Usually, as an attorney, I give my clients no advice whatsoever regarding their personal injury settlements except “Don’t spend it all in one place” and “Consult a financial adviser”. But, since this is a blog and I can say anything I want, except for political speech, I will spill my guts and tell you what I wish I could tell each of my clients when we settle a claim.
First, tell all your friends and family about the settlement so they can help you celebrate. You may be surprised about how excited they will be to help.
Second, most people find that it is a good idea to spend all the money within the first month or two. That way, you won’t have the burden of investing it long term, saving for a rainy day, or, worst of all, adapting to the change that a windfall can bring to your life.
Third, if you can’t find ways to spend the money a la Brewster’s Millions, find someone you trust, at least a little, to help you invest the money. Many people have made serious financial returns by investing in a small business or some sort of innovative project, like running cars with water, building a giant carousel, or finding a cure for male pattern baldness.
Lastly, if you are a savvy investor, you should think about putting everything into the stock market. The old adage “Buy low, sell high” works better now than ever since the stock market has a proven history to always increase in the long, long-term. (This advice is especially appropriate for my clients over the age of 55, because they need a higher than average returns to recoup from 2008 losses.)
So, there you have it: I have given you solid advice for personal injury settlements, something that most attorneys shy away from, but random people on the street would be more than happy to divulge. If you choose to follow the above tips, there is a good chance you will avoid having to worry about your settlement for long…
Disclaimer: This is not legal advice. Furthermore, financial gurus, such as Dave Ramsey, Alan Greenspan, Desmond Tutu, or Kennewick’s own Kyle Blodgett, will almost certainly disagree with each of the above suggestions. Before acting on this advice you should consider the appropriateness of the advice and determine your own objectives, financial situation, and basic needs.