What if you suddenly get rich? Do you know what to do with your wealth? Although it is incredibly rare when it happens that people receive a huge influx of capital. The most common way is to inherit a fortune from a deceased relative, other ways are different forms of gambling, such as winning the lottery and the like.
This is because they have no idea what to do with money, they have never had money, they have never created wealth, and they are willing to spend it all.
This is why having a plan is so important, it can mean the difference between this money being a blessing or a curse.
Here are 15 things to do if you suddenly get rich.
1. Don’t tell anyone about it
Instinctively, you will want to share the good news with everyone you know. But do not rush to shout about it from the roofs of houses, in the face of your enemies and burn bridges with money.
You are no longer poor, so privacy is your main concern. You will tell the others when the time is right.
2. Pay all your debts
These are the first expenses you should undertake. This is actually a necessity, because duty is what destroys your life.
As soon as the money gets to your account, start paying off the accumulated debt and stop.
You will feel that money is no longer a problem and new debts can be repaid immediately. This is not true. Pay for your existing debt and don’t create a new one.
3. Don’t quit your job
Quitting your job immediately after receiving money is the first Domino in a series of events that will lead you to personal bankruptcy just a couple of years later.
We are not prepared to be unproductive. No matter how lazy you are, you need to do something.
While the satisfaction of telling your boss everything you think about him would be huge for some of us, you will realize that your feelings about the job have changed. The balance of power has shifted, because now you have the option to leave if that happens.
However, keep your day-to-day work and continue to live as you have done so far.
4. Don’t spend money for a while
As soon as the money arrives in your Bank account and you have paid your immediate debt, leave it for a while.
These financial changes have affected your entire life, but you are still the same person, eager to get everything you ever wanted.
This may sound strange, but it makes a huge difference to the impact of money on your life. Every day you will think about what to do with the money, and you will see that during these 6 months, plans will change dramatically, so you should not be impulsive in your actions.
5. Make investment in yourself a priority
You need to learn before you spend. If you want to save money, you need to start training. You haven’t created wealth because you don’t know how to make a lot of money, and that has to change.
You need to become a financially literate person who understands how money works before you start moving. Refusing to do so will make you reckless or allow people to take advantage of you.
You have the luxury of time, now start investing in yourself. The average person who inherits or wins a lot of money is not a sophisticated investor. DON’T TRY ALONE. Instead, we recommend starting with the basics.
If you are in this position right now, the best book we can recommend is Money: the master of the game by Tony Robbins. This book will teach you everything you need to know about how a normal person can accumulate wealth throughout their life, even if they don’t need a large fortune. This is one of those books that will be valuable for at least the next decade.
The second recommendation of the book will obviously be: “Rich dad, poor dad” by Robert Kiyosaki.
6. Feel comfortable, but not “richly” comfortable
Pay your home loan, but don’t move to a neighborhood of rich people. This is the most common mistake that suddenly rich people make. They buy a really expensive house that comes with additional long-term costs such as property tax, maintenance, and so on. Not only did you spend a lot of money on this, you just added a layer of permanent debt to your life.
The goal is to fix your life, not completely remake it or switch to what you think should live.
7. Don’t invest in your friends ‘ businesses or lend them money
At some point, the cat will come out of the bag, and the information will leak out. Everyone knows that you have money that you didn’t earn yourself, which means that for some reason they think they are entitled to some of it.
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They all have new businesses, new projects, new ideas, new problems that your money can solve, but that money is your safety net, and holes in it don’t make it safe.
This is why money is sometimes considered a curse, your relationship is doomed. If you give them money, they will lose it and your relationship will collapse. If you don’t give them money, they will be offended by you.
8. Don’t start a business immediately
We all had a dream of becoming a boss, telling people what to do, and we looked at other companies as, ” I could easily do it myself.”
The truth is that 9 out of 10 businesses fail. You have already exhausted your luck by getting money, first of all, luck is not what will make your enterprise successful.
Start small, talk to a financial adviser, and make all your “investment decisions” from them. It’s easy to be under the illusion of potential success when you’re just starting out. Just as this illusion will disappear, so will the money you invest in it.
9. Prepare for change
The more money you have, the more purpose you have on your back, because now people have something to take away from you. People are more likely to try to cheat you or use emotional leverage to get money out of you.
Having money creates a lot of work. You might think that life becomes easier with money, but the truth is that when some problems are solved, other, more complex problems take their place.
10. Focus on becoming healthier
You have money, it’s time to enjoy it for as long as possible. You can’t afford to be the victim of your own bad choices at this stage. Start with a full medical check-up and then start taking care of yourself.
Pay more attention to what you consume and find ways to improve your health.
11. Rule 5%
The most important thing you should think about is that the money you just received will not last forever unless you are familiar with the 5% rule.
Simply put, the money you have must be invested wisely to generate an annual income. If you only spend this profit, theoretically your money should be saved forever.
Think of this large amount of money as a money tree, as long as you take care of it, it will bear fruit every year. You can enjoy fruit, but don’t chop wood for firewood.
Assuming you got $ 5 million using the 5% rule, that’s a cool $ 250,000 a year, every year.
The problem is that when people see millions, they don’t refrain from spending within the 5% rule.
12. Contact your financial adviser
You can read a couple of books about Finance, but it doesn’t make you too smart about how to manage money properly. if you are not sure that you can make your money work for you, contact a specialist.
13. Protect your children from money
Because of money, not only will your life be turned upside down, but your children’s lives will also change.
This can be done with trust funds, where they receive a benefit from the money, without being allowed to touch the initial investment.
14. Do not change your partner
When you have money, many people will want to be near you for their own personal reasons. The temptations will be great, and the mistakes will be expensive.
How expensive? Half of your entire estate, or alimony. This money should fix and strengthen the connection between family members, not destroy it.
Unfortunately, not everyone is Mature enough to see how their actions will affect their lives and fall into easy traps.
15. Be careful
Why take the risk? You are in this incredibly fortunate position, which can bring you and your family lasting benefits if you are just careful. Do not invest your money in a questionable business, do not try to try your luck and hope to quickly double your investment. Say thank you and be careful.
It’s best to act as if this event never happened, and somehow your debts and financial problems have disappeared. Now live your life according to this rule, and you will be fine. Money will grow if you just don’t abuse it.