The Church Just Gave Me $175,000
Hi Scott,
I have just won an insurance payout after seven years of fighting a rape case with the church. The payout will total $175,000 after my lawyers are paid. I am 27 and I work at a local library earning $48,000 a year. I want to use the insurance money to build a future, but I am so exhausted and overwhelmed from the case right now that I do not know what is best to do with it. Any suggestions?
Rebecca
Hi Rebecca,
I am so sorry for what you have gone through.
It is perfectly natural to feel overwhelmed right now. You’ve spent years fighting for justice and you’ve just received a huge, life-changing amount of money.
Oftentimes when people get a windfall, a lot of well-meaning people give them contradictory ideas on what they should do with it … all of which just causes more doubt, more indecision and more stress.
So I’m going to give you the same advice I give anyone who gets a major windfall: pay off any debts, stock up a three-month Mojo savings account, splurge on a well-deserved holiday, and -- most important of all -- lock the rest of the money up in a 12-month term deposit. You need to dial down the pressure and focus your energy on healing.
In the meantime, we’re going to use the money in the term deposit to build up your self-confidence. When it comes to finance, you don’t have to understand a thousand things -- you just need to know a few broad principles:
First, no one cares more about your money than you do.Second, keep things simple.
Third, focus on safety. Keep your three months of Mojo at the ready, then buy a home you can afford. Also, put your long-term retirement savings on autopilot by boosting your pre-tax super contributions from 9.5 per cent (what your employer pays) to 15 per cent (by adding some yourself). Then focus on paying your home off. That’ll keep you safe.
(Note to the reader: The details of this case have been changed for privacy reasons. I have spoken to Rebecca and have agreed to help her over the next 12 months and beyond.)
Scott
