Investing your inheritance can be an intimidating and overwhelming process. However, if you take time to conduct research and learn about various investment opportunities, you can benefit for many years to come.
Inheritance investments can help you reach your financial goals, so take time to develop an investment strategy. Start by composing a list of your wants and needs. Determine how much money you're going to need now and in the future. This information will help you chose investments best suited for your needs.
Next, determine how much of your inheritance you are willing to invest and what you want to invest in. Low-risk investments include certificates of deposit (CDs), money market accounts and annuities. Investments that carry a higher-risk, but offer the potential to pay a higher return include real estate, stocks, bonds and mutual funds.
Certificates of deposit are a good choice for low-risk, short-term investing. CDs are similar to savings accounts and earn a fixed rate of interest for a specified period of time. Inheritance money can be invested in a CD account for a few months to several years. CD investments are usually subject to early withdraw penalties, so choose a timeframe suitable to your needs.
Money market accounts pay a higher rate of return than regular savings accounts. Inheritance funds can be withdrawn and checks can be written from money market accounts. Typically, a minimum balance is required and fees are imposed if the balance falls below that minimum.
Annuities are financial contracts sold by insurance companies. Annuity investments can be made in lump sum payments or installments. Insurance companies invest the money, which earns interest. At a designated time, the insurance company repays the money, plus the interest it earns, back to you in a lump sum or installment payments.
Stocks can yield higher returns on your inheritance investment, but they also carry a higher risk.
There are two types of stocks - common and preferred. Common stock refers to shares held by the public. Preferred stock has fewer rights than common stock, but generally pays consistent dividends.
Bonds are loans to corporations or governments. There are different types of bonds including government, corporate, municipal or junk. They are purchased at a fixed rate of interest for a specific amount of time. At maturity, the insurer repays the amount of the bond.
Mutual funds offer benefits similar to those of stocks and bonds, but with less risk. Mutual funds are administered by professional money managers. A group of investors pool their funds together to purchase multiple stocks or bonds.
There is no guarantee of dividends and investments in mutual funds can lose value. Additionally, investors in mutual funds accounts are required to pay annual fees, management fees and sales commission.
For the short term, invest any cash you receive through inheritance into an interest bearing account. Short-term certificates of deposit or money market funds are two options offered by most banks. If your inheritance includes stocks and bonds, leave them alone until you have time to evaluate your options.
If your inheritance is tied up in probate, Simon Volkov might be able to help you obtain a lump sum cash payment. We understand the financial burden of having your estate frozen for a long period of time. If you're in need of cash for your inheritance, we'd like to talk with you.
We offer free consultations to review your inheritance and discuss the options available to you. Simon Volkov has helped hundreds of individuals eliminate their financial burdens while waiting for probate to authorize inheritances.
Contact us today via our secure Inheritance Form. Upon receipt of your information one of our consultants will contact you. We look forward to hearing from you.
Published on January 05, 2010 at 01:37 AM
| | Printer friendly