As featured in South Lake Neighbors Magazine (June 2019)
By Marc D. Langva, CFP®, Founder & CEO at WorkOptional
Picture this…you just received a big inheritance, a large settlement, a huge sports contract, or better yet, you just won the lottery! No worries now, right? Wrong.
These windfall events can be extremely exciting as you can finally take care of your family and friends, buy that big house, and travel anywhere. But, how can you ensure your money will last you and your family throughout your lifetime? Seems like a silly question to ask. But, did you know about 70 percent of people who win a lottery or get a big windfall actually end up broke in a few years? According to the National Endowment for Financial Education.
When one receives a windfall of money, whether it $25,000 or $25 million, they are at risk of mishandling their money and tend to regret financial decisions. This behavior is so typical that it’s been named “Sudden Wealth Syndrome.” Many times, what follows is stress, guilt, social isolation, mistrust, and poor spending habits.
You see, when you accumulate wealth throughout the years, you become accustom on how to spend, invest, and make financial choices that are beneficial to your circumstance as they evolve. When you get a big lump sum that falls into your lap, it’s a tough learning curve that many don’t know where to turn or how to handle.
One of the best things you can do is seek professional advice. A Financial Planner that is a CFP®, in conjunction with a tax professional and estate planning attorney, can help you to make sound financial decisions and create a plan for managing your good fortune for your future.
Find a financial planner who will have your best interest at hand. Finding a financial planner who will give you a holistic view of your life and help you to create a financial plan that will last, to include but not limited to tax strategies, estate planning, charitable giving, investments and legacy planning, is key.
Keep your windfall quiet, the fewer people who know the better. Avoid hasty decisions you may regret in the future. Set up goals and keep your guard up. Don’t quit your job, don’t buy that million-dollar home or Ferrari, or spend lavishly until you have your plan and goals in place for a successful future. After all, you don’t want to be in that 70% that go broke in a few years!
In a nutshell, no matter what your windfall situation is, protect your assets so they will last you a lifetime!
Margaret Leto May 22nd, 2019
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