What will you do if you suddenly become rich? If you’re like most people, you might come down with a case of Sudden Wealth Syndrome — symptoms marked by high-stress levels and panic attacks common to people after they unexpectedly get a large sum of money.
In that situation, 59% of Americans are likely to waste money on impulse buying, paying unnecessary interest, overpaying for digital services, and other meaningless spending. However, it doesn’t have to be that way.
In this blog post, we focus on how to deal with sudden wealth; we provide expert sudden wealth management tips to help preserve your wealth.
Let’s get started on what sudden wealth management is and how to manage sudden wealth.
What is Sudden Wealth Management?
Sudden wealth is an unexpected windfall of cash, such as from an inheritance, lawsuit settlement, or unanticipated bonus. And sudden wealth management refers to the process of planning for the short and long-term effects of this new financial situation. Individuals who become suddenly wealthy often struggle to manage their wealth effectively.
Sudden wealth management helps you make smart decisions about your sudden money. It entails a series of activities in managing a financial windfall so that your newly-acquired funds can last and grow.
Five Tips For Managing Sudden Wealth
Everyone dreams of winning the lottery or being offered a job that pays more in one week than most people earn in a year. But, what if you find yourself in this fortunate position? What do you do next? Do you invest it wisely, or blow it all on fast cars?
Here are a few sudden wealth planning tips to ensure that your sudden wealth lasts:
1. Slow Down! Don’t Be in a Rush to Buy Things
No amount of sudden wealth advice can help you make the most out of your wealth if you rush into buying stuff. Take a moment to think about your newly acquired wealth.
This helps you to make better decisions on how to use large sums of money.
2. Make a Plan Before You Spend a Penny
Make a list of the things that you want to do with your money. Identify your passions, goals, and aspirations. Calculate the taxes.
Find out how much is left after taxes, and think about how you spend this money to boost your wealth even further. While at it, avoid planning with emotions.
3. Set a Budget and Don’t Overspend
It is best if you set a budget so that you don’t overspend.
You don’t want to be one of the many people who suddenly become rich only to go broke after squandering all their money.
Set a budget for all your expenses. Calculate how much money you want to spend on yourself and your family.
Do the taxes, calculate the legal fees, and account for other expenses in your budget.
4. Diversify Your Portfolio
You can make your money grow even more by diversifying your portfolio.
This means investing your money in various assets such as real estate, stocks, and bonds. You can also invest in gold and other precious metals.
Remember, you have to be careful with the amount of money that you invest in each asset.
5. Seek Professional Advice from a Sudden Wealth Advisor
You don’t have to figure out everything on your own. A financial advisor can help you build a portfolio and manage your money.
A financial advisor can also help you protect your money against unforeseeable risks such as lawsuits.
How Can A Financial Advisor Help?
Not sure how to handle sudden wealth? A sudden wealth financial advisor can navigate the legal jargon that usually accompanies unexpected wealth. These professionals are experts in various financial matters and can easily understand your financial situation. They also have experience in helping people create sudden wealth management plans that act in their best interests.
If you’re looking for sudden wealth management in Portland look no further than Interactive Wealth Advisors. Our experts are qualified to guide you through sudden wealth management. What’s more, each of our Portland financial advisors is skilled in everything from retirement planning to estate and tax planning. Get in touch with us for more information about how to manage your sudden wealth!