What to do if you get pretty rich, pretty fast?
I hope that Don’ts and Do’s of a pretty rich pretty fast scenario are (at least on the surface) obvious and simple. They are not all obvious and simple to act on, but hopefully obvious and simple to accept.
However, the next part is proper tricky. I read a piece of research from the States last year that said...
“Our study found that people who receive a large and unexpected windfall have the same level of emotional anxiety as someone who has just been diagnosed with cancer.”
We are really dealing with something serious here.
Part 3: Dealing with your Emotions
Research (as well as our own experience with clients) on this matter shows that when receiving a large sum of money, be it from an inheritance in the family, a lottery win or the sale of your business, you are going to go through (whether you like it or not) a number of emotions. And emotions (good and bad), by their very nature, will impact your decisions, one way or another.
You would also likely jump to the conclusion that anyone in these situations would only have a feeling of joy and happiness. But that can be oh so wrong. A number of the emotions we have experienced in these scenarios may surprise you, but here are a few:
- Fear of loss
- Lack of confidence
- Lack of experience
- Urge to recklessly give it all away
Whilst there is no such thing as an emotion-free decision, it is important to acknowledge and then deal with emotions before making any key decisions. It is highly unlikely that anyone experiencing the more negative emotions from the above list is going to make decisions that will positively benefit their long-term wealth and well-being.
Likewise, there are loads of cases where people full of excitement and exuberance have whittled their long term wealth down to nothing in next to no time at all. See this previous article for evidence of just that.
Acknowledge your feelings. Know that these feelings are normal, it is just the magnitude of getting pretty rich, pretty fast, that is less normal. You’re not wrong or right in what you’re going through.
This is why in part 1 we also suggest you leave it 6-12 months before you do anything with your money. You need to deal with the roller-coaster ride of emotions that you're about to embark on. Unlike normal roller-coasters, you'll most likely have been queuing for a lot longer than 1-2 hours, likewise the ups, downs and rattling around, will last a LOT, LOT longer than 2 minutes.
Don’t push your emotions away or bury them. It is physically impossible to do that without side effects. Speak to people, get professional help. Good Financial Life Planners will be well-versed in assisting in this area, as will good therapists and psychologists. Gain back control of your emotions before moving forward with a proper plan.
Trust me, you’ll be so glad you did.
Alfie Mullan, April 2019
Want to hold a conversation that will quite literally change your life? Well drop me an email and we can get this new life on the road.