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Unexpected Wealth Management

Unexpected Wealth can accelerate a lot of things – but it is never without a major life transition and an uncomfortable disruption to life

While we all have daydreams of, winning big at the Lotto, being an unexpected heir to a fortune left to us by an eccentric aunt we never knew, or other wealth fantasies, when it comes to actually having to start the process of actively managing an unexpected wealth event – and an unexpected life transition – the sudden realisation of new skills needed and lacking connection to people who are experienced with this part of life, can feel overwhelming — and even frightening and incredibly isolating.

It doesn't have to be this way.

Every new beginning in life also brings with it first, an ending.

  • For some, this could be receiving a Termination Payout from a job held for over 20 years. The financial payout while helpful also brings with it the loss of a job, usually an identity and a support structure of known people and personalities, that helped define what 'normal life was for the past 20 years.
  • People who receive Third-party Insurance payouts after a motor vehicle accident often report feeling lost, out of sync, and financially vulnerable to a barrage of 'new friends, well-wishes, and distant relatives' all seeking free money, investments in 'good ideas' and even significant charity giving.
  • People who receive a substantial Life insurance payout after a loved one passes away or a business partner dies.
For those people who win big at Lotto and lotteries, their lives are regularly never the same again, but not in a good way. —Drew Browne, Sapience Financial

It doesn't have to be, with the right support.

Unexpected change creates new possibilities but also brings with it endings to be managed, sometimes grieved over and always requiring learning new skills and support.

Unexpected Wealth and Unexpected Money

What amounts to 'wealth' is always relative to the individual and their circumstances.

  • Becoming suddenly wealthy can cause people to make decisions they might not have otherwise made.
  • Becoming unexpectantly significantly better off, can have an equally paralysing effect because such changes are both unexpected and can appear confronting on many levels.

As a financial advisor, I have seen people freeze into inaction upon receiving a $100,000 insurance payout, while other clients have received fifty times more and still turned up for work for the next 12 months – telling nobody (even their advisor) about their 'financial change'. Still, others referred to us for support complaining an inherited waterfront mansion is costing them a fortune to maintain in council rates and land taxes – while declaring, 'but can't be rented out because that would dishonor the memory of its original owner'.

When it comes to what amounts to 'unexpected', we find the deliberately planned transfers of wealth between generations that are structured with ongoing conversations and learned new skills, both financial and emotional, don't have the same often surprising damaging effects, that unexpected money can bring with it.

Unexpected Wealth Syndrome symptoms can include feeling isolated from former friends, feeling guilty about their good fortune, and extreme fear of losing their money, if not managed, can overshadow the opportunity to successfully move to the next phase of your financial life.

Sudden or Unexpected Wealth needs a process to help its recipients successfully integrate the new wealth and its accompanying new emotions into their new life.

Sure, life in the fast lane can be exhilarating, but only if you are experienced with and have the right vehicle to use.

Unexpected Wealth, if not acknowledged, will usually reveal more of who a person already is, and their (usually lack of) familiarity with larger money matters. So if you need new skills you need a plan to learn and practice them, while being supported by professionals who can gently guide you into the next level of your financial life.

Problems we have seen unexpected wealth bring

Unexpected Wealth can bring with it many complex emotions and financial consequences – that can leave its recipients often feeling overwhelmed and unsupported. Unexpected Wealth can inadvertently amplify a person's preparedness or unpreparedness.

  • Many people become aware of their low level of basic financial literacy and let embarrassment stop them from seeking professional guidance.
  • Many become depressed and suffer reduced mental health.
  • Many are forced to more carefully consider for the first time, their family and friendship circle, and whether people care about them for who they are or the wealth they suddenly have.
  • Unexpected wealth and privilege have their own set of psychological consequences to be managed.

What do people do with Unexpected Wealth?

Many people are uncomfortable about the abrupt change in their personal wealth situation, compared to family or friends around them. As a result they:

  • give it away – to avoid feeling criticism
  • spend it away – to avoid thinking about it
  • hide it away – to avoid having to learn how to work with it feel ashamed of it, and find the experience strangely isolating.

Many feel controlled by it, that they must preserve the ‘level of wealth/asset inherited at all costs, even to their own detriment.

Others show it off with grandiose abandon and surround themselves with an entourage of sycophants to distract them from dealing with its reality, perhaps responsibility, definitely the opportunity – and go on to live smaller lives of diminished meaning.

How we can help

Helping people manage their unexpected wealth is an important part of supporting them to learn new larger money skills combined with new personal skills and outlooks, to manage the emotional side that unexpected wealth inevitably brings.

Supporting someone emotionally and financially through such a significant life transition is a hand-crafted consultative service from Sapience Financial. We can take a project management approach to working with Financial Councillors, Therapists, Solicitors, and Investment Managers, to help make the transition from one level of life to another successfully, and preserve your opportunity to do good with your new life, rather than regret the access to unrestrained and missed opportunities.

Contact us for a confidential chat about your needs.

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