What to do with the sudden influx of funds?

It is not uncommon for unexpected and unusual inflows of money to occur during a person’s lifetime, whether in the form of prize money, gambling wins, donations, inheritances, or compensation following a trial…

What you do with the money you collect will depend on the amount, your age, and your financial and family circumstances. There is no ready-made answer; it is usually a combination of several options.

This windfall is first and foremost an opportunity to assess your financial situation and weigh the pros and cons. At the same time, don’t let this money “sleep” in your current account, but put it (at least part of it) into a tax-free savings account.

Livret A has a limit of €22,950 but can be supplemented by a Sustainability and Solidarity Manual with the same operation and a limit of €12,000.

Reduce your debt

Check your debt situation and those loans that are costing you a lot. For example, it will be particularly interesting to pay off revolving credit or finally settle consumer loans.

If you have a mortgage, carefully weigh the pros and cons between the fees you still have to pay and the possible penalties for early repayment. Therefore, the favorable interest rates on this type of credit can largely be met with high-yield investments.

Do not hesitate to pay your overdraft, which will come with Agios, and plan to preserve working capital for your cash flow so that you do not end up in the red again.

save

It would be a shame if this income doesn’t help secure your financial future.

Whether it’s increasing precautionary savings (Livret A, LDDS) to prepare for a hard blow, buying life insurance or investing for the long term (e.g. a retirement savings plan).

In this case, there are no fewer solutions in the field of safe investments. Depending on the amount received, try to spend at least 40%.

Financing the project

This is a great opportunity to finance a project: a home renovation, a new car, or even a long-planned trip; or to start a project such as buying your primary residence by opening a home savings plan.

You can treat yourself to a piece of jewelry or even a piece of art to make the money “visible” and lasting. It may also be an opportunity to share with those around you and prepare your legacy by making a donation to your children or purchasing life insurance to protect your spouse.

invest

Finally, you can invest part of the amount you receive, taking some risk, given that the money could be lost.

There are many solutions available to you: investing in the stock market through PEA or account units of life insurance contracts; investing in real estate through SCPI or crowdfunding; investing in the real economy through SME shares…

Get advice

However, any form of investment must be carefully considered and chosen with professional advice.

Therefore, your first instinct is to make an appointment with your bank, who will explain in detail the tax benefits of this investment, as well as the different investments you can make.

For his part, your notary will be able to walk you through the different ways to prepare your transfer.