Experts believe that people spend about 47% of their waking hours daydreaming. These dreams can range from a wide variety of topics and scenarios. However, it’s safe to say that one of the most common daydreams is about suddenly becoming rich.
In most cases, the newfound wealth comes from winning the lottery. In others, it might be an inheritance from a distant relative, a hot streak at the casino, or making wise moves playing the stock market.
The origin of the money doesn’t matter, as it’s not the main focus of the daydream. What matters is how all of that money gets spent. Usually, it will combine a huge mansion, a luxurious vehicle, an exotic vacation, rare jewelry, and an expensive wardrobe.
These purchases won’t be made for quite some time after you suddenly become wealthy. You’ll need to take care of a ton of other things first. Unfortunately, these tasks are nowhere near as exciting and are never included in daydreams.
What Should You Do First After Suddenly Becoming Wealthy?
It’s no secret that your odds of winning the lottery are slightly higher than zero. The official odds of hitting the jackpot are one in 292.2 million for Powerball and one in 302.5 million for Mega Millions. In other words, you’re more likely to experience a plane crash, be struck by lightning, and get bitten by a shark.
The good news is that you don’t have to hit the jackpot to become rich. The even better news is that a few lotteries offer much better odds of hitting it big. Winning the lottery is very much a real thing that happens to people worldwide. It’s not an ideal retirement plan, but you could win up rich by playing.
Winning the lottery is just one example of a quick way to experience a tremendous financial windfall suddenly. Whatever the reason for your new wealth, these are a few of the things that you’ll need to take care of as soon as possible:
Take a Minute To Breathe
Suddenly becoming wealthy will change your life in ways you probably can’t imagine. Moving quickly and taking care of the steps on this list is essential. However, you don’t need to rush and should only get started after you’ve collected yourself.
Yes, there’s a lot of work to be done, but you should take the time to enjoy your newfound wealth. You’re about to enter what is likely to be the most exciting time of your life. Cherish the money and celebrate with your loved ones.
Hire a Team of Legal and Financial Experts
Being rich is often considered the cure for most of life’s problems. Unfortunately, suddenly having access to a lot of money can create much bigger problems. Taxes, in particular, have been known to wreak havoc on people that suddenly come into a large sum of money.
Depending on how you’ve come into your money, many financial strings can be attached. Selling a business can come with tons of fine print and legal responsibilities. Inheriting a large sum of money, playing the stock market shrewdly, and winning via gambling will also require several tax payments.
Getting rich by winning the lottery is one of the easiest ways to meet your tax obligations. The lottery commission will automatically withhold the taxes you owe from your winnings. Unfortunately, there will still be several more taxes that you’ll likely have to pay after you collect your money.
For these reasons, it’s best to hire a tax lawyer to help you navigate these waters. There’s nothing to gain from trying to go it alone, but there is a lot to lose if you don’t pay your taxes. Besides, you should be able to afford their services with your newfound money comfortably. The cost is well worth staying out of hot water with the IRS.
Protect Your Privacy
Suddenly becoming rich will make you the most famous person in your area. Out of nowhere, you’ll start to meet many long-lost “friends” and distant “relatives.” Most of them are probably people you’ve never seen or heard of before. A general lack of privacy is often considered the worst part of being rich.
In most cases, random strangers aren’t going to hear about your sudden wealth. Receiving a massive inheritance or doing well in the stock market won’t make the local news. You should have a pretty easy time staying anonymous from the general public.
On the other hand, winning the lottery can make it very difficult to stay anonymous. There are a few states that do their best to protect the privacy of their winners. Other states will require a lottery winner to be publicly named and provide personal information. It will largely depend on the state that you live in and how much you’ve won.
The biggest issue with protecting your privacy will likely come when the news spreads on social media. Friends, family, neighbors, exes, and people you went to high school with will quickly hear about your wealth. You can expect many DMs suggesting you meet for coffee sometime soon.
There are a few things that you can do to avoid these awkward encounters. Deleting your social media accounts (or setting them to private) can help. You might also want to change your phone number, create a new email address, and set up a P.O. box for mail.
