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Friday, December 27, 2013

How to turn your insurance settlement into a nest egg

By Valerie Cyrus Stout 

When you come into a large amount of money from an insurance settlement, there's always the temptation to start spending like crazy or blow the entire thing on something fun. However, with the correct investment, you can actually plan for your future and even make arrangements to have it supplement future earnings, meaning you'll have to work less or even save less for your retirement. The trick is investing correctly to ensure you get maximum return for your new nest egg.

Investing your settlement wisely

If you were injured in a car accident and suffered injuries that left you disabled for a period of time you may be entitled to compensation for those injuries. Performing a local Internet search like 'New York personal injury lawyer' will put you in touch with lawyers who are knowledgeable about the accident laws in your state. They may even be able to successfully represent you and win a large settlement to compensate for your loss.

While you will have expenses and bills to pay off from when you were waiting for your check, one of the smartest things you can do is invest your money to provide income and a future for both you and your family for years to come. Luckily there are some great options out there to ensure you get a great return on your initial investment.

1. Invest in tangible assets

In this time of financial uncertainty, putting your money into things you can actually "touch" like precious metal or property can give you a very real financial gain. Over the past several years, both metal and property prices and values have been on the upswing, making them an excellent option for the first-time investor. These assets in your portfolio can take a fall though, so it's important to keep an eye on them year by year.

2. Increase your 401(K) contribution

Though it may sound like an incredibly easy thing to do, upping your contribution to your 401K retirement program by as little as $100 a month can have huge advantages for your future. Find out if your employer will also match outside contributions, as this can be a huge benefit. This also reduces your pre-tax income, making your check to the government a little less painful.

3. Update your property

Even if you'll get to enjoy the benefits right away, keeping your property up-to-date can have positive repercussions down the line when you want to sell it. Fix any items that you've been putting off and ensure that your kitchen and bathrooms are modern and ready to use. Just a little cash here and there can result in thousands down the line.

4. Invest in... you!

If you've been in a job you hate for years and you've just come into a substantial amount of money, why not invest in your future by getting an education to do what you'd really like to do? Additionally, you can also look into starting your own business, or buy into an existing business you enjoy. By doing what you like, you'll often earn more money turning it into an investment in your future.

5. Get rid of your debt

It may not seem like this will help contribute to your future nest egg, but chances are you're blowing thousands of dollars on interest rates, late charges and other things associated with carrying a lot of debt. Get rid of these as quickly as possible and you can look forward to a debt-free life, including more spending money, in the future.

Setting up your nest egg means investing your money wisely, but it also means making smart choices with what you're doing at the present. By getting your debt down and ensuring your current assets are up-to-date and sell-able, you'll be preparing for your future while enjoying your present. If you're ever in doubt about your plan, a great investment is also in a visit to a financial planner, who can give you the latest ideas and advice to ensure you get maximum return for your money.

About the author: Valerie Stout Cyrus is a freelance writer who frequently researches insurance settlements and financial investments. She has found that hiring a local legal professional like a New York personal injury lawyer is the best way to ensure that you receive the compensation that you are entitled to. Investing this money wisely will make up for any future earnings that were lost due to your injury.

Image license: 401(K) 2012, CC BY-SA 2.0