Sudden wealth doesn’t happen all of the time, but it does happen. Rather than a rags-to-riches situation like a contest or lottery win, common ways people suddenly find themselves with wealth include inheritance, a major settlement, and sudden business windfall from stock payouts or the sale of a business.
Although there’s a lot of excitement that comes with sudden wealth, serious challenges can also follow just as quickly. In comparison, people who obtain wealth over time can address issues over a much more measured timeline.
In the newsletter, Sudden Wealth: What Should You Do If You Strike It Rich, we discuss some of the challenges and what to do if you are fortunate enough to become suddenly wealthy.
Relationship Struggles Due to New Financial Status
When you become rich quickly, you will be shocked at how it affects the relationships in your life. One example is:
Family and friends may knock on your door looking for funds from someone they now see as a financial “white knight”.
A marriage or other intimate relationship can be impacted too. Additional financial decisions for the money come into play as you try to work through them as a team. Families who don’t have experience with wealth management may find themselves in troubled emotional waters trying to process it all.
Ways Sudden Wealth Can Be Lost
As the old saying goes, “easy come, easy go.” You can lose your wealth just as fast as you received it if you are not careful enough. People who obtain sudden wealth fall victim to these mistakes more than others. One way to ruin wealth would be giving away too much money.
“If you give too much of your wealth away, you can end up in your own precarious financial position faster than you might imagine. Even loaning money can prove problematic and occasionally disastrous.”
How to Protect Your Sudden Wealth? Take Ownership
To help navigate sudden wealth, here is a process to help you and a loved one. Trust in a consummate professional to help guide you through the challenges you will experience. These experts can act as an advisor on purchases and can be an outside eye to see your financial situation clearly.
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Financial Harvest Wealth Advisors Team
The Financial Harvest Wealth Advisory team is dedicated to helping address the unique financial planning needs of each family, business, or individual that we have the privilege to serve. Our team members are focused on client success and helping our clients realize their most significant and meaningful life goals.