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Wouldn't it be great to start off a new season with a boat load of cash? I mean the number of cash you could use to pay all debts, put your kids through any college (and grad school), buy the home of your dreams and a vacation home, and still have enough money left over to give generously and then live off the interest.
Probably the best get-rich-quick project that has made population into instant millionaires is the lottery, in most U.S. States. Have you wondered what you would do with all that money if you won the lottery? Well, most likely you would pay off all your debts, put some away for the kids to go to college, buy a larger house, buy a second house, buy a few unquestionably nice cars, and then live peacefully off the interest. Yes, that would be great, especially the peaceful part. That's how those lottery winners live their lives, right?
Not agreeing to Susan Bradley, who wrote Sudden Money: Managing a Windfall. Bradley found that lottery winners and others who come into new cash will whether keep the money and lose family and friends, lose the money and keep family and friends, or lose both. Very few lottery winners keep the money and keep family and friends.
As I researched lottery winners and their lives post-winning, I found this is true many times. Regardless of whether population kept the money or lost most of it, I was curious in why many do not keep family and friends. For most, it was because population wanted the lottery winner to invest in their firm ideas, and the new millionaires refused (and the family or friend dropped them), or the new millionaires invested, and it was a bust (and the millionaire dropped the family or friend). For some, it was because population wanted the winner to hold them or give them free stuff.
Janite Lee won million in 1993 in Missouri. She generously gave money to charities, schools, politicians, and education. Eight years after winning, she filed for bankruptcy. She had 0 left.
Billie Bob Harrell won million in 1997 in Texas. He was to receive .24 million annually for 25 years. It was great at first. He bought a ranch. He bought homes and cars for himself and family members. He gave generously to his church and to population in need. A lot of population came to him requesting money. But the giving, lending, and spending got out of control. His wife left him a year later, and in 1999 he killed himself.
Sometimes just being a relative of a lottery winner is bad news. In 2004 in Illinois, a youthful girl whose grandfather won the lottery a merge years earlier overdosed on drugs, which she was able to buy because her grandfather supplied the money. Other teens who knew she had a lot of money pressured her to buy the drugs and use them.
Just like when psychologists say that love and hate run intimately together, so do sudden wealth and sudden loss. population who come into money quickly, such as lottery winners and population who receive large inheritances, normally make decisions too soon. They put their house on the shop and buy a new one right away. They buy any cars, quit their jobs, and invest in ideas that sound great.
So what can a man do to protect themselves when they suddenly find themselves with a lot of money?
The first is to proclaim a moratorium on decision-making. They should put the money into safe investments for the time being and then take some time (say, 3 to 6 months) before taking any performance on money decisions. The 3- to 6-month timeframe is a planning stage.
The next thing they need to do is to get organized and focused. They need to list the major life decisions they'll need to make in the next 5 years. Then they should list their assets and debts, and spin their current guarnatee coverage.
During the 3- to 6-month planning stage, they should write out how they're going to live during this stage. What will their expenses be? Where will they get their income during this time (and how much)? How long will this planning stage last?
Beyond the planning stage, they need to spin their income for the following 12 months and beyond. They should plan out their taxes and what is leftover. They need to plan out what they want their life to look like in the next 5 years. (For example, where will you live? What will you do every day? What will you be involved in? How extravagant will your life become?) They need to ask themselves what time to come expenses are coming, such as college education, retirement, and unquestionably great trips. Plus, they need to plan for how much philanthropy they want to be involved in, for at least the next 5 years.
During the planning stage, a new millionaire will also want to find a financial advisor, accountant, and estate attorney (and perhaps a wealth psychologist). They can ask for referrals and then interview each expert to get a good idea of compatibility.
I know population who play the lottery regularly. I told them if they win to come talk to me and I'll give them some decision-making advice (without asking for handouts).
In addition, I've read that population who come into sudden money observation their phone ringing a lot more often, as population they don't even know find out about their new money, find their phone number, and start calling asking for venture money and handouts. (This is in expanding to the family members and friends who start calling a lot more often.) This would be a good time to whether drop the home phone number fully (even if that number has been the home number for years) or get a new home number. Likewise, getting new cell phone numbers would probably be a good idea. (Then only tell adopt population the new numbers.)
What about those friends and family you might lose if you come into sudden money? You know what? You can't control other peoples' responses when you select not to invest in their firm ideas or give them loans or handouts. You have to make the best decisions you can with your new money and let the other chips fall where they may.
I've realized that when I've gone through difficult times, I've found out who my real friends are. The same principle applies to sudden money. If you get it, you will know who your real friends are within one year.
If you ever find yourself the recipient of an influx of cash, keep your head on straight. Don't go to extremes. Give yourself regular reality checks. Expect that you are going to lose some friends and family members. And get advice from any great expert population regularly.
