Published On: Wed, Oct 4th, 2017

Managing Unexpected Wealth

While coming into money is an exciting time, when it’s a large amount and unexpected, it can be an overwhelming thing to deal with. Windfalls come in many forms, from wins in gambling to an unfortunate situation where an inheritance is involved. The thing is, the greater amount you may receive, the more stressed out you can become while you try to deal with what to do next. Reactions to financial stress vary greatly, with some people spending every penny without thinking straight and the rest holding onto it and too afraid to spend anything. We’ve all heard the stories of those who come into sudden money and fritter it away only to be destitute later, so it’s important to avoid that scenario!

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Before you begin making grand plans about investment properties abroad like the ones you can click here, you need to know how to plan your money properly. In the end, it doesn’t matter how you came into the money. What matters the most is how you manage the money going forward so that you can grow your wealth in a responsible way. We’ve got some tips for you below so you needn’t worry!

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Count It Up. When you come into money, you need to be sure of the exact amount you have and any legal contracts that come with it. For example, you come into money through inheritance – you need to ensure that every bit of it is truly yours and isn’t to be further shared or taxed. Get through the small print of your contracts and if there is something you don’t understand, ask for help. We cannot stress this to you enough that asking for guidance is crucial to ensure that the money you are now dealing with is definitely yours.

Professionals: Assemble! Coming into money can propel you in business dreams you didn’t think possible until that moment. There’s nothing to stop you from investing your money wisely in business, metals, stocks and even real estate and if you choose to go down any of these routes, you will need a perfected team of professionals and advisors on your side to ensure things run smoothly. Keep yourself protected when it comes to investing in business and be sure to understand what level of insurance you need by checking out this website. If you have the right advice in business, you can be a success with the money you’ve come into. Investing in yourself is important, and putting your newfound wealth into outside investments could change the game for you. Be smart about it and your windfall could last you the rest of your life.

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Plan Ahead. If – so far – you’ve been fairly flippant about the future, now is the time for change. Your retirement and pensions are going to keep you supported in later life and if you haven’t invested in either of those things now is the time. Financial planning to include the winter years of your life will make a huge difference and mean that you are secure and prepared for when the work stops. Don’t just invest the minimum, either, evaluate the type of lifestyle you want and go from there. The best thing you could do is give yourself comfort and save the financial worry from landing on your family.

Relationship Vigilance. It sounds awful, but new wealth can bring about many friends and family members that you may not have heard from for some time. This type of friend is not a true one for you and you should be very wary of those that you haven’t heard from until this moment. Financial advisors will often recommended locking down money in a trust that instead pays you a salary. This way, if anyone comes to you cap in hand asking for a hand-out, you can ask them to direct monetary questions toward the advisors. This can elicit feelings of embarrassment and hopefully puts them off from asking you again. Always instruct a lawyer to advise you on your rights, and if you feel insecure about your wealth get as much help as possible from the bank so that you can keep yourself and your wealth protected.

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Spend Small. If you came into a huge amount via the lottery, you’ll be tempted to start buying up property like Monopoly. While it is tempting, try and refrain from spending in large sums on big-ticket items until you are well-versed on how to look after your finances and minimise your exposure. By all means, pay down debts, take a vacation and get yourself square with the IRS, but take a great deal of time to consider your future. Write a will, pay for a funeral and dictate where your wealth should go should something happen to you. Pay off the mortgage but refrain from investing in property straight away. You want to be able to make your cash last for you and so you have to be sensible, even when all you will want to do is roll around in dollar bills!

Coming into wealth may feel like the best excuse to quit your job, move out of your parents and start living the high-life. But the high-life comes with a high-price and money isn’t bottomless. It will take some time, patience and a lot of willpower to keep as much of your cash down as possible so that you aren’t frittering it away too quickly. The lifestyle you want to lead will very much depend on how you manage your wealth in the early stages. Being safe and steady may sound like a drag, but trust us when we tell you it’s better to be sensible now and stay secure later than find yourself homeless, penniless and without a job to your name because living like a Rockstar turned out to be something very different to how you imagined!




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- Young Entrepreneur & Daydreamer. Working towards making the HatchByte group among the top online media publication in India.