{"id":12099,"date":"2021-12-01T10:27:09","date_gmt":"2021-12-01T16:27:09","guid":{"rendered":"https:\/\/johnsonwim.com\/?p=12099"},"modified":"2021-12-01T10:27:09","modified_gmt":"2021-12-01T16:27:09","slug":"how-to-manage-sudden-wealth","status":"publish","type":"post","link":"https:\/\/johnsonwim.com\/how-to-manage-sudden-wealth","title":{"rendered":"How to Manage Sudden Wealth"},"content":{"rendered":"\n
Have you experienced a sudden windfall? We\u2019re here to help you navigate the complexities of sudden wealth. Ultimately, you\u2019ll want to rely on a team of professionals to help advise you.<\/strong><\/p>\n\n\n\n There\u2019s gradual money and there\u2019s money that comes suddenly. Most of us are used to gradual money\u2014earning an income and building a nest egg over time. It\u2019s a slow and steady process, but as our net worth increases over the years, we adapt and slowly become financially educated.<\/p>\n\n\n\n So what exactly is sudden wealth? Sudden wealth means getting more money than you\u2019re used to being responsible for and getting it all at once. There\u2019s no minimum dollar amount to qualify as sudden wealth. The distinguishing factor is that the amount has to be large enough to take you out of your financial comfort zone. Here are a couple ways on how to manage sudden wealth.<\/p>\n\n\n\n Sudden wealth can come from anywhere, it could have resulted from luck or hard work. It may have been years in the making or it may have happened in an instant. Typically, money that comes suddenly originates from a lawsuit, divorce, sale of a business, inheritance, lottery winnings, sport\/entertainment contracts, retirement packages, or stock options.<\/p>\n\n\n\n Regardless of where the money comes from, you\u2019re the same person you were the day before you received it, but you are quickly thrown into a new and sometimes, an uncomfortable situation. While sudden wealth sounds like a great thing, it can cause anxiety, indecision, and fear in those who don\u2019t adapt or develop a strategy. Here’s a couple strategies you can try implementing if you find yourself in a sudden wealth situation.<\/p>\n\n\n\n The first step you\u2019ll want to take is to create a financial team composed of people who have knowledge and experience with sudden wealth. They can help you navigate the numerous tax, financial, and legal issues that arise. There may be time-sensitive opportunities to deal with immediately so this is the first step you’ll want to take that can help you save or defer taxes.<\/p>\n\n\n\n For an essential team, you will want to have an experienced wealth advisor, estate attorney and a financial advisor, or a full-service fiduciary <\/a>to cover all your bases. Your financial team needs to have only your interests in mind.<\/p>\n\n\n\n High-net-worth individuals can be subject to a variety of potential tax, liability and investment risks that, with proper planning, can often be mitigated. An experienced fiduciary <\/a>may have a team of individuals they can use to address these issues. With various types of windfalls come several potential tax pitfalls as well as the need to create a cohesive investing strategy to provide support long term. Having a full-service fiduciary in these situations is helpful to determine what areas might be a good use of time and money. At the very least, a fiduciary may help mitigate the different situations you may need to work through.<\/p>\n\n\n\n After you create the list, categorize every item as a \u201cWould Like\u201d or an \u201cIf Possible.\u201d Would Like items are things that are important to you such as buying a new home and paying for your children\u2019s education. If they\u2019re not already on your list, I would add \u201cpay off debt\u201d and \u201csave for retirement\u201d to this list. Possible items include everything else: travel, gifts to family members, and quitting your job. Once you\u2019ve brainstormed everything you want to own and do, rank those items in terms of importance. Here\u2019s how your list should start:<\/p>\n\n\n\n Before you buy a new house or car and before you quit your job, you need to determine how far your windfall will allow you to go. Give your ranked wish list to your investment advisor to help you calculate what you\u2019ll be able to do without getting into financial trouble down the road.<\/p>\n\n\n\n This is one of the most important steps because you\u2019ll know what you can do and what you can\u2019t. Once you know what you can afford, go the extra step and develop checks and balances. For example, make a commitment with your fiduciary or investment advisor that you will run all purchases by them if they exceed more than a set dollar amount.<\/p>\n\n\n\n The most important thing you can do in this situation is to monitor your spending. Keeping your financial plan updated helps you notice when you’re starting to get off track. Meeting with your investment advisor and CPA at least once a quarter is a good way to keep your plan up to date.<\/p>\n\n\n\n Here is what you’ll want to keep an eye on every quarter:<\/p>\n\n\n\n Whatever the source of the sudden wealth, it\u2019s yours now. Relax, take a deep breath, and follow these 4 simple steps above to help ensure you’re managing sudden wealth correctly.<\/p>\n\n\n\n With Johnson Wealth and Income Management, your wealth team, tax professionals, risk management, estate planning and money management professionals are all under one roof<\/a>. For more information on our financial advisors and sudden wealth management, contact us here<\/a> today!<\/p>\n\n\n\n All written content on this site is for informational purposes only. Opinions expressed herein are solely those of Johnson Wealth & Income Management and our editorial staff. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. Investing involves risk. There is always the potential of losing money when you invest in securities. Asset allocation, diversification and rebalancing do not ensure a profit or help protect against loss in declining markets. All information and ideas should be discussed in detail with your individual advisor prior to implementation. The presence of this website, and the material contained within, shall in no way be construed or interpreted as a solicitation or recommendation for the purchase or sale of any security or investment strategy. In addition, the presence of this website should not be interpreted as a solicitation for Investment Advisory Services to any residents of states where otherwise legally permitted to conduct business. Fee-based financial planning and Investment Advisory Services are offered by Sound Income Strategies, LLC, an SEC Registered Investment Advisory firm. Johnson Wealth & Income Management and Sound Income Strategies LLC are not associated entities. Johnson Wealth & Income Management is a franchisee of the Retirement Income Store. The Retirement Income Store and Sound Income Strategies LLC are associated entities. \u00a9 2021 Sound Income Strategies.<\/p>\n","protected":false},"excerpt":{"rendered":" Have you experienced a sudden windfall? We\u2019re here to help you navigate the complexities of sudden wealth. Ultimately, you\u2019ll want to rely on a team of professionals to help advise you. There\u2019s gradual money and there\u2019s money that comes suddenly. Most of us are used to gradual money\u2014earning an income and building a nest egg […]<\/p>\n","protected":false},"author":1,"featured_media":12100,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"default","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[37],"tags":[56,55,148,150,73,28,38,155,157,45],"yoast_head":"\nWhere does sudden wealth come from?<\/h4>\n\n\n\n
1. Build your sudden wealth financial team<\/h4>\n\n\n\n
2. Create a sudden wealth wish list<\/h4>\n\n\n\n
3. Determine what is possible after receiving sudden wealth<\/h4>\n\n\n\n
4. Monitor your spending<\/h4>\n\n\n\n
Last Thoughts<\/h4>\n\n\n\n
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