You’re Going to Think About the Wrong Things
The first thing you’re going to think about is how to spend the money. You’ll think about the things you might buy or daydream about new potential scenarios for your life. This is completely normal and what we’re conditioned to do. Just take a look at some of the slogans for state lotteries –
- Washington: Department of Imagination
- California: Imagine What a Buck Could Do
- Illinois: Anything’s Possible
While this might be enjoyable, you have to quickly transition out of this thought process. Your success in managing this newfound financial reality is determined by what you do during the beginning stages of the process. Take the opportunity to get clear, and focus on how you’re going to make a lasting life change rather than a fleeting purchase.
You’ve Overestimated How Much You Actually Have
Along with the propensity to fantasize about what you might spend your money on comes an overestimation as to the actual amount available to live out these dreams. Initial spending plans rarely account for taxes, fees, and other expenses. That’s why it’s so important to not act impulsively upon first receiving your windfall. Take the time to find out exactly how much you have before taking action.
Others Are Going to Get Involved
They are coming from all sides and they are persistent – friends, family, even people you barely know. They all have an opinion about what you should and should not do with your money. They’ll tell you what they would do, what they wouldn’t do, and usually have someone to whom they want to introduce you. Some will even offer to “take care” of things for you. It’s important to note that managing a financial windfall presents a unique set of circumstances in which the proper advice can be very helpful; however, I cannot stress enough that you must thoroughly vet anyone you enlist to help manage your money. Know what questions to ask and the answers you’re looking for so that you can find an appropriate fit for your specific circumstances. In dealing with others involving themselves in my own affairs, I’ve tried having a set response for people when they make their overtures. It sounded great in theory but less practical in reality. People know when you’re giving them a line and aren’t easily deterred when money is involved. I’ve found the most effective way is to be honest and tell them exactly why their plan is not part of your future.