Chapter 22Investing Lump Sums

In This Chapter
  • Understanding the challenges of investing lump sums
  • Striking a balance with your income tax
  • Putting severance pay to work for you
  • Stock options, settlements, and inheritances
  • Using dollar-cost averaging to reduce risk and increase your wealth
  • Knowing enough to ask for advice
  • What to do with retirement lump sums?

Saving and investing money normally is done in a systematic manner, a little bit at a time. You contribute some of every paycheck to your 401(k). A bit more goes into your daughter’s college fund. Still another piece goes toward your emergency fund. Little by little, you build up the accounts.

There’s a good chance, however, that at one point of your life or another, you’ll receive a significant amount ...

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