The Best Thing We Saw Last Week is a weekly series bringing our readers insights and analysis from Associated's thought leaders on news across the financial planning, investment, employer sponsored retirement and group health insurance industry.
Windfall money: Inheritance. Lottery winnings. Even millions earned in a short NFL career. Money can change family dynamics – not necessarily for the good. Money can change the face of everything.
There was a fascinating article last week in CNBC that caught our eye relating to the emotions and challenges of sudden wealth.
The piece posed some interesting statistics when comparing an inheritance and sudden wealth to professional athletes.
"Consider professional athletes," the article read. "Research by the National Bureau of Economic Research in 2015 found that 15.7% of NFL players had filed for bankruptcy within 12 years of retirement, despite many of them making millions of dollars in their careers. A staggering 78% of retired football players were in serious financial distress just two years after leaving the game, according to Sports Illustrated. The statistics were only slightly better for pro basketball players."
When a windfall happens, it is probably best to keep things quiet – the fewer people who know, the better.
The first step should be to build your team of advisors. Financial advisor, CPA, attorney. Depending on the amount and how the money will be received, you need a strategy to minimize taxes.
After you know what will be left after Uncle Sam has been paid, it is time to be laser focused on what is truly important to you – what your core values are and then establish short, intermediate, and long term goals and objectives and build a plan – one that will be enduring, allow you to live well and be a blessing to others, too.