People often desperately lament their desire for wealth – they spend hours hoping for miracles or dreaming about winning lotteries. The sudden occasion of receiving an inheritance, though not miraculous, is quite bittersweet. Losing a cherished relative could greatly devastate you and your family. In this state of vulnerability, you’re prone to making rash decisions.
While your wistful needs are endless, the reserve of these resources is limited! It’s crucial that you wisely plan your next financial moves or risk letting your inherited wealth run dry. As a receiver of a substantial inheritance, you aren’t liable to pay any tax in India. In 1985, the then Finance Minister, V.P. Singh, abolished the Inheritance or Estate Tax.
Also Read: 6 Smart Ways to Manage a Windfall (Lump Sum)
Even with your tax saved, other risks could singlehandedly deplete your wealth. By combing careful decision-making and avoiding money traps, you could prolong this wealth for years to come. Here are decisions one should dodge while handling wealth.
A sudden influx of money could easily tempt even the most prudent spender, but exercise restraint and thoroughly plan your finance before making big purchases
While quitting your job or retiring early are enticing ideas, they will quickly run your funds dry
This will drain your wealth sooner since there is no guarantee on how long you will be able to sustain such a lifestyle
Storing your money in the bank involves little risk and reward – invest it for the long term, and let it grow and compound!
Always be wary and dodge these traps that try to catch hold of your wealth. Prevent prematurely running out of funds by carefully planning your finances. Wait! The duties of the inheritance receiver stop end here.
After acquainting yourself with all the donts, it’s time to focus on the dos! An uninformed decision could be the difference between a lifetime of joy or troubles. There is no guarantee on how long it may last, but the following investment avenues will ensure prolonged sustenance.
Widely recognised as one of the best investment instruments for high returns, albeit with high risks. Mutual Funds collect money from numerous investors and invest these funds in securities like bonds, short-term debts and stocks. Depending on your risk appetite, choose to invest in low to high-risk Mutual Funds.
As you grow older, your whimsical expenses may reduce, but the cost of medical treatments will likely soar. Plan for your senior years by investing in a PPF. It acts as a savings-cum-tax-saving instrument. Take advantage of the power of compounding by investing your money for a minimum of 15 years (lock-in period).
If taking risks seems like too much of a gamble, opt for the low-risk benefits of Fixed Deposits. As a traditional investment instrument, it allows you to invest your money for long periods based on a predetermined rate of interest.
In most cases, properties always appreciate value over time. If you haven’t already inherited one, you could safely invest your wealth in purchasing one. Additionally, you can earn an extra source of income by putting up your property on rent or hosting a Bread-and-Breakfast.
Today, digitisation has taken over various areas of our life – then why not consider investing in gold the modern way? You can virtually buy and sell digital gold without involving any physical transactions. Furthermore, you can easily purchase digital gold worth INR 1 for real-time prices!
Lastly, remember to give yourself adequate time to mourn through your grief. Think through your decisions and avoid falling into money traps while managing your finances.