Sudden Wealth from a Life Event?

Posted By

Two dice proclaiming sudden wealth sitting atop a US one dollar bill.

As a financial advisor, I get more than my share of strange phone calls. Some are real doozies!

So when I picked up a recent call, I braced for impact! Some calls are really weird, other times someone is soliciting my business. This call wasn’t a question about investing either.

The caller had just experienced a Life Event.

A Life Event is a milestone that happens that can cause your life to change, as well as your financial life too. Often they result in sudden wealth. Sometimes planned, other times completely unexpected.

Here are some examples of life events that cause sudden wealth:

  • Retirement
  • Job loss or change
  • Inheritance
  • Loss of a spouse
  • Divorce
  • Sale of property
  • Sale of a business
  • Legal settlement

You may have experienced one of these life events already, and there is a high likelihood you will deal with one in the future. Oddly enough, my last two inquiries have been about life events. First a sale of property and the second from a legal settlement.

As a financial advisor, I worked with dozens of clients that have experienced these events, and it’s always been one of my specialties. So I thought each of these life events would make a great article in a series. So watch for the first in the series coming soon!

First, I want to talk about three of the common things that you will experience with your sudden wealth.

1. It’s usually a significant sum. In every case, this will be a very large sum of money. It may be the largest sum of money you will come into in your life. So your decisions about what to do next are  critical. Sudden wealth creates new opportunities, new financial goals and a completely different mindset.

2. You’ll have lots and lots of questions. There will be more questions about money that you have ever had. Sometimes each question brings up more questions. This is where financial planning might come in handy. In times where you have a lot of decisions to make, planning makes sense. Here’s a few questions that will pop up:

Where should I invest? 

Who should I hire as my financial advisor? 

How do I invest and wisely spend this much money? 

What will the taxes be like?

3. It will be stressful. When you have this much change going on in your life, it can feel like things are spinning out of control. I assure you, they are not. Most of the life events I mentioned will come with different emotions and types of stress. The loss of a spouse will be a different set of emotions than say a planned retirement. A good financial advisor can help you get through this stressful time.

Stay tuned for my upcoming articles on each of these life events. I’ll discuss the common questions and concerns with each one. Hopefully, giving you the information you need to make some good decisions. As always, you can subscribe right here for free. I’ll have my virtual paperboy toss one in your inbox every Friday.