Most people think that if they suddenly became rich, all their problems would be over, and their quality of life would dramatically increase. Winning the lottery or inheriting a fortune sounds like a wonderful dream, doesn’t it?
But unfortunately, when this dream comes true, it often becomes a nightmare. And if you have suddenly become wealthy, you might know this to be true. You might feel anxious and unsure of what to do with your money. You might even feel that you didn’t deserve this wealth or that everyone will try to take advantage of you now that you are rich.
If you are wondering how to manage sudden wealth, rest assured that you are not alone. These tips should help you figure it all out.
1. Don’t let everyone know about your sudden wealth
Although it might be tempting to tell everyone you know about your sudden wealth, it might be best to keep it a secret.
You should tell only your family and your closest friends, those with your best interests. But don’t tell your neighbours, everyone, you work with, your dentist, your mailman or that friendly waitress at your favourite restaurant.
By keeping your sudden wealth a secret from most people, you will avoid seeing everyone come to you asking for gifts or financial support.
2. Don’t make any hasty decisions
Of course, money is meant to be spent. Or invested. But you should avoid making any hasty decisions. After all, your money will not disappear if you don’t do something with it in the next few days, weeks, or months.
If you’re unsure what to do with your new wealth, simply take as much time as you need to process your feelings.
If you feel rushed to make decisions, you could make a few bad ones and lose a lot of money.
3. Figure out how much money you have
Before you do make any decision, it’s important to take a moment to figure out how much money you have. You must pay taxes if you have won, inherited, or earned your sudden wealth.
And if your wealth came from an inheritance, the will might even state some limits on how you can spend it. Be sure to read all the fine print and take the time you need to fully understand the situation.
4. Set some short-term and long-term goals
When you know exactly how much money you have, it can become easier to set some goals. Would you like to buy a house? A new car? To go on a vacation? To send your kids to the best college and university? To donate to charity? You might be able to do all this and more.
But remember that staying grounded is the best way to help you adjust to your new financial situation. Suddenly becoming wealthy doesn’t mean you need a new home, new friends, new hobbies, and an entirely new lifestyle.
You are still the same person. But you now have more money, which you can use to improve your life and the world if you want to.
5. Consider hiring a financial advisor
If you need help to achieve your new goals, you should consider hiring a financial advisor. They will help you figure out how much money you need for each goal.
Your financial advisor will also help you make the most of your money, choose great investment opportunities, and make your wealth last.
Make sure you choose a financial advisor you can fully trust. You only want qualified professionals to help you with wealth management.
6. Take measures, so you don’t spend everything right away
The worst thing you could do is start to overspend and blow away all your money before you even realize what is happening. Allow yourself a few big expenses if you want to, but then stay reasonable.
Make a budget. Keep a large sum in your savings account and another in your checking account, and invest the rest. Even if you don’t hire a financial advisor, take measures to make your money last.
7. Don’t push friends and loved ones away
Unfortunately, many people who suddenly become wealthy push their friends and family away because they fear their loved ones will try to take advantage of them.
You should make an effort to stay close to your loved ones. It might be difficult to learn to say no whenever someone asks you for some money, but it’s worth it if you don’t want to end up alone with your fortune.
Your loved ones will surely see you differently now that you have money. But try to stay close to them and help them see that your wealth did not change your personality.