Sudden Wealth Syndrome
Who among us hasn’t wished to win the lottery or receive a large inheritance from some rich, unknown uncle? It’s a natural and generally harmless exercise imagining having extraordinary wealth and the things we would do with it. Sometimes that dream does come true. And, not infrequently, it becomes a nightmare. It happens often enough to have its own name—Sudden Wealth Syndrome.
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Sudden Wealth Syndrome
Who among us hasn’t wished to win the lottery or receive a large inheritance from some rich, unknown uncle? It’s a natural and generally harmless exercise imagining having extraordinary wealth and the things we would do with it.
Sometimes that dream does come true. And, not infrequently, it becomes a nightmare. It happens often enough to have its own a name—Sudden Wealth Syndrome. Sudden Wealth Syndrome occurs when ordinary people become wealthy overnight—either through a substantial inheritance, lawsuit or lottery—and, rather than the wealth being a source of happiness, it becomes a source of anxiety, stress and confusion.
Money Changes People
Many people who achieve sudden wealth fall into loneliness and despair because this newfound wealth changes them and those around them. Relationships can change as some friends turn distant and others become too cozy, or family members meddle in the finances of their newly rich child or sibling.
Relationship damage can be self-inflicted as the suddenly wealthy person begins to question the genuineness of others—does this person like me for me, or for my money? The doubts can become sufficiently overwhelming to lead an individual to withdraw socially and emotionally.
Coping with Sudden Wealth
If you find yourself with the good fortune of gaining sudden wealth, there are steps you can take to manage it responsibly and limit its impact on your values, behavior and relationships.
Here are some key actions to take if you suddenly come into a great amount of wealth.
- Don’t make any immediate decisions. That includes large purchases. Rather, digest whatever feelings you may have about this new wealth, especially if it’s the result of a death of a loved one, divorce or the sale of a business.
- Keep the news to yourself and a very small circle of loved ones initially. This will prevent too many people from getting too chummy or asking for financial help.
- Seek out financial professionals, specifically a tax accountant and a financial advisor. The former can help you with understanding how to best manage the tax burdens associated with your new wealth and the latter can help you budget, set goals and manage the funds for sustained financial security.
- Consider engaging a therapist or life coach to help you adjust to the changes that sudden wealth will bring to you and your relationships.
- Be careful of scams and “new friends” once the word of your new wealth gets out. Yes, you’ll want to help out friends and family with medical expenses or onerous debt, or contribute to charities, but understand that only you get to decide how to spend your money.
Sudden wealth is arguably a blessing, but it’s important to keep in mind that it is your blessing. Surrounding yourself with a personal and professional circle that cares for and has your best interests at the forefront will help ease the transition and ensure your newfound wealth remains just that—a blessing.
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