Consumer Watch: How to manage large sums of money

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by Andy Treinen

WHAS11.com

Posted on November 29, 2012 at 6:12 PM

Updated Thursday, Nov 29 at 6:21 PM

(WHAS11) -- The massive Powerball jackpot is the kind of money most people only dream about. But managing any large sum of cash takes some harsh reality.

The odds of having to manage hundreds of millions of dollars of winnings, are relatively nonexistent.  But the odds of managing a sudden influx of cash at some point, are much greater.  Think of a smaller, yet significant lottery win, an inheritance, or a settlement.

Janet Bodnar of Kiplinger's personal finance says the best  approach to a windfall, is a practical one.

"You want to ask yourself the same questions you would ask yourself if you had never gotten this windfall. Do you want to beef up your retirement savings? Do you want to pay off debt? Do you want to save for college for your children? What is it that you want to do? And now perhaps you have the money to do that,” Bodnar said.

Avoid making hasty decisions when emotions are still high. Putting that money in a savings account can give you time to find the right person to help you manage it.

"If you have somebody who's trying to sell you a product right away, or to get you into an investment that you don't know anything about, you want to avoid those people like the plague. You want people who are going to ask you questions, what are your goals? What do you want to do with this money?” said Bodnar.
 
And get guidance from a tax specialist on what you might owe the IRS, even if the windfall seems small, Uncle Sam will always get his cut. If you have a consumer issue you’d like us to look into send an e-mail to consumerwatch@whas11.com.
 

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