The reality for many people out there is that they work very hard their entire life and they hope to get by and live a comfortable lifestyle. Living cheque to cheque is a reality that many single people, families, and seniors have to deal with. In most cases, they learn how to create a tight budget, stick to it, and try to live within their means.
So, what happens when the absolute unthinkable happens and you suddenly come into sudden wealth? Perhaps you win the lottery, maybe you have been left money in a will that you weren’t expecting, or perhaps you just got a massive job promotion you never dreamed possible. Regardless of how it happens, coming into sudden wealth is a very exciting and often daunting time. It’s normal to want to splurge and spoil yourself at first, but then reality tends to sink in and you realise that you need to be smart about this sudden wealth.
Here we’ll take a look at some tips that can help people who have come into sudden wealth.
Meet with a Financial Planner and Accountant
Even though this doesn’t sound very glamorous, protecting your wealth and looking at things in a very realistic manner should be a priority. You will want to speak with an accountant, possibly an attorney, and a financial planner. Each of these professionals brings a little something different to the table and will help you to figure out the best way to keep your finances safe and secure. They can be referred to as your team of wealth professionals. At this point, you can talk about possible investments if this is something you are interested in.
Understand Exactly How Much Money You Have
It’s also important you understand exactly how much wealth you have come into; it shouldn’t be a vague estimate. Again, a financial planner can help you figure this out. With your team, it’s a good idea to also set up a life plan. Is this enough money that you are set for life or do you need to be mindful of what you spend?
Pay Off Your Debts
With your sudden wealth, there’s a good chance you may be able to pay off some or even all of your debts. While you may want to hold back some of that money for your own purchases, clearing out your debt will not only look great for your own personal credit score but also lift a weight off your chest since you will no longer owe anything.
Use Caution with Big Purchases
Going back to the original thought that it’s normal to go ahead and splurge when you come into sudden wealth, you may want to hold back on those huge purchases. Buying a new house, multiple cars, and heading off on expensive holidays is going to have you blowing through your cash a lot faster than you think. Sudden wealth or not, it’s always wise to think through any major purchase.
Coming into sudden wealth will most definitely change your life, but at the same time, you want to stay level-headed about your finances and make smart decisions. For more information about Blue Trinity’s wealth management services click here