritance or some large thing you weren't expecting you know, emotional is usually tied to an inheritance a lot of times, um, and so it's just under. You know, don't make huge financial decisions then, um, but make sure that your money's protected wherever it's at.

Speaker 1

Um assembling your financial team. So you want a fiduciary financial advisor to be your quarterback. So this this person's going to probably bring a tax professional, estate planning attorney and insurance specialist with them, right, uh, if not, then you can assemble that team and tell them all to play nice. But you want a fiduciary advisor to be able to coordinate, to give you a long-term financial plan, help manage the tax implications. So CPAs their job is to save you taxes today, but they don't. They really don't think about long-term and that. And that's where that plan comes in. You don't see too many CPAs recommending conversions. You know already raw conversions.

Speaker 3

Well, cause they don't have the full financial picture.

Speaker 1

They're not running a whole cashflow, they're just looking at year by year.

Speaker 3

Right, and they can. They can look at what how can I save you money next tax year and they look at that. But they're not looking at your whole financial picture because they're not looking at all of your other accounts in your whole situation, which you know. If they were, then they could.

Speaker 1

Then the estate planning attorney is going to be there to help. Hey, if something happens to you, how do you pass this on to the next generation?

Speaker 2

Right.

Speaker 1

There's no better time to figure that out as you're, as you're inheriting the assets or as you receive the assets Right, it's very important from a business sale because you probably had a business succession plan in place, but once you sold the business, have you done the work after that, Because that succession plan doesn't apply anymore.

Speaker 3

It's your personal asset at that point.

Speaker 1

It's a personal asset now. So you need to be working with the estate planning attorney, but through connection with the financial advisor, because the financial advisor is going to have that long-term plan in place. And again, if you have the wrong financial advisor, who's really just an asset manager I was writing about this yesterday for an article they're only going to be focused on investments. That's not what a fiduciary advisor is going to be doing. A fiduciary advisor should be building a plan that looks beyond just the asset management and asset allocation.

Speaker 1

So if you have an financial advisor, he's only looking at asset allocation, that's that's a salesperson? Most likely not a, not a true fiduciary advisor.

Speaker 3

Right, and some of them will do a calculator of sorts where they're looking at oh, your assets should last your lifetime. Okay, well, that's great. It's helpful. You can do those online too, but it's really. You know what happens if something destroys my plan, like early death or disability, or you know, do I have enough insurance in place If I get sued? How do my assets flow If I pass away my estate plan? There's so many different pieces to a financial plan. The investments is an important piece, but it's only one tiny piece of the pie.

Speaker 1

Yeah.

Speaker 3

An important piece, but they're all important. They have to go coherently together.

Speaker 1

And that's where the interest part comes in Right, having having the right protection, not buying an annuity not not buying whole life insurance with your inheritance, your business sale, uh run from that person Again. That's why a fiduciary advisor would be able to protect you from people like that.

Speaker 4

Are you curious why annuities keep coming up as a potential investment option? People are often told that annuities can effectively mitigate investment risks and help secure their financial future. However, annuities often benefit the salesperson and might not be the best choice for you as a consumer. To learn more about the various types of annuities, the negatives of owning them and better investment alternatives, we have a free ebook on our website just for you To download our ebook. Buyer, beware, why Do they Keep Trying to Sell you that Annuity? Simply click the link in the episode notes or visit wiserinvestorcom slash guides. Now let's get back to the episode.

Speaker 1

So we kind of have this plan together. Now we need to understand the tax implications. So selling a business, hopefully that's not a last minute decision, as we said earlier. Hopefully this is something that's been in the works for a while and you've been working with this team for five years prior to get the sale optimized tax-wise. But you want to understand what capital gains are on the sale. Is it going to be an installment sale? Are there qualified small business stock exclusions, things of that, things of that nature. Those are all things that have to be planned out ahead of time.

Speaker 2

If you have an.

Speaker 1

IPO, you have to recognize the tax treatment treatments of restricted stock units as a tax treatment treatments of restricted restricted stock units, any potential alternative minimum tax issues. These are all tax related items that you need to have figure out. Don't just let it happen and then show up and go. Will this happen this year, when there could have been things that you could have done to plan for that?

Speaker 3

Right, absolutely A lot of times.

Speaker 1

This is where the donor advised funds come in, because if you have a large windfall in one year, that's a great opportunity to then take a portion of that and put it into a donor advised fund for charitable purposes. Yeah, that's probably the primary use of them. If I had to guess versus, you know, adding a little bit each year Inheritance, people who receive inheritance maybe you get a step up in basis on the stock, so that's a great opportunity in the house, right yeah, anything that's outside of retirement accounts, that's a great opportunity to then change the portfolio, because very often the money that you're inheriting is kind of managed like the old school way, Probably just got mutual funds, individual stocks right so

Speaker 1

that's a great opportunity to sell them with no tax consequences and then move into a portfolio that's made really for you and maybe a modern portfolio that's made up of more ETFs and index type funds. Let's talk about taxes. Typically, if you do your tax planning, you're going to know what you owe. Yeah, it's what you don't want to do is start in investing money and buying real estate and yet you have $600,000 in tax you got to pay. That money needs to be locked down somewhere safe, ready to pay the bill when it comes to you.

