Sudden money can be exciting, but many people who receive windfalls end up squandering them. Retaining and protecting wealth is a skill set many haven’t learned yet, and inexperienced wealth builders ar🍬e at risk of making big mistakes with large sums of money.

However, with a few key mindset shifts, updated practices, and the support of a trusted financial advisor, clients can learn how to manage wealth responsibly and use that money to change🌠 ꦦtheir lives.

We’re in the midst of a massive wealth transfer between generations, with women alone poised to inherit $30 trillion by 20𝄹30. 

Yet most people are missing one key to 澳洲幸运5官方开奖结果体彩网:managing an inheritance orꦬ windfall without regret: financial wisdom on stewarding and managing that money for long-term wealth. In fact, according to a 2024 survey conducted by Citizens Financial Group, 32% of respondents said they had received poor advice after coming into a large sum of money.

Most people receive conღsistent paychecks and spend their income as usual, leaving them ill-prepared to handle sudden wealth. This lack of readiness, combined with distrust in financial professionals, conflicting advice, and impulsive decisions like overspending or quitting j🍸obs, often leads to squandering newfound fortunes instead of nurturing them.

However, when clients pause to consider their goals, confront their , and work with a trusted team of advisors, they have the chance to see that their sudden inheritance or windfall has a real impact on their present and future.

What I'm Telling My Clients

1. Create a One Year "Decision-Free Zone"

This concept was first suggested by Susan Bradley, creator of the Sudden Money Institute and author of Sudden Money: Managing a Financial Windfall. I call this the “quiet period.” The gist: Don’t do anything irrevocable with th✅e money for this period–don’t spend it; don’t allocate it; don’t quit your job or sell your house.  

In the specific case of inheritances, the grief of losing a loved one can heavily influence decisions. It's important to acknowledge this emotional weight.  Emotionally grieving before you make decisions with the money will lead to sounder decisions in the long run.

2. Interview and Gather Your Team of Advisors

During your quiet period, take the time to begin or further your education about finance and 💎investing and interview an✤d hire a team of advisors. 

💟 A good advisory team typically includes a tax preparer (particu💜larly when real estate is involved), a financial advisor, and an estate planning attorney.

3. Understand Your Money Possibilities

$500,000 may seem like a huge windfal🍎l, but there aren’t many places in the U.S. w🍷here you can retire on that amount. 

The biggest mistake pꦰeople make is that they get so excited about having the money and are 𝄹inclined to spend it immediately.

Yet if you were to invest that half million dollars in a globally diversified, low-cost investment portfolio that grows at, let’s say, 8% after its first year invested, you’d have $540,000. 澳洲幸运5官方开奖结果体彩网:Using the Rule of 72, in just nine years, your investment could double in value. If a 35-year-old came into $500,000 and invested it at this rate, by age 62, they’d have $4 million.

The Bottom Line

♛ Ralph Waldo Emerson once said, “When you have a great fortune, it requires ten times as much s💫kill to keep it.” 

Those receiving inheritances often lack that skill—at least initially. By educating themselves and assembling a team of trusted advisors, our clients can learn to understand the opportunities their wealth brings and develop a plan to make those o🎐pportunities a reality.

All investing involves risk, including the potential loss of principal. There is no guarantee that any investment plan or strategy will be successful. Advisory services provided by Hendershott Wealth Management, LLC (“HWM”), an investment advisor registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training.

All written content in this article is for information purposes only. Opinions expressed herein are solely those of Hilary Hendershott, unless otherwise specifically cited. Material presented is believed to be from reliable sources and no representations are made by our firm as to another parties’ informational accuracy or completeness. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation.