How to Deal with Newfound Wealth

You could throw a ball into a crowd of people and easily hit a person who has dreamed of what it would be like to be wealthy. But what happens when it actually happens and you find yourself “rolling in dough”? If you’re smart, you’ll hire a financial advisor to make some smart financial decisions, but in case you’re still in shock, here’s how you should deal with newfound wealth.

Realize That How You Got the Money Can Affect How You Keep It

If you earned your money through a trust or inheritance, but start spending obscene amounts of it, another family member could file to have your funds frozen until you are more financially responsible — especially if you’re a young person. If you earned the money through endorsements, those deals could end as easily as they began, so don’t spend the money and potentially be left with nothing.

Keep It Quiet

Unfortunately, once people find out you have all this money, it’s not uncommon for “old friends” to pop out of the woodwork and ask for a loan or offer their own financial advice. The few people that know the better.

Don’t Rush on Decisions

Take time to get used to having all this wealth, and make the first few months a “no decision” time in which you don’t make any choices to spend or hastily invest the money.

Figure Out What You Actually Have

Before you go spending or investing this newfound wealth, figure out what is actually yours. Check all the legal documents associated with it — tax forms, wills, etc. — to determine what actually belongs to you.

Hire a Financial Advisor

You’re not used to having this much money, but a financial advisor who deals with high profile clients does. They’ll know how to safely manage your money, protect it from people who may suddenly ask for a loan (and yourself, if you don’t think you can control your spending habits), and help you set goals to build your wealth for generations to come.

Get Used to Being Wealthy

You have this money now, so don’t feel shy about it. You don’t have to be one of the rich people you see in movie who are obnoxious and greedy with their wealth. You can do some good with your money, take a little vacation, or just let it grow. Just don’t beat yourself up about having it.

Let American Investment Planners, LLC be your resource. Our financial advisors are ready to sit down and discuss your financial goals for your investments and beyond. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.