Getting rich quick is a big part of the American dream but it is not just about the money, it comes with a lot of responsibility too.
People get wealthy in various ways, like selling a business, making a smart investment, winning the lottery, getting a legal settlement, inheriting unexpected money or cashing in on stock options during big company events.
However, suddenly having a lot of money can be overwhelming and many are not ready for it.
In fact, a majority of lottery winners and inheritors end up broke within 3 to 5 years because they don’t know how to manage their new wealth.
That’s why it is important to have a plan for your money to avoid losing it as fast as you got it.
Having a strategy can help you to ensure that sudden wealth becomes a blessing, not a curse and helps with long-term financial stability.
Let’s get started.
15 Things To Do If You Get Rich Suddenly
1. Keep It Secret
First things first, keep your newfound fortune a secret.
It is tempting to broadcast your windfall, but maintaining privacy is key.
You will share the news when the time is right.
2. Clear Your Debts
Your first move should be to eliminate any debts.
This step is important as debt can significantly impact your financial health.
Pay off what you owe and avoid taking on new debts.
3. Pause and Plan
After settling your debts, take a moment to let your financial situation sink in.
Avoid making any hasty decisions with your money.
A six-month waiting period can provide clarity and prevent impulsive purchases.
4. Hold Onto Your Job
Resist the urge to quit your job immediately.
Staying employed keeps you grounded and prevents you from depleting your funds through aimless spending.
Plus, having the option to leave on your terms can shift your perspective on work.
5. Educate Yourself on Investments
To preserve and grow your wealth, you need to become financially savvy.
Rushing into investments without understanding the basics can lead to significant losses.
Take the time to learn before you leap.
6. Stick With Proven Advisors
If your wealth comes from an inheritance, consider sticking with the financial advisor who managed your benefactor’s assets.
They have a track record of success and switching advisors could be risky.
7. Do Not Start a Business Too Quick
While the idea of starting a business is appealing, it’s fraught with risks.
The majority of new businesses fail, so it’s wise to approach entrepreneurship cautiously and seek advice from your financial advisor.
8. Get Ready For Change
Having more money means you’ll attract more attention and not always the good kind.
Be ready for increased scrutiny and potential legal or scamming challenges.
Wealth brings its own set of complex problems.
9. Use the 5% Rule
Understand that your wealth won’t last unless managed wisely.
Aim to live off the returns of your investments, ideally around 5% annually, to ensure your principal amount remains intact.
This approach can provide a sustainable income if done correctly.
10. Stay True to Your Partner
With wealth comes temptation. However, the cost of infidelity can be high, both financially and emotionally.
It is important to strengthen family bonds rather than weaken them through reckless actions.
11. Invest in Your Children’s Education
Use part of your wealth to secure your children’s educational future.
Starting early can leverage compounding interest, ensuring a solid foundation for their academic pursuits.
12. Prioritize Safety
In this fortunate position, there’s no need to take unnecessary risks.
Avoid shady investments and quick-rich schemes.
Behave as if the windfall was a solution to your financial issues and continue living a prudent life.
13. Learn Before You Leap
Educate yourself on financial management to make informed decisions about your wealth.
Consider hiring professionals, but also invest time in understanding the basics of finance to better engage with your wealth management team.
14. Focus on your Health
Your health is your true wealth.
Use your financial resources to improve your well-being through regular check-ups and a healthy lifestyle.
This ensures you enjoy your wealth for as long as possible.
15. Maintain a Modest Lifestyle
Even with your debts cleared, resist the urge to upscale your lifestyle dramatically.
Opt for a comfortable but not extravagant home to avoid the financial strain associated with high-maintenance living.
So these were some of the things you should do if you get rich suddenly.