The immediate reaction to people who experience a sudden influx of money is to want to have fun. The re-evaluation of goals comes later, said Susan Bradley, financial advisor, author and founder of the Sudden Money Institute.
When people suddenly find themselves with a lot of unexpected wealth, Bradley said, “the first reactions are they want to do something with their homes, they want to help family with things like education and they want to travel.”
Bradley was reacting to a recent survey by BMO Wealth Management in Chicago, in which the top response by 53 percent of the 1,000 people surveyed was that they would like to help family members and others with their newfound fortune.
“I worked with one client who kept the newfound wealth to himself, but then anonymously gave $50,000 to a teacher in need,” Bradley said. “So, yes, it does happen. People use the money to help others.”
In the BMO survey, helping others was followed by paying off debts (named as a response to sudden money by 51 percent of those polled), investing in the stock market or buying a business or property (named by 49 percent), buying big-ticket items (named by 22 percent) and splurging and spending freely (named by 18 percent). Forty-three percent, however, said they wouldn’t change their financial goals.
Still, Bradley said she has seen other surveys about sudden wealth where investing came in much further down the scale. “That’s disappointing,” she noted. “But that is an initial reaction that could change after a few weeks.”
Bradley has been a speaker at the Invest in Women annual conference in the past, and she will present a workshop on financially managing transitions between the Invest in Women and the Inside Retirement conferences sponsored by Financial Advisor and Private Wealth magazines on May 1 in Atlanta (http://conferences.fa-mag.com/retirement/2019-agenda/).
Bradley founded the Sudden Money Institute 17 years ago to help the financial community better serve their clients by developing processes and tools to address the personal side of money, especially for those clients going through transitions. The think tank created the “Certified Financial Transitionist” designation.