New riches can come from selling a business, inheritance, divorce, insurance settlements, and winning the lottery. And the emotional impact can vary from elation to guilt to confusion and anxiety about the immense responsibility of managing newfound wealth.
For instance, a business owner might suffer an identity crisis after selling his business. After years of building a successful business, a sense of self-worth and personal fulfillment might diminish.
Many times, once the money is received, people with sudden wealth feel they should do something about it. Don’t react – reflect. Don’t make any decisions for a time. The amount of time varies with how life changing the amount of money is, on the range of emotions you’re feeling, and on your own knowledge and skills. This time should not be about spending or investing but about reflection and learning about your money and yourself.
In our experience, we have helped many of our clients adjust to new found wealth. Here are a few suggestions…
- Keep control – tell friends and family that you appreciate their input but that you’re working through priorities before considering other advice and ideas.
- Don’t make rash decisions such as quitting a job or buying an expensive car.
- Park your assets. By doing so, you will gain breathing space.
- Protect yourself during this time by doing some tax planning.
- Form a team of advisors to guide you through this process in determining what should be done immediately and what can wait.
- Connect with financial, estate, tax, and risk management professionals who will respect your time to think through your options in relation to your goals.
- Delay gifts! We had a divorced client who inherited a large sum of money from her deceased father. She immediately gifted money to each of her four children. This made her feel good in the short term but she quickly realized that she would have to continue working into her 70’s because of insufficient retirement funds.
- Think about how to integrate your values with your new opportunities that are available to you.
Again, take it slow. Living a rich life is about more than money! Sudden wealth can provide not just a road to riches but to self-understanding, personal fulfillment and happiness.
OlsonWealthGroup.com is a full service wealth management firm. With wise counsel and clear strategies, our experienced specialists provide tailored approaches that strive to maximize wealth.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
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