Speaker 3

That reminds me I had the situation years ago where a grown child, who was relatively young, inherited an IRA account and took a full distribution of said inherited IRA from the dad and of course we, you know, recommended not doing that she had. He passed away suddenly and you know she came in as the beneficiary and we explained the taxes. All of that did not recommend taking it. So she took a full distribution of this ira, even though we explained the tax implications, bought a house and then come april she had taxes due and didn't have any money to pay the taxes. Because you can't sell.

Speaker 1

Hopefully she got a heel off. Hopefully she got a heel off to pay off.

Speaker 3

It was it was like a really hard situation.

Speaker 4

Yeah.

Managing Family Money Dynamics

Speaker 3

So it's like sometimes you have to protect your heirs from themselves because they don't know any different.

Speaker 1

Yeah, that. Just. That gets back to legacy planning.

Speaker 1

Right, it's nothing that you can just do in one meeting. But it gets back to man teach your kids about, about money and how things work. Right, it's tough, it's hard. It's hard to teach a five, six, seven, eight, nine, 12 year old when they're actually listening, because they don't grasp the big world yet. And then when they start seeing the world, we'll go back to well, we started our conversation. Your tongue is dirt. So I feel like there's some mentorship that probably should happen in the twenties maybe. Yeah, I don't, I'm just guessing, I'm not there yet, but there's gotta be some mentorship somewhere. I mean, there's basics hey, don't make more than you or don't spend more than you make, and that that's basic stuff you can do when you're little. Teaching people to be charitable with their money, that's something you can do when you're little. But stuff like that, the tax stuff, right, Well.

Speaker 3

But even I see this all the time though, casey it's like you know, you have, you have your will in place and you're like, oh, I already have a trust set up in my will for my kids, but then you leave your 401k 100 percent to them, which doesn't go through the will. So I'm like this doesn't have a trust set up unless you have it going through somewhere that has a trust, right? So it may be unintentional and maybe, oh, I buttoned everything up with my estate plan but I didn't put the beneficiaries of the titling correctly on the assets, so it didn't really do what I was intending it to do, right, you know. And then sometimes, when we're we're, you know, in our fifties and sixties, it's like oh well, you know, I'm still healthy, I don't really need to worry about that now, especially in your forties. A lot of people don't do things with estate planning or money yet, and it's like yeah, but you have little kids, like that names.

Speaker 3

The guardian or your little child is going to inherit all this money because hopefully you have term life insurance, and then who manages that money? The courts are going to decide who manages it If your child inherits all this money.

Speaker 1

When you're younger, you have more money than you think. Right, it's the life insurance.

Speaker 3

Exactly so. It's like if you yeah, maybe you don't have a large estate yet per se, but then you have all this life insurance and you're leaving it to, you know, your child, who's a minor, and if you don't have that in place, who's going to take you know who's the guardian of that child? Who's going to manage that money and the term insurance policy? The courts are going to decide who's managing all that. What if they choose your brother, who is irresponsible with money? I don't know? Like you know, they could choose somebody who they think is appropriate. They don't know the inner workings of them and they blow the money. You know it. Could you decide where it goes? So it's so important so it doesn't really matter if you have millions of dollars, it's.

Speaker 1

It's really, you know, simply a way to set it up how you would like if something happens to you, sure, so yeah, I've always liked the idea of having a cover letter too. I think, if you put a letter on top of all your estate planning, yeah, that that might help me You're not going to like.

Speaker 3

You're not going to like lecture them.

Speaker 1

But maybe there's a little more thought on their part, because putting wishes, yeah, exactly.

Speaker 3

I don't know, but I'm also a big fan of starting. You know, I see a lot of parents that have savings accounts for their kids and when we talked about legacy planning and teaching them about money, there's a lot of parents that have, like savings accounts that are, you know, they're like putting it in a savings account, a bank Great, it's earning whatever, nothing. Open a custodial account and invest some of that. There's no minimum to do it. Like Charles Schwab, you can buy $50 into the S and P 500, you know, if mutual fund or something, not that we normally use mutual funds or ETFs, but you know it's, it's getting getting them to start learning about that and talking about the market and talking about investments and so maybe it gets their interest because they need to learn about money and when they're first working and, you know, doing 401ks at least you've already had that conversation their whole life about this investment account that you've talked to them about and been teaching them about it.

