Most people think it would be great to suddenly come into a large sum of money. They dream of what they could do with all that money and fantasize about being set for life! But more than half the people who come into sudden wealth lose it in a few short years. Unwise decisions, bad habits, and sadly, unscrupulous advisors can cause wealth to quickly erode.
Whether sudden money becomes a blessing or a curse, depends on your response when you receive it. We believe two crucial steps can produce a positive outcome.
If you have sold a business or inherited a large sum of money, your first step should be to pause. It’s a good idea not to make any large purchases immediately, in fact, you should consider a six to twelve-month moratorium on all major spending.
The next crucial step is to plan. You do not have to do this alone! Talk with your advisor. He will listen to your wishes and help you develop a detailed plan that is aligned with your personal values and goals. He will also act as quarterback bringing a team of professionals to the table, including attorneys to make sure proper legal documents are in place and CPAs who can help you limit your tax burden.
You may also wish to discuss near-term and future gifting to family and ministries. Your advisor can suggest strategies that will accomplish your wishes and provide the most flexibility.
If you experience a sudden money event, the advisors at Master’s want to help you make wise decisions, preserve and grow these assets, and encourage you to live generously. We want you to experience the gratification of leaving a legacy of wisdom to your children and grandchildren.
Have you witnessed anyone handle a sudden money event well? Poorly?
