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Adam Oliver, CFP®
Wealth Advisor
If you are fortunate enough to receive a financial windfall, consider common pitfalls as well as the potential of your gain.
Despite sounding like a wonderful benefit to most people, the reality is that a major financial windfall can produce significant issues and challenges that could impact your emotional health, your family, your vulnerability, and your financial success.
Start by learning some of the potential pitfalls of receiving a windfall. Once you are aware of the susceptibilities and consequences, follow up with a plan that can ensure the outcome is uncomplicated, satisfying, and useful for you and your loved ones. Importantly, lean on the guidance of professional financial advisors who have experience with the complexities of wealth management and who will act in your best interest.
What is a major financial windfall?
What is classified as a major financial windfall really depends on your unique financial situation. It could be $500,000, or $5 million, or much more — one person won a $2.04 billion Powerball jackpot in November 2022.1 A major windfall is usually an unexpected amount that’s large enough to significantly change your current financial situation. This sudden wealth could come from:
Five pitfalls of sudden wealth
Preserve your newfound wealth by avoiding traps and managing challenges like the ones below.
Realizing the potential
Below are four steps for realizing the positive impact your windfall may potentially provide.
Receiving a major financial windfall can elevate your family’s level of financial security and provide you with opportunities you never thought possible. You may even be able to make your dreams come true. Recent research has concluded that sudden wealth from winning the lottery produces a sustainable increase in overall life satisfaction for many years.2 To help set yourself up for financial success and life satisfaction, avoid the pitfalls and focus on maximizing the potential lifelong benefits of your sudden wealth.
At Mercer Advisors, we want to amplify and simplify your life with integrated expertise in financial planning, investment management, tax, estate, insurance, and more, all managed by a single team.
If you are not a client of Mercer Advisors and want to know more about how to handle a major financial windfall, and how it should fit into a comprehensive wealth management plan, let’s talk.
1.“$2.04B Powerball winner bought $25M Hollywood dream home and another in his hometown,” USA Today, Aug. 4, 2023.
2.“Debunking The Myth: The Surprising Truth About Lottery Winners and Life Satisfaction,” Forbes, Aug. 29, 2023.
Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.
All expressions of opinion reflect the judgment of the author as of the date of publication and are subject to change. Some of the research and ratings shown in this presentation come from third parties that are not affiliated with Mercer Advisors. The information is believed to be accurate but is not guaranteed or warranted by Mercer Advisors. Content, research, tools and stock or option symbols are for educational and illustrative purposes only and do not imply a recommendation or solicitation to buy or sell a particular security or to engage in any particular investment strategy. For financial planning advice specific to your circumstances, talk to a qualified professional at Mercer Advisors.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER® certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.