Armchair Millionaire Community Bulletin: Managing Inheritances a Difficult Challenge for Some

Successful inheritance management requires planning, education and key deliberate moves.

(PRWEB) February 22, 2004 --A study last year by the American Association of Retired Persons found that relatively few people have actually received inheritances. Just 17.3 percent of Baby Boomers have received one, and even fewer expect to receive one in the future. But like you, of those who had received an inheritance, the amount of money involved was not life changing, averaging just under $48,000.

To give you the perspective of some people who've been there before, we recently asked members of the Armchair Millionaire community who'd received inheritances about their experiences. Here are two of the comments we heard:

"It was important to me to respect my grandfather, who left me this money, and not spend it foolishly. I think ... investing wisely for the future would have pleased him. I would advise strongly against becoming a spend thrift. It is easy to use the money for frivolous purposes ... Invest the money (whether it be real estate or the stock market) in a manner that will make touching it (and spending it) difficult." --Francis

"I got an inheritance and spent too much of it before I woke up. I should have seen a fee-only financial advisor, but thought I knew it all." -is24

You should definitely be commended for taking your inheritance so seriously. To help you move in the right direction, my guide provides the key steps you should take in the coming months.

The Armchair Millionaire's to Managing an Inheritance

Take your time. This is not a time to make decisions in a hurry. There's nothing wrong with parking your money in a CD or money market account for a few months while you decide exactly what to do next.

Consider taxes. Your inheritance could carry tax implications, and you should understand what federal or state taxes might apply to the money you receive-before you decide what else to do with that money. This can be a complicated area, so be sure to seek the advice of a tax professional if you have any questions.

Stick with your priorities. Already planning to pay off your credit card debt and save more for retirement? Then use your inheritance to bring you closer to those goals. Doing so will keep you on track for the important things in life, and steer you away from impulse spending.

Re-evaluate your strategy. A windfall can change your risk tolerance and investing time horizon, and you may need to redefine your investing strategy to account for these changes. It can also change your tax situation, which may also call for a shift in your strategy. If you have any doubt about the best way to proceed, see a qualified financial planner.

THE BOTTOM LINE: Fantasizing about inheritances that transform your life is one thing. Dealing with a more realistic inheritance amount--and the complications and emotions that go with it--is like many other financial matters. Use common sense and focus on the fundamentals of saving and investing for the long term.

Armchair Millionaire Web site was founded in 1997. The company's first book, The Armchair Millionaire, was published in 2001. Today, www.ArmchairMillionaire.com is a fast-growing community of common sense savers and investors.

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