Did you just receive a lump sum? There are a few smart ways to manage this money. Here is what you need to do before and after receiving a huge chunk of cash.
Find a financial advisor
Unless you have experience with investing, it makes sense to speak with a financial advisor to help you decide what to do with your cash. Find a fee-only adviser with a Certified Financial Planner (CFP) designation. Others, like bankers, stockbrokers, and insurance companies work for commission and may not be working entirely in your best interest.
Where should you put your money?
This is a big question that you should not rush. Take your time to research savings vehicles or security types before investing. You want to find one that will work best for your needs. Also, it can be that you have more than one use for your cash windfall. You can use a portion to pay off your debt, invest in retirement, go on a vacation, or even give some away. It all depends on your priorities.
For short-term cash needs, you can invest in a money market fund. This is a liquid interest-earning savings vehicle, which means you can generally deposit and withdraw from them at any time without fees or penalty. You can buy money market funds at mutual fund firms, banks, and brokerage firms.
What are your priorities?
Beyond the money market fund, you should figure out your vision or a structure for your money to move forward.
You cash is only good as liquid savings for so long. Moving it to another investment will make your money work harder for you. Some questions to answer include what do you ultimately want to be able to do with it? How soon do you need it? How much do you want to grow? How much risk are you comfortable with?
Ultimately, the next step will depend on your investment objectives, risk tolerance, and what you want the money to do for you in the short run and in the long term. This is where the services of a financial advisor helps, because they can help you decide what to do with your money.