Surprise! You’re Rich. Now what?

Sometimes people come into unexpected wealth through many possible sources, such as winning the lotto, selling a business they have been working on for years with little reward, or receiving an inheritance.

The first impulse of many people is to run right out and buy a Maserati or Jaguar, or perhaps a yacht or even a luxury condo. The list goes on but I’m sure you get the idea – luxury goods that we’ve probably all no doubt dreamed about at some point in our lives (they may have even spurred us on to success).

Let’s face it, who wouldn’t want their life to look like an upscale magazine? If I were rich I’d certainly go out and make myself look like I belong in GQ (Although I expect I would look a little more Johnny English than James Bond).

But with unexpected wealth comes responsibility. Responsibility to whom, you may ask?

Well responsibility to yourself, of course first and foremost, but also responsibility to your family, to society, civilisation, the earth and the future.

I’m not saying give all your money away to charity. Most of those are scams that don’t deserve your money. Don’t believe me? Read this.

I’m not saying that now you are rich the government should be allowed to take ever-increasing sums from you to fund their bureaucracy, wars and waste.

But being rich means that you are in possession of capital. Capital needs to have a useful purpose firstly if it is to be maintained, and secondly if it is going to advance your own and society’s prosperity.

Looking at your own individual needs, is conspicuous consumption really that desirable or necessary? Okay it is certainly desirable – I’m sure I would get a flashy car and home if I could afford to. But when does buying luxury goods become insanity?

Sure, you now have millions. But is it really necessary or worthwhile to go from a two-bedroom flat to a thirty six-room mansion?

It just means you will have to hire people to clean it, and maybe even people to organise your wardrobe! I don’t really like the idea of having teams of people permanently in my home. It seems bonkers.

Maybe now really is the time to get that cosmetic operation or surgical enhancement that you always wanted, but could never afford (remember I’m trying to look like a GQ cover over here). Hopefully one day we can walk into a clinic and ask for the James Bond upgrade package – along with the accompanying fighting skills and chat up lines.

My point is that when you do come into unexpected wealth it’s in our nature to splurge, but make sure you have someone on your side telling you to have a personal and comprehensive financial plan in place. Don’t be like those footballers that earn millions but go bankrupt. That’s just foolish and entirely avoidable.

Put the money aside for a while. Let the numbers and wealth truly sink in. Let your brain rule not your emotions. Get used to the wealth. If you make the right plan you will never lose it. It should be here to stay and you need to learn how to adjust.

This quote from George Bernard Shaw is highly relevant,

The surest way to ruin a man who doesn’t know how to handle money is to give him some.

If you let your brain rule you can put your capital to productive use, allowing businesses to improve their operations, fund scientific discovery and technological advancements, you may even contribute to the elusive cure for cancer!

If you invest wisely, you could be able to consume luxury goods for the rest of your life and help the lives of your family and future generations.

Just make sure you have a financial plan.

Get in touch today for a personal, independent, and comprehensive financial plan.

Mark Underdown | DipPFS IMC CeMap

Financial Planning Consultant


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