Your Mesothelioma Settlement and Safe Investing
This is a guest post by Patrick Collins of Schultz Collins Lawson Chambers, Inc., the firm we hired to advise us on how to handle Kazan Law’s pension funds, our charitable foundation’s funds, and that some of our partners hired to advise them on personal money management.
You cannot take fifteen pounds out of a ten pound sack. If a “safe” investment like a CD is unlikely to provide the funds for your critical lifestyle objectives, then that investment is not safe.
OK—you have made a budget for your mesothelioma settlement and you figure out that you need $x per month to pay for your target standard of living. Let’s say that you are age 60 and you want a $1 million nest egg to fund family-related expenses of $5,000 per month for 30 years. You realize two things: (1) that the cost of goods and services tend to go up in the future so you will have to adjust the $5,000 per month upwards to keep pace with inflation; and, (2) that investing means putting some or all of your money at risk. Ideally, you would like to preserve your target lifestyle by putting your nest-egg in safe one-year CDs at the bank.
You now have arrived at step two in the process of deciding how much risk, if any, you need to take with your mesothelioma settlement. So the big question is: how much money can you spend without taking any investment risk? In this example, if you can generate a 30-year income stream with a CD that does not put your mesothelioma settlement nest-egg at risk, you don’t need to own any risky investments. You may want to own some growth-oriented investments; but you don’t need to own them.
Here is the central point: You cannot take fifteen pounds out of a ten pound sack. If a “safe” investment like a CD is unlikely to provide the funds for your critical lifestyle objectives, then that investment is not safe. It is unsuitable for you. This may be surprising because most consumer protection laws protect people from speculative or fraudulent investment schemes. However, in some situations, it is just as damaging to avoid risk as it is to take too much risk.
The posts provided by Schultz Collins Lawson Chambers, Inc. [SCLC] convey information on basic investment concepts. They are intended to facilitate prudent investment decision making. They should not, however, be the sole factor in making investment decisions; and, they are not intended to act as advice or recommendations for any specific investor. SCLC acts as Independent Investment Counsel and is a Registered Investment Advisor. It does not provide legal, accounting or tax advice; and the opinions expressed in the posts are solely those of SCLC. You can find additional information about SCLC, their personnel, and client services at www.schultzcollins.com.