Calculate a Spending Plan
You won’t stay wealthy long if you start squandering your money. Even if you’ve hit a record-setting jackpot, you’ll still need to be careful and stick to a budget.
You’ve probably seen dozens of stories before of celebrities, athletes, and business owners going bankrupt. The details are usually different in each case, but the one thing that seems universal is reckless spending.
Most people believe that they can easily create a budget by themselves. You are forced to learn it as a part of your everyday life. A sudden influx of wealth can severely disrupt your budgeting abilities. Would you increase your grocery budget if you suddenly had $10,000 more dollars? $100,000? $1 million?
For these reasons, it would be a good idea to seek outside assistance by hiring a financial advisor. Not only can they help create an intelligent spending plan, but they can also suggest opportunities to grow your money.
Making strategic investments can help you build on your wealth. You’ll be able to increase your spending budget and have more fun with your money.
Create a List of Important Goals
Money isn’t the cure for all life’s problems, but it can help almost everyone. The money you’ve won will give you an excellent opportunity to care for your current issues. You should take the time to write out a list of the most significant issues you or your loved ones face.
For example, it’s practically guaranteed that you’ve racked up some debt. The average member of Generation X has about $135,841 in debt. Even members of Generation Z have already started accruing debt, as they average $9,593 each.
Paying off debt isn’t as fun as going on an exotic vacation. But remember that debt can quickly compound with interest. It’s better to pay it off soon and save money in the long run.
After paying off your debt, you’ll need to rank your goals in order of importance, with the most consequential at the top. Buying a new house and car is likely to make this list as these are very important to live.
However, undergoing a medical procedure you’ve been putting off is more critical than purchasing. The fun spending will eventually come, but you should take care of the most pressing issues first.
What Is Sudden Wealth Syndrome?
Sudden wealth syndrome is an emotional distress that can affect individuals that have suddenly come into a large amount of money. Technically, it’s not an official medical or psychological diagnosis. However, it’s a common enough occurrence to become a recognized condition in the mental health community.
At first, suddenly becoming wealthy will provide intense feelings of euphoria and happiness. You’ll feel like your dreams have finally come true and your troubles are over.
Unfortunately, these feelings won’t last long, as sudden wealth brings much more trouble than you might think.
Managing a large sum of money requires knowledge and skills that take a long time to accrue. It’s not something that you can just dive into and expect to succeed easily. The feelings of ecstasy you feel after relaxing that you’re rich will soon be replaced by stress, anxiety, and panic. These intense negative emotions are the precursor of sudden wealth syndrome.
Sudden wealth syndrome can affect people and contribute to different problems. Some people go on wild spending sprees with their newfound wealth or make terrible investments. It’s estimated that roughly 70% of lottery winners lose their money within five years.
Other people might curse their wealth because it’s impacted their interpersonal relationships. Jealousy from the people in your life can quickly deteriorate the relationship. Alternatively, you might become paranoid that people only like you for your money. These are just more symptoms of sudden wealth syndrome.
It can be challenging to predict exactly how severe your sudden wealth syndrome can be. The best way to limit the severity is to follow the steps mentioned earlier. It might be a good idea to schedule meetings with a therapist if you start feeling powerful emotions.
You’ll need to learn how to process and manage these emotions effectively. Otherwise, you could wind up friendless and penniless before you know it.
Manage Your Money To Prevent More Problems
Suddenly becoming wealthy will change your life in ways that you never imagined. Unfortunately, there’s no guarantee that these changes will be positive ones.
Following the tips listed above is an excellent way to avoid some of the worst outcomes. Ultimately, it’s up to you to determine whether your sudden wealth becomes a dream or a nightmare.
For a more user-friendly experience with less of the risk of traditional lottery games, consider Yotta.
You receive tickets based on the amount of money that you have in your account. The money will stay in your account whether you win or lose. You might not win a billion-dollar jackpot in the Yotta sweepstakes, but it’s impossible to beat a lottery with free entry.
Visit Yotta today to make your first deposit and get started.
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