Windfall Worries

Does getting rich scare you?

financial plan, financial planning, budgeting for windfall,
Feeling burdened by a sudden windfall?

Most of us dream of a sudden flush of cash. A windfall that would erase all fear of dying broke and alone. But for the lucky few who actually have this experience, the actuality of becoming wealthy is far from exhilarating.


A few weeks ago I discussed this with a journalist from the Wall Street Journal. Whether it's real estate, a surprise inheritance, bitcoin or an employer's IPO, the sudden profit comes with a new level of responsibility.


The taxes will come due...I recommend you set aside 30-50% of your profit in a high-yield savings or short-term inflation protected security ETF until you know your exact tax liability. Next, what are your short-term and long-term plans and how will this newfound wealth help you reach these goals?

  • Pay off existing debt - all of it. There's no reason to pay interest to a creditor.

  • Maintain your emergency fund - 3 to 6 months expenses.

  • Invest for long-term goals such as retirement, education, housing. If you don't know how much you need for retirement, college savings or a home - come see me and I'll help you sort that out.

  • Invest for short-term goals...maybe this is the downpayment on a condo or a charitable gift that will impact an organization who's values you embrace or a new car to replace the old college junker. I can walk you through this as well.

  • Have a little fun...carve out 3-5% to go on a fantastic vacation or get your family a fun gift or buy that rare pair of Nikes. Whatever it is, allow yourself the freedom enjoy a bit of this newfound wealth!

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