Many movies are made about the simple guy who suddenly becomes rich overnight. Very often, like the hero of Brewster’s Millions, he receives a sudden inheritance with strange conditions attached to it, or like in Half a Sixpence, he inherits wealth and his whole life changes. Hollywood makes getting rich overnight seem like a dream full of glamorous possibilities.
In real life, there are times when a person may receive a sudden windfall – maybe as an inheritance, a dramatic lottery win, or when some shares that he invested in suddenly shoot up. Sadly, however, the law of “easy come, easy go” seems to apply to many of these lucky individuals. Before long, all of their new fortune disappears and they are left worse off than they began.
What went wrong?
Imagine what you would do if you became rich overnight. You may have the urge to spend the money as soon as you got it on a luxury villa, a new car, a live-in housekeeper, or a fabulous vacation. Before you knew it, you would be left with a lot of expensive toys, but no money in the bank.
The two things you must do now
If you are lucky enough to receive a sudden windfall, do the following two things:
1. Wait until your initial excitement dies down. Be ruled by your head, not your heart. Then make a list of realistic goals for your money. Revise your financial plan to account for the windfall, and test different scenarios to see if you are as rich as you think you are. Often people look at the zeros and are swept away by a feeling of grandness. Be realistic as to how much you have and what you can do with it.
2. Make sure that you have a qualified financial planner to help you draft a financial plan, and make the correct balance between investing and how much you can allow yourself to spend right now. Careful planning should enable you to make the most of your opportunities when they come knocking.
I taught a short course called, “3 Tips to Dealing with Inheritances.” You can sign up for it at www.ProfileFinancialAcademy.com for free. If you find yourself in a position now that you have gotten some money, don’t do anything until you have spent 15 minutes listening to the ideas there. And for the price – free – you have nothing to lose.