How to successfully manage sudden wealth
Acquiring sudden wealth can be exhilarating, but also overwhelming. Whether you acquired the wealth from a successful business venture or a lottery win, the steps you take after such gains are critical to protecting your newfound fortune. If you aren’t careful, you can fall victim to “sudden wealth syndrome” where you become unable to manage money, leading to a financial disaster. Luckily, there are ways to prevent this from happening.
Here are two steps that you can take to avoid squandering your estate and losing it all.
Hire a team of professionals
You may have already realized that managing large sums of money on your own is no easy task. From tax to legal and social implications, building a team of professionals can help you to address any issues you may experience. In addition, they can help you to build a plan to ensure that you have covered all your bases.
You may want to consider consulting with an attorney before hiring a financial planner. Financial and legal steps often intertwine so it can be a good idea to have legal counsel when meeting with other professionals. Keep in mind that running to a friend, family member or acquittance to begin building your team may not be in your best interest. They may not be accustomed to handling large sums of money. Researching individuals who are experienced with managing large estates can help you to decide who is best suited for the job.
From a new house to a car, you may already have an idea of where you’d like the money to go. However, resisting the urge to splurge and creating a financial plan can be beneficial in the long-run. Including goals such as paying off high-interest loans, donating money to charity and investing it are some things to consider adding to the list before going on a spending spree. Of course, you may decide to make small splurges in the beginning, but going overboard could land you in hot water. Your team of professionals can help you to prioritize which purchases should take precedence over others.
Winning big can come with a price. Exercising caution may be your best bet to hit the ground running.
