Sudden wealth syndrome occurs when someone receives a large sum of money or an inheritance and reacts in ways that are unexpected or damaging. It is not just about the financial concern. It’s also about the psychological adjustment to sudden or drastic changes to lifestyle and relationships.
Feeling Overwhelmed from Sudden Wealth Syndrome.
Persons who have recently acquired wealth may experience a sense of being overwhelmed or confused as they attempt to manage, invest and use their newfound riches. Many people find it difficult to begin managing money without receiving any kind of guidance from a financial advisor or mentor.
Here’s my personal story. I inherited $14 million in 2010 and I didn’t know who to trust. At the time, I was an estate planning attorney at the time. I knew LOTS of financial advisors. But I didn’t know who to trust. So I ended up trusting the wrong people. In my situation, I trusted con artists promoting private equity deals that all went bust.
The influx of money can be both exciting and scary at the same time. It is critical for individuals to recognize the signs of feeling overwhelmed. Then seek assistance from people who can help you. I personally suggest reaching out to people with personal experience with sudden wealth syndrome, or at least people who have specialized training in the area.
Sudden Wealth Syndrome Causes Difficulty in Making Decisions.
For those who are unfamiliar with handling money, it can be difficult to make decisions when faced with an influx of sudden wealth. With no prior experience in managing finances, individuals may feel uncertain about their ability to make the right choices for their long-term financial success. This feeling of uncertainty may further lead to paralysis when it comes time to make important decisions with the newfound wealth. To combat this feeling, focus on developing a financial plan that takes into account short-term and long-term goals. With such a roadmap in hand, individuals can be more confident when making decisions regarding how best use their resources.
Spending and Risk-Taking Impulses Out of Control.
A recurring symptom of sudden wealth syndrome is an impulse to spend money and take risks that are out of character for the individual. This reaction can come from a sense of overconfidence in their financial state.
For me personally, when I knew I had $14 million in a trading account, I would go on walks around the neighborhood and imagine how many blocks of houses I could buy. I bought random company stocks thinking I was investing the money. (Of course, that’s a stupid way to invest.)
Put briefly, I made poor choices and took risks that turned out to be costly in the future. To avoid these impulses, it’s important that you approach new financial decisions with a level head. Create rules for the amount you are willing to spend and how much risk you are willing to take in order to reach your goals.
Negative Reactions From Friends and Family Members.
One of the most common symptoms of sudden wealth syndrome is a negative reaction from friends and family members. Their attitudes can range from envy or judgmental attitudes to outright trolling and insults. It’s important to be aware of these sentiments towards your financial state. I suggest that you try not to react and further damage any relationships. This symptom can also be a source of stress for those with sudden wealth syndrome. That’s because it could lead to feelings of guilt or hurt over the fact that even loved ones are not supportive of their change in fortune.
Feelings of Isolation or insecurity.
Many people who experience sudden wealth syndrome may feel isolated or insecure when it comes to their new affluence. Old friends may no longer relate to them. And they could find it hard to connect with people who don’t come from the same kind of financial background. This feeling of isolation can be compounded by a lack of trust in new relationships as well, leading someone to feel like they have nobody they can turn to without being judged or envied for their newfound wealth.
Let Us Help You With Your Sudden Wealth Syndrome.
Paul Deloughery here. I’ve been where you are. Most people haven’t. I want to help because I know how chaotic and alone it can feel. Please call 602-443-4888 and ask to talk to me personally.
I created Sudden Wealth Protection Law specifically because I saw a need to help people with this. I promise that I’m not out to take advantage of you. (I know from personal experience that that is a a fear of yours.) I just want to help in any way I can.