Speaker 1

Probably the big thing is for a lot of people, it's just keeping them out of debt.

Speaker 3

Right, yeah it's. That's a hard conversation too, yeah.

Speaker 1

Especially when they're adults, they can do their own thing they want it. Now, yeah, I was joking with the younger couple that, um, that came in and ended up being kind of free advice. They didn't really have resources to pay us and and we we weren't going to charge them, obviously, but for the 45 minutes I had with them, uh, I told him this Metro Atlanta is a really tough place to be financially responsible because you're surrounded by millions of people who are not financially responsible, and I was encouraging them to get their student loans paid off, get rid of $8,000 in credit card debt. But I said it's tough. You go out there and you look around and go. Man, everybody, how is this nice stuff?

Speaker 1

And I said, it's a bunch of broke people who have good incomes because they're older and they've advanced in their careers and they're not in their early twenties or in their mid thirties. So it's it can be hard to make the right decisions, but that's where you have to kind of teach your children and kind of nurture them and also maybe tell me about your mistakes and say, hey, I haven't been perfect. These are, this is what I got myself into, and if you could have 10 years free of this, you'd be way ahead of where you think I am right now.

Speaker 2

Right.

Speaker 1

So I think the next generation has a better chance at that. Maybe my generation a little bit, but like my parents' generation and then I think even beyond there, they're like super secretive about, about money. They don't talk. They don't talk very openly about it.

Speaker 3

No, they don't.

Speaker 1

All right. So let's talk about once you've kind of gotten over all these um this, this initial uh uh period, and now you have X amount of dollars. It gives back to really what our um financial planning, or we call it the order of operation, right, uh, you want to eliminate stupid debt. No credit cards, right, maybe you should eliminate cars if you can make sure the house is on track to get paid off by time you're 65. Uh, roll. Roll into uh next emergency reserve. Do I have enough reserves? Yeah, uh, and you need to determine that with with your advisor and how much you should have. Typically it's six to 12 months worth of expenses. If you're retired, you want to have about two years worth of expenses. Then you roll into. The next thing is am I okay for my retirement?

Speaker 1

If you'd already done your own planning and you know that your retirement is safe and the kids' college is checked off, then this could be what we call opportunity money. It's like, hey, I've got extra money, what do I do? Am I going to buy a second home and create kind of legacy experience there? Am I put in a rental program? Am I just going to put this money in a brokerage account and let it build over time and I'll find something in the future. Is there something that is there a? It doesn't always have to be investments, but there's one thing I've always wanted to do. Now I'm going to take the time to do it. I'm going to bring these people with me.

Speaker 1

Yeah, right so these are all things that, uh, that would come up in a, in a kind of a review of your own financial plan, or create your own financial plan. Um, you do have to be aware of a few things lifestyle creep.

Speaker 3

That's a real right.

Speaker 1

So now? So now you have more money and now, all of a sudden, every day you go to Starbucks, but you buy Starbucks for you and all your friends. And uh, you know you, you go to buy a car, but you buy the car. It's $30,000 more this time. Or all of a sudden, all your, your whole lifestyles, costs you more on a monthly basis.

Speaker 1

Right, Right so you have to be, you have to be very careful of that. Also, I have told I have said this a couple of times in 25 years I've been planning where people have sat in front of me and said what is my biggest risk if I retire right now. And looking at the whole situation, remember they pay me to be honest and pay us to be honest. I responded and I said your children and the husband and wife they go.

Speaker 1

what your children it's like. You just told me about your lifestyle and everything that you do and all this fits in just fine. You can retire tomorrow, but you also tell me that you had to give your child $20,000. You have this child, you paid $30,000 for rehab. You pay this. This child over here doesn't have a job and you're you're paying for the grandkids, whatever.

Speaker 2

Right.

Speaker 1

So taking care of your adult children and their children is what's going to bankrupt you in retirement. So you have to be very careful of uh family. Uh if gifting and giving money out.

Speaker 3

Yeah, Making sure it lasts for you, but it's also, it's that hard thing of you know what is the next generation going to do if you just bail them out all the time too? What?

Speaker 4

are they?

Speaker 3

going to teach their kids, and you know it's.

Speaker 1

I've never been put in that situation. Uh, I feel like I've lived through it with other clients.

Speaker 3

Yeah.

Speaker 1

Uh, and I would say that it is tough.

Speaker 3

Yeah.

Speaker 1

It's tough. What do you do? What do you do when you have it's $30,000 to send someone to a program and you know that they need this program? They don't have any means to pay for it. You can squeak by and try to figure it out, would you? You know? Wouldn't you pay it? I think?

Speaker 3

I would probably pay it.

Speaker 1

Yeah, yeah and something like that, because when your kid hurts, you hurt right, you know right um, but if you keep having to do it over and, over and over, again yeah, and they're draining you and you have to go back into the workforce. Yeah, I mean those are.

