• Posted February 7, 2023

How to Turn an Inheritance into a Long-Term Investment

An inheritance from a loved one can be a bittersweet gift. At the very least, you have a new endowment of finances that might intimidate you. What is the next step?

One of the safest things you can do is look to invest your new money. Our certified financial planners in Hartford, CT provide financial and estate planning services.

Put Money into a Taxable Account

Certain kinds of accounts are better structured for investment purposes. There are taxable investment accounts but still offer a compelling option for savings. Such accounts are, first and foremost, flexible.

You can use the funds for a wide variety of reasons. If you invest in the right things, you can significantly reduce the taxes you must pay on the account. Upon retirement, the funds in the account will be available. You will also be able to plan and file your taxes with more control in retirement. 

Rent Out Real Estate

There is no such thing as a completely safe investment—but real estate is one of the better options. Why? Well, the value of real estate tends to appreciate over the years, although recessions and the popping bubble of the housing market can temporarily reverse that. But even on those rare occasions, owning real estate is worth a lot.

Owning property creates a kind of financial collateral that is hard to beat. Buying an investment property and renting it out can be a good way to generate a positive cash flow for yourself and your family. As long as you uphold your end of the contract, and you manage to find dependable tenants, you will be fine. Inherited homes often need a lot of work if you hope to live in them or rent them out.

Stocks, Annuities, and More

Research and high-quality sources should be critical to your attempts at investment. There are lots of ‘professional’ individuals and organizations who prey on inexperienced first-time investors. Again, there is no such thing as a sure bet, but when buying stocks or other related activities, you should be reasonably sure that there is at least a decent chance of success. An annuity is an example of a relatively safe investment that is an alternative offered by insurance companies. Talk to others who have made similar investments with their inheritances when deciding your investments.  We provide investment planning services to assist with estate planning.

As tantalizing as investments can be, there comes a risk of losing your inheritance. If that won’t cripple you financially, it’s not the end of the world. But if that worries you, there is always the option of a trust or other such entity for protecting your assets. 

Did you enjoy reading this article? Here’s more to read. How to Make Sure an Investment Property is Financially Viable


Contact Tenpath Financial Group for certified financial planning services in Hartford, CT.