The Plan by Investors Group^TM

What to do with cash surprises

So you've come into a sudden windfall—perhaps you had the winning lottery ticket or received a large income tax refund. While it's tempting to spend it, there are a number of more profitable strategies.

Before you make any spending or investing decisions, consider your financial priorities. Are you saving towards (or dreaming about) any specific goals? When do you hope to achieve those goals? Here are a few tips for making the best use of your windfall—both long-term and short-term.

Attack your debt

We recommend paying down any high-interest debt first—such a credit cards, loans and lines of credit.

If you want to take a chunk out of your mortgage, look into the prepayment options offered by your lender. Most lenders will allow you to prepay, without penalty, a certain percentage of the outstanding principal once a year. For example, at Investors Group, clients can pay up to 15% of the original principal balance in a lump-sum payment once each year without penalty.

Invest it

Once your short-term needs are taken care of with your newfound cash, we can discuss your long-term plan. We’ll help you use your windfall to build or start a portfolio of investments. We’ll formulate an effective asset allocation strategy so that you can increase your potential to maximize returns while maintaining a comfortable level of risk. This means you can take advantage of a wider range of investments, while limiting the potential negative impact of putting all your eggs in one basket.

Receiving a cash surprise is exciting, but professional advice is especially beneficial at this point. Your Investors Group Consultant can create a plan for an investment strategy to meet your immediate income needs while allowing you to build towards your long-term objectives.

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Written and published by Investors Group as a general source of information only. It is not intended as a solicitation to buy or sell specific investments, nor is it intended to provide tax, legal or investment advice. Readers should seek advice on their specific circumstances from an Investors Group Consultant.