Speaker 3

That's really tough it is tough, that's tough uh.

Speaker 1

So I don't, definitely don't want to um, you know that's a totally different situation from having a special needs child that you need to provide for long term, just to living at home. I would never tell a person that that's the reason why you can't retire.

Speaker 2

That's insensitive.

Common Mistakes to Avoid

Speaker 1

But when you just keep handing out money to a perfectly normal person, you can go get a job, which is what the situation was that I was looking at. I've seen several of those too, yeah that's what you have to be careful, you gotta take care of of your immediate family, you and your spouse, at that point, and then, and then you can decide okay, I have extra, I know, a budget to be able to do these things.

Speaker 3

Well, cause I mean, if you don't, then you may end up being a burden on your kids in the future anyway, cause then you you don't have the money to sustain yourself, they don't have the money to help you. I mean, it just is a bad situation. Right, so you're really prolonging it for the family.

Speaker 1

Um charitable giving. So, uh, we talked about this earlier creating a donor advised fund. If you want to be um, uh, more giving of assets, uh, when you receive the large lump sum, you can allocate your giving amount over here. Uh, some people have really big hearts and and they start giving and next you know they've given too much, uh, and so by creating a budget for that and putting it into one fund that you can then disperse money out of, uh might be a more um, operationally sound way of yeah.

Speaker 3

And it's a quick way to say I get a tax deduction this year but I haven't really given it to the charity yet. I've put it in this fund that is for charity and then you decide where it goes. So that way it gives you time to make special considerations to, you know, different charities et cetera. So that way it's not you trying to get it all done by. You know, if you have this windfall and it comes in, then you know you do that one just contribution. If you will get the deduction now and then decide where it goes, to what charity, um, I think, common mistakes.

Speaker 1

To avoid in all of this is spending without a plan. That's like the lottery winner syndrome right yeah. Uh, underestimate taxes. You can, you know exactly, you can do a tax return ahead of time you're not even though you're not filing anything. You can do it. You can do a tax return. You should know exactly what you owe right uh failing to diversify investments.

Speaker 1

I see that one is a big one. You can put everything in one thing and it falls apart, and then, uh, ignoring your long-term goals for short-term gratification. Um would be the probably the last, uh most common stake we see is they want, they want to do this. Right now. It's the net jet syndrome. We're gonna fly net jets everywhere, but you really don't have that much money.

Speaker 1

You're spending down your principal at a very rapid rate right um, but in the end it's just having a plan and laying uh, laying it all out, and I think 99 of the people who walk into a wealth management firm are probably these people you know otherwise, why are you at a wealth manager firm if you're going to spend all your money?

Speaker 1

Uh, so so these are probably uh tidbits you can pass on to someone else. It's kind of like that freakingomics uh book. I love that book. Uh, it talks about um, sometimes I think people even list probably listen to this podcast, know this, but does reading a parenting book make you a better parent? And did he just study? And actually no, it doesn't.

Speaker 3

It's just wanting to read.

Speaker 1

It's the wanting to read a parenting book makes you a better parent.

Speaker 3

Right, because you're obviously open to it and you're not just closed-minded, correct.

Speaker 1

So it's probably the same way the podcast is. Listening to a wealth management podcast make you a better investor? I hope so, but maybe just wanting to listen to one.

Speaker 3

Right. Wanting to learn more. Wanting to learn more, understand more Right.

Speaker 1

Makes you a better.

Speaker 3

So maybe that makes you pause, because you were like oh, maybe I should learn more about that, right.

Speaker 1

Right, exactly, yeah, all right. So let's talk about a few more episodes. You might want to listen to Episode 278, avoid these common mistakes after receiving a large inheritance. Episode 227, I've inherited $200,000. What should I do? And then we have a YouTube channel called A Wiser Retirement where you can watch videos like how do you or do you have to pay taxes on inheritance and does income count, or does inheritance count as income?

Speaker 1

Those are all built into our A Wiser Retirement podcast or YouTube channel, where we have a lot of. We have 90,000 views over the last 90 days.

Speaker 2

Or actually I mean 30 days.

Speaker 1

I have to go back a little bit. I'll get back to you guys, but no, I just know that there's 90,000 views in a very short time period on the YouTube channel, so it's been pretty popular, all right. Thanks, shauna. Thank you, I'll see you again for the next podcast.

Speaker 2

Okay, Thanks for listening to a Wiser Retirement Podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review.

Speaker 2

If you have any questions about anything that was discussed today, head to wiserinvestorcom and reach out. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets or any other investment vehicles or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guests may personally own securities, digital assets or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation and no referral fees are paid to or received by any host or guest for clients, listeners or similar interests. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional and or legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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Casey Smith

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