Have You Experienced Sudden Wealth Syndrome?
by Paul Conte, Principal Advisor, Kofkin Bond & Co
With every lotto ticket or scratchie you might have bought, instant fortune must always be the first thought that enters your mind which, more often than not, ends in disappointment. But what happened if I did mean unimaginable wealth? How would life change? What car would you buy first, destination would you visit, house you would buy (or just pay off)?
In fortunate and unfortunate, a good percentage of us, if not all, are likely to receive a large sum of money or valuable assets in the form of:
- an inheritance,
- sale of a business or personal asset,
- a lottery win,
- retirement, or even
Where receiving a large, life-changing amount of money in a short period of time, psychologists have coined a term to describe this phenomenon: Sudden Wealth Syndrome.
The desire to spend what you never had, more than likely will have the hidden ability to create the added pressure of knowing that you may not be managing this sum in the most responsible manner.
Throw in those long-lost family members who never knew you before you had money, and in most cases (or at some point) the Tax Man, it’s easy to understand it can quickly become an emotional roller-coaster.
Having money doesn’t mean you will necessarily stop worrying about money. In fact, it may lead to more worrying. Why? If you hope to manage this sum responsibly, you may have to learn a lot about financial planning and investing rather quickly.
Question(s) might be:
- How much should you spend now?
- Do you clear any debts?
- How will you invest the money you won’t be spending to ensure long-term growth and capital preservation?
- The black Aston Martin or the white Aston Martin?
Everyone will have an idea on what you should do, but what’s going to be the best long-term course of action? And what should you do to make sure it’s providing any future benefactors of your new wealth with the right benefit?
Strategy isn’t thought of as synonymous with your personal life, but it can certainly help to have one.
And this is where I can help.
Paul Conte is is a Principal Planner with Kofkin Bond & Co Pty Ltd. Paul uses his expertise in wealth management and Estate Planning, to ensure clients are on track to achieve their financial goals within the most tax effective structures, whilst also considering the clients risk profiles. Paul’s diverse experience and thirst for education plays a fundamental role with new and existing clients, and has built powerful strategies that compete with many seasoned professionals in the industry to date.