I am 56 years old, never married, no kids. I’ve spent my entire career as a middle-school science teacher. I love my work and the students. I have lived within my means, paid off my condo early and created a comfortable savings account in addition to my teacher’s pension. I enjoy a vacation with my girlfriends about once a year, and I love spending time and money visiting my cousins’ children — all of whom are college-age and older — and treating them to holiday and birthday gifts. I also give generously to my church, where I am active.
I come from a long line of teachers, and the family attitude about money was to live modestly, pursue a career you enjoy, and focus on family, friends and community. I was absolutely shocked when my father passed away after a long illness and left me more than $5 million (I am an only child). No one in my family could believe it — but apparently he’d been investing consistently for more than 60 years, and barely spent a dime on anything but the necessities. I am the sole beneficiary of his estate.
I learned about this money about four months ago, and the estate will be settled later this year. I am paralyzed with an incredible assortment of emotions. I find myself fantasizing about expensive shoes and luxury resort vacations. I think of how much my young cousins are struggling to afford college, weddings and their homes — I could just buy all of those things for them! I dream about buying a vacation property someplace warm, and upgrading from my condo to a historic home — even though I never ever thought about these things before!
But I'm so afraid of what will happen when I get that check. People have started treating me differently — there is some hard-to-put-my-finger-on-it change in my relationship with my family. Word about my new wealth got out to my colleagues, and they say things like, “Oh, I’d love to renovate my kitchen, but have to replace the roof instead — but you don’t have to worry about decisions like that any more!” I feel like my whole world has been turned upside down and I haven’t even touched the money yet.
Where should I spend my newfound wealth? Where should I invest it? Can I just give it all away to people who need it more than I do?
Overwhelmed in Ohio
Your situation is not an easy one. Not only do you face a gigantic life change — one potentially rife with stressors and unwelcome consequence — few around you appreciate that your windfall is not 100 percent newfound bliss. They think you have it made in the shade — but you know that the only shade you’re experiencing is cast by the $5 million anvil plummeting towards your head as you mosey down the sidewalk.
There is an entire sub-specialty in the financial advising industry focused on “sudden wealth” and helping the recipients of such large lumps of money manage it in a way that does not destroy their lives. These experts will recount story after story of lotto winners, pro athletes and heirs contending with addictive behaviors, shattered relationships and out-of-control spending.
Money, as they say, changes everything — and you are getting a lot of money. Your new wealth stands to drive a wedge between you and everyone you know. Perhaps most dramatic of all is that this change is happening overnight. Your father did not give you the benefit of informing you of his estate ahead of time, and robbed you of the chance to warm up to the idea and plan a little. You’ve been bitch-slapped by a goldmine.
It sounds like you have a great community of friends, family, colleagues and churchgoers around you. You must find ways to protect these relationships, for money stands to strain them. It also sounds like you have a lovely life now. You need to find ways to use this money to make it even better. But it will be tricky and it will take a lot of time and deep soul searching. A few practical matters to consider:
1. Do nothing for six months. Live, work and spend as you always have. If people ask what your plans are, smile and say: “I’m not sure yet — I’m seeking professional advice.”
2. Get professional advice. Having an accountant and lawyer, and a financial advisor who specializes in sudden wealth, is key to managing this project. This is not for amateurs.
3. As you pass your days and weeks, think critically about what gives you joy. You mentioned helping your cousins, and giving at your church. You enjoy your work and travel. Write down these positive things in your life, and let this list steer you through your upcoming decisions.
You are fortunate in that you are beginning this journey with a strong foundation of priorities and work ethic — not to mention financial stability. There is a reason the majority of lottery winners go bankrupt within a few years of their windfalls.
4. Work with your financial advisor to formulate a list of things you’d like to spend money on — upgrades to your home, or a certain vacation you’ve always dreamed of.
5. Make a will — and share your wishes with your heirs. Protect them from the paralyzing shock that plagues you.