Liastine Jan B. Arboleda

10 Financial Mistakes With Sudden Wealth Having a sudden wealth can be uplifting. There can be countless thoughts that you can almost drown in them a good way. But, the overwhelming feeling of having newly found wealth can be your downfall. The urge to buy the things you want, the sense of deprivation, the overpowering excitement to show everyone that you've got more money than them. It's pretty dangerous. And in today's video, let's talk about the 10 FINANCIAL MISTAKES WITH SUDDEN WEALTH that you would need to avoid. After being a minimum-wage earner, you've probably got lots of things on your bucket list to tick off after finding a sudden wealth. Whether trivial or needs, you feel like you can have it all simply because you can afford it. And this is the unnecessary mindset you will need if you want your sudden wealth to last and secure your future. Don't get me wrong. There's nothing wrong with making mistakes. It becomes an issue, though, if you find yourself repeating the same mistakes over and over after your sudden wealth. Learning from these ten financial mistakes with sudden wealth will save you a lot of heartaches and put you in a better shape for a prosperous financial future and the right headspace. MISTAKE NUMBER 10: SPENDING MORE THAN YOUR FINANCIAL PLAN The first would be spending more than your financial plan. What do we mean by this? Although you have a sudden wealth, it is not a never-ending riches, and you can lose it all with just a snap. You can afford it but until when? You can spend all you want for as long as you go by the financial plan provided by your financial team. It may not appear like a big deal when you go shopping or buy necessities, but one thing you have forgotten is that these expenses add up. Your expenses end even if you have sudden wealth. Imagine this, spending $1000 for your shopping galore a week will cost you $52,000 a year. If you have saved your coffee break expenses $52,000, you'll have $260,000 in 5 years. MISTAKE NUMBER 9: LACK OF PERSPECTIVE After having a sudden wealth, having the right headspace is necessary throughout the first few months. Once your family and friends find out that you have huge riches, the unrealistic expectations and responsibilities will make you carry all the burden. Why? Because you have the wealth, they don't have. Things will be different. You and your perspective will change as you see the sudden wealth as a curse instead of a blessing. As the demands of the people surrounding you grow, you will feel that your newly found wealth is bringing you down. With this, your decision-making will also be affected. Countless people felt dragged and obligated to give their relatives or friends a piece of the sudden wealth, making them lose the sense of right and wrong as they lose perspective. MISTAKE NUMBER 8: HOLDING OFF ANYTHING REGARDING FINANCES This is one of the most common mistakes of people with or without sudden wealth. Most people get complacent and somehow gets pretty lazy in terms of getting deeply involved with their finance. With this attitude, you run the risk of missing out on certain wealth management chances and opportunities or making life more complicated for yourself in the future years. Holding off your financial responsibilities simply results in a growing to-do list. When it gets to time-sensitive tasks such as financial planning or debt repayment, taking the more comprehensive approach may cost you significant money over the long term. MISTAKE NUMBER 7: OUTDATED FINANCIAL PLANS AND INVESTMENTS Right after having your sudden wealth, it is critical to assess the financial plans and strategies in order to protect your assets. Estate plans, insurance plans, as well as retirement plans are almost always subject to revision and renewal. Your financial team can handle this, but it is in your best interest to get involved. While updating your financial plans and investments, you can benefit from this in the future. MISTAKE NUMBER 6: LACK OF ALLOCATION FOR EMERGENCY FUND You will be surprised when you hear that almost all individuals with sudden wealth lack allocation for emergency funds. Yes, you've heard it right. Most of these people actually don't want to spend their riches on health and life insurance, thinking they do not need it and can cover the expenses. Since they are not prepared for these kinds of emergencies, they will be spending more money than they are supposed to with insurance. MISTAKE NUMBER 5: EMOTIONAL DECISIONS Regardless of how you have obtained your sudden wealth, you should never ever make any decisions while you are emotional that will make you regret them right after. One of the perfect examples is after you had your sudden wealth. The most ideal response would be to absolutely do nothing and take a deep breath, take your time and let the news sink into you. By taking a few minutes to get awareness, you will be better able to determine your objectives and develop a strategy for achieving them. Determining what options you must undertake in the short term is essential. This includes tax management and estate settlement and what choices you can postpone, such as determining how to optimize the influence of your sudden wealth. MISTAKE NUMBER 4: LETTING SUDDEN WEALTH CONTROL YOU Although we do not know how and when we will have sudden wealth, it can be from inheritance or a lottery, and it is best to be ready. Once you've heard the news create your financial team. Why? So you won't get to the point where your sudden wealth controls you. How so? If you can't even make a simple decision after having your sudden wealth, that's when your riches control you. Not being able to make any decisions at all can be your downfall. But, if, in any case, your sudden wealth gets into you, seek professional help such as a financial counselor with extensive experience assisting clients through sudden wealth transitions. MISTAKE NUMBER 3: NOT BEING TRANSPARENT When people have sudden wealth, they may become more secretive about their financial situation. Some people are uneasy with their newfound riches, while others seem separated from their old colleagues, and others still are suspicious of individuals who seek assistance from them. This kind of impulse can somehow become your financial team's concern. If you keep your financial team in the dark, they cannot help you retain your sudden wealth. Not to mention that this kind of situation take a toll on your mental health. Remember that it is vital that you keep your financial team informed about everything and have them understand the bigger picture during your sudden wealth transition. Your team will act as your protection, so do not hesitate to make them up to date. MISTAKE NUMBER 2: LACK OF INVESTMENTS OR OVER-INVESTING The widespread mistake of sudden wealth is the lack of investment or over-investing. This will be a pain in the gut if you continue doing this. How do you expect your sudden wealth to grow without doing anything? Because of your investments, you will be able to become financially independent and not rely on your sudden wealth when faced with financial difficulty. In other words, it assures that you do have sufficient savings to finance your needs and even the trivial things in the long run without worrying that you might spend all your sudden wealth. If you are unsure of what to invest in, do some digging and ask your financial team's opinion. With this, you can weigh your options and what to consider if you are looking for something to invest in. Investing is one of the easiest ways to grow your portfolio and profit, but overdoing it can take a toll on your riches. One way of losing your sudden wealth quickly is gambling it on unsure investments. Avoid complex investments, especially those you do not know to understand or those too good to be true investments. If you really can't help it, hire a professional that can guide you in investing and can help you understand the in and out of investments. MISTAKE NUMBER 1: QUITTING DAY JOB Quitting your day job because of your sudden wealth is a big no-no. You cannot rely on your sudden wealth alone. It is best to keep your job as you'll get to have another source of income and have your sudden wealth allocated for investments and business. Working an 8-hour shift is indeed tiring and almost dull. You'd think that hitting a sudden wealth overnight might be the ideal path to financial independence. If you didn't have to worry about money, the world would indeed be your oyster. Maybe you'd advocate for a good cause or pursue a sporting interest, but what about your job? Certainly not. However, it is more typical than you might expect for people to maintain decent jobs following a sudden wealth. As a result, some high-profile entrepreneurs have refused to retire, although having the financial means to do so, including many of the world's most influential business leaders, such as Amazon's Jeff Bezo. Let's not forget the Facebook's Mark Zuckerberg, who is still working today. To steer clear of these mistakes, begin with keeping track of your riches and expenditures. Take your time and consider every scenario before making any decisions. It would be best if you also manage your time and priorities to keep your sudden wealth. Make sure to create your financial plan and commit to doing them. And that is all for today's video. What is the most crucial mistake that can jeopardize your sudden wealth and future?