30 Aug How to Handle Sudden Wealth
The idea of a financial windfall doesn’t sound too bad, does it? The problem is, if you don’t have a plan in place to deal with an inheritance, the sale of your company, or even a winning lottery ticket, you could end up with less money than you had before the sudden influx of cash.
The Sudden Wealth Syndrome, a phrase coined by psychologist Stephen Goldbart, can affect absolutely anyone. If you think there’s a chance you could come into a large amount of money soon, it’s a good idea to start planning now so you can hang onto as much of that cash as possible.
So, what should you do, if you’re not going to run out and spend everything right away on a new car, boat, or Louboutin shoes?
Find Your Inner Peace
People will begin to look at you differently. Some may even come around with hands held out, expecting to receive their share of the money. Whether it’s family or charity organizations, many will ask for help. You’ll want to oblige, and that’s okay. Just, before you do, take a deep breath. Center yourself. And start to make a plan.
Contact a Financial Planning Expert
Before you spend a dime, you should interview financial planning experts to determine who works best with your specific needs and goals. You’ll want to parse out the cash to determine where you should invest, which bills should be paid first, and yes, who you can help with your sudden fortune.
Without this step, you’ll likely parse out everything and, before you even know, it be left with nothing for your future. That’s why it’s so important to breathe, center yourself, and then contact an expert. Consider your financial expert to be your Chief Financial Officer and consult them whenever you make a large purchase or donation. Ask yourself, does this action move me closer to my financial goals?
Take Your Time
You have the rest of your life to enjoy the money you’ve just received. You don’t need to spend it all in one place! Instead, take comfort in the fact that the money you’ve invested and saved will be there later, when you’ll need it the most.
That doesn’t mean you can’t start making purchases you’ve been eyeing for years. If you need a new home to give your family more room, then you’re finally ready to do so. Just make smart decisions that land you in a house that’s likely to increase in value rather than a flashy showplace that impresses all your friends.
The same is true for anything else you may want to buy. Consider them investments, and you will reap the rewards later.
Enjoy Your Freedom
It may seem like a big buzzkill to talk about planning when you have so much money at your disposal. Just remember: if you plan it right, you can enjoy financial freedom for the rest of your life. You may even be able to provide that same freedom for future generations.
We want to help you ensure this freedom. If you want a financial future that gives you joy, whether you’re expecting sudden wealth or not, give us a call.