Sudden wealth is an unexpected boost in your finances. It comes in various forms: inheritance, an unexpected stock payout, lottery winnings, or the sale of a business or property. Regardless of how sudden wealth comes to you, one thing remains true; newfound riches can put your values, priorities, and wealth management skills to the test.
Sudden wealth requires careful planning to mitigate potential pitfalls and ensure that your assets last over the long haul.
In this blog post, we’ll demystify common myths about wealth management and provide a few sudden wealth solutions to manage your assets better.
Debunking 4 Most Common Sudden Wealth Management Misconceptions
The sudden acquisition of wealth often comes at a time in someone’s life when they are least equipped to handle it. Even with the best of intentions, it can be all too easy to make a snap decision that has unintended results down the road.
The world of high-net-worth individuals is filled with examples of those who fell victim to poor advice. To avoid making the same mistakes, don’t fall for these four wealth management myths:
Myth 1: The Earlier you Make a Decision, the Better
It’s easy to think that the earlier you start planning for your money, the better. But that’s not always true. The sooner you take action, the less time you have to calculate the risks at hand and find solutions.
There are times when waiting makes sense. For example, if you’re unable to afford a large investment, it makes more sense to wait until you have enough saved up. Depending on your personal situation and risk tolerance, early financial decisions may not always be the best way forward.
What to do instead:
Slow down, and don’t make any rash decisions. Hire a professional financial advisor. These experts calculate the risks at hand and point you in the right direction.
Myth 2: You Don’t Need to Budget for Sudden Wealth
There are so many things to consider when you get a large amount of money all of a sudden, such as taxes and expenses.
Rushing to pay off debts and loans and splurging on all your lifelong dreams without a strategy are two common mistakes people make when blinded by sudden wealth.
What to do instead:
Hire expert Portland private wealth management advisors for custom sudden wealth planning services. A finance expert will offer advice on how to plan for your money and pursue your goals at the same time – for instance, they’ll show you how to grow your personal wealth while paying off your student loans.
Myth 3: Sudden Wealth Makes Your Problems Disappear
It is not uncommon to read or hear about people who have gained sudden wealth and how they are living their best lives post-money. However, what we don’t see much of are the stories of people who have lost all their money “enjoying their lives” or through bad investments, which is the more likely scenario.
According to the National Endowment for Financial Education, 70% of lottery winners go broke in three years!
In general, having sudden wealth often has its fair share of challenges. It is also quite common to think that having sudden wealth will solve all your problems and leave you happy. This isn’t necessarily true because money eventually runs out.
What to do instead:
Plan ahead. Sudden wealth will not last a lifetime if not managed wisely. However, you can grow your portfolio over time with the help of a trustworthy financial advisor.
Myth 4: You Don’t Need a Financial Advisor
If you feel like your sudden riches are spinning out of control it’s time to hire a sudden wealth advisor in Portland.
Getting third-party sudden wealth counseling can be a game-changer for your current situation. A financial advisor under fiduciary duty offers objective advice on how to invest, save and spend your money in a way that is best for you.
Wrapping Up
Interactive Wealth Advisors is a fee-Only financial planning firm that offers financial planning and wealth management services in Portland, Oregon to help you build, grow, and manage your assets.
From sudden wealth protection to wealth management transitions in times of unforeseen misfortune, we’re committed to helping our clients reach their financial goals, mitigate the risks, and make smart decisions on how to spend their money.
Book a call with us today and find out how we can help you make thoughtful financial decisions for your future.