NOW THAT YOU ARE SUDDENLY RICH WHAT DO YOU DO?
It will surprise you that having to deal with sudden wealth can be frightening. There are necessary steps that you can take to help you manage the emotional and financial crisis that is experienced when sudden wealth is made.Some of the ways people come into sudden wealth are through inheritance, stock options, business sale, lottery, etc.
When it happens you can become suddenly overwhelmed and you see yourself with a lot of money wondering what you are going to do with it. For the inherited wealth it can sometimes come with the death of a cherished family member making bad news to be mixed with wealth. The mixed feeling can be toxic leading to worries and mistakes that can endure forever. There are some steps that can be undertaken to be able to manage the emotional and financial crisis:
Be Calm; Don't Act Fast
You run the risk of making serious mistakes. A lot of advice will come from a lot of people, some of which will be of good intention and others self-serving. You should select a financial advisor the way you will select other vitally important experts: by their competencies, qualifications, and relatable values and concerns. Today you find different kinds of advisors with different qualification levels and competencies. You have to learn how to scrutinize them; interview them and find out how they plan to work with you. See if they have any references and verify them. Trust your instincts and choose the one you feel apprehends your desires and goals the most.
Allow Yourself the Chance for Financial Success If wealth management is a new thing to you, you can get intimidated or have a guilty feeling for being in wealth. People tend to see money gotten from insurance or inheritance as 'death money.' You need to block some emotions so that you will be able to make good decisions. Sometimes people end up attaching feelings to wealth or property because of their relationship with the previous owner.
Do Not Make Financial Mistakes
When there is something you don't understand, you should ask for proper clarification. A lot of paper works or financial documents can intimidate you creating an anxiety that is related to studying math by students that hate numbers.Not a lot of people can understand these documents when they are considering their choice of investments unless they've had some specialized training.
When you don't understand them it is better not to sign the papers. You have to ensure that you work with financial advisors that are willing to bring out their time to explain things to you succinctly. While you make your decisions, you need to watch out for tax implications. Reports have shown that investors, in general, do not know a lot on issues that relate to tax and this can come at a high cost.
Check Your Inventories
Gather all necessary information before setting goals and making future decisions. You need to know your asset and what they are worth as well as their tax implications. Take note of everything; the debt, stock, bond, funds, insurance proceeds, collections, antiques, art and automobiles, cash and bank accounts. This will take quite some time, so it might be wise to keep the property liquid. Create sufficient time to set your goals and make decisions.
Setting Your Financial Targets
How do you understand wealth? A publication on a financial planning journal has related money to not just being a means of exchange but much more. Money is described as a love substitute, a symbol of authority, a yardstick for success, an instrument for making good deeds and a cause of major anxiety. It doesn't just end there; it is seen as a culprit, an emotional power of its own and a crossroads in marriage. If there is a financial plan that is properly managed, it promotes freedom and gets rid of anxiety, thus calming fear.
A survey was conducted by Harris poll for the American Psychological Association in 2014, about stress in the US. 72 percent of adults had reported that at some time they were stressed about money. 36 percent reported feeling uncomfortable when they talked about money. Women get more stressed about money than men most of the time. Even those that have amassed a huge amount of money still worry that they might get to lose it. Their fears should be communicated to their advisor especially on their security need and their tolerance level of risk. Both men and women in the survey have cited the elimination of debt as their top financial goal.
Being able to give money away is yet another important aspect of various financial plans. Making gifts that are wise and generous is also a considerable factor in financial planning. You would be surprised that people get pleasure from being able to considerably help churches and charitable organizations. Couples too suffer from sudden stress that comes along with sudden wealth.
Luckily, there are changing views about gender and money power and couples nowadays are harmonizing more on shared power and accountability. Managing wealth in a family is no longer presumed to be the role of the man. It can be managed by the man or the woman or both with the family getting stronger with a financial plan that mirrors its desires and future ambitions. Good counsel and concrete planning can get rid of the anxiety that comes with the management of sudden wealth so that you will delight in the benefits.