Understand the Risks of Lifestyle Creep
Lifestyle creep occurs when an individual's standard of living improves as their discretionary income rises and former luxuries become perceived necessities. After receiving an inheritance, the temptation to upgrade your lifestyle can be strong, but it's important to recognize the risks associated with this behavior.
Failing to control lifestyle creep can lead to increased spending, which may deplete your inheritance faster than anticipated. Awareness of this risk is the first step toward maintaining your financial health.
Create a Financial Plan with Professional Guidance
Consulting with a financial advisor is essential to crafting a comprehensive financial plan. A professional can help you understand your financial situation, set realistic goals, and develop a strategy to achieve them.
An effective financial plan includes budgeting, tax planning, and estate planning. By working with a financial advisor, you can ensure that your inheritance is managed in a way that aligns with your long-term objectives.
Focus on Long-Term Financial Goals
It's crucial to set and prioritize long-term financial goals. These may include retirement savings, funding education for children or grandchildren, or establishing a charitable foundation.
By focusing on these goals, you can allocate your resources more effectively and avoid impulsive spending. Staying committed to your long-term objectives helps preserve and grow your wealth over time.
Invest Wisely to Grow Your Wealth
Investing is a key component of wealth preservation. Diversifying your investment portfolio can help mitigate risks and enhance returns. Consider a mix of asset classes such as stocks, bonds, real estate, and alternative investments.
Work with your financial advisor to develop an investment strategy that fits your risk tolerance and time horizon. Regularly review and adjust your portfolio to stay aligned with your financial goals.
Maintain a Balanced Lifestyle
While it's important to enjoy the benefits of your inheritance, maintaining a balanced lifestyle is crucial to preserving your wealth. Avoid the pitfalls of excessive spending by setting a budget and sticking to it.
Living below your means allows you to save and invest more of your inheritance, ensuring financial security for the future. Remember, wealth is not just about how much you have, but how well you manage it.
Kovitz Investment Group Partners, LLC (Kovitz) dba NorthCoast Asset Management is an investment adviser register with the Securities and Exchange Commission under the Investment Advisers Act of 1940 that provides investment management services to individual and institutional clients. Effective June 1, 2024, NorthCoast Asset Management underwent an organizational change and all persons responsible for portfolio management became employees of Kovitz Investment Group Partners, LLC. Prior to June 1, 2024, NorthCoast Asset management was previously overseen by Focus partner Connectus Wealth since November 1, 2021. From 2008 until November 2021, the Firm was defined as NorthCoast Investment Management, LLC. The accounts managed at the predecessor firms are sufficiently similar to the accounts managed at NorthCoast Asset Management, such that the performance results would provide relevant information to clients or investors.
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NorthCoast and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
The information contained herein has been prepared by NorthCoast Asset Management ("NorthCoast") on the basis of publicly available information, internally developed data and other third party sources believed to be reliable. NorthCoast has not sought to independently verify information obtained from public and third party sources and makes no representations or warranties as to accuracy, completeness or reliability of such information. All opinions and views constitute judgments as of the date of writing without regard to the date on which the reader may receive or access the information, and are subject to change at any time without notice and with no obligation to update. This material is for informational and illustrative purposes only and is intended solely for the information of those to whom it is distributed by NorthCoast. No part of this material may be reproduced or retransmitted in any manner without the prior written permission of NorthCoast. NorthCoast does not represent, warrant or guarantee that this information is suitable for any investment purpose and it should not be used as a basis for investment decisions. © 2024 NorthCoast Asset Management.
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This material should not be viewed as a current or past recommendation or a solicitation of an offer to buy or sell any securities or investment products or to adopt any investment strategy. The reader should not assume that any investments in companies, securities, sectors, strategies and/or markets identified or described herein were or will be profitable and no representation is made that any investor will or is likely to achieve results comparable to those shown or will make any profit or will be able to avoid incurring substantial losses. Performance differences for certain investors may occur due to various factors, including timing of investment. Investment return will fluctuate and may be volatile, especially over short time horizons.
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