5 Tips on How to Handle Sudden Wealth
Whether you just signed a multi-million dollar contract or inherited property from a wealthy relative, here are some tips to help you keep—and grow—your wealth responsibly
5. Don’t make big expenditures until you are comfortable with your new financial position. Don’t get sucked into the exaggerated scale of your financial windfall. Take care of taxes on your new money, pay down debts, take a small vacation but don’t make too many changes at once. Consult with your professional team. If the amount you have received is substantial relative to your prior situation (i.e. invested at 3% per year the annual return covers your dream standard of living and then some), take the time to consider your good fortune and your position as a steward of the wealth. Be mindful of your responsibility to pass some wealth to the next generation, and give to charity.
Written by: Robert J. Gordon, MBA, CFP®, AIFA®, is Senior Financial Advisor with Investor Solutions in Miami, Florida