Let’s Play with $10 Million
Here’s a game for you to play:
Imagine that you have won a $10 million lottery, something you’ve probably thought about more than once.
Once you get over the excitement of winning, you’ll have to make some practical decisions. You’ll also have to deal with a whole lot of emotional issues. If you haven’t thought about both of these, then you aren’t serious about achieving a high level of wealth.
By examining the issues that I’m going to propose here, you’ll be able to discover some of your blocks to creating wealth.
The Practical Decisions
On a practical level, ask these questions:
1. After finding out that you won, who would be the first person you would call and why?
2. You will need a financial advisor to help you make some decisions. Who will you call? If you’re planning on rapidly building wealth, it’s a good idea to start interviewing financial advisers now in order to find one you trust.
I have interviewed many financial advisors to find out how they work, with whom they work, and what kind of fees they charge. One of the advisors I spoke with had a client who had won the lottery. She said that sorting everything out was, in her words, a nightmare because of the number of decisions that had to be made quickly.
3. How much money do you really need for lifestyle expenses? In order to answer this question, you need to examine your values and determine how you want to live your life.
For example, if you have been dreaming about a big house with lots of fancy furnishings and you are seriously interested in living sustainably, those two goals might not match. Also, you might not want to take on the responsibilities of caring for a huge property.
Examine your wants and imagine them as having happened to see if they are really congruent with your values.
5.What will you do with the money you don’t need for lifestyle expenses? Will you create a foundation, give money to relatives, help friends? Will you just give it away or will you create conditions for the recipients?
4. Read this post offering advice to Mega Millions lottery winners that outlines practical steps lottery winners need to take. http://www.lotterypost.com/news/170744 (I had no idea there was this kind of site available for lottery discussions.)
The Inner Work You Need to Do
I guarantee that if you win the lottery or achieve sudden wealth, your emotional life will be turned upside down. It’s often the emotional jolt that causes so many lottery winners to burn through their winnings and find themselves right back where they started.
I’ve worked with a number of clients who either inherited $500,000 or more or whose business grew very rapidly, and they all needed help deciding how to create rational spending and investing plans. I helped them both deal with the emotions and find the right team of advisors.
Any kind of rapid income acceleration can cause disorientation and confusion because often the newfound financial position goes against your established financial identity. The question becomes, “Who am I as a wealthy person?”
Here’s another group of questions to ask:
- How will I deal with requests for money from family, friends, and strangers?
- Are my relationships with family and friends strong enough for me to trust the sincerity of their reactions?
- Am I afraid that my newfound wealth will alienate me from my peer group?
- Will I be afraid of making poor financial decisions and losing what I have gained?
- Will I authentically feel like a wealthy person or will the money just cover up ingrained less-than feelings?
- What can I do to allow myself to feel wealthy before the money comes?
- What scares me about rapid wealth creation?
Here’s the bottom line: Are you ready emotionally and practically to handle wealth?