Once I lived the life of a millionaire,
spending my money, I didn’t care
I carried my friends out for a good time,
buying bootleg liquor, champagne and wine …
by Ida Cox & B Feldman, sung by Bessie Smith
According to the NY Times, thanks to the thriftiness of depression-era parents, baby boomers are more likely to inherit great sums of money than previous generations. Some know to expect it, others do not. What would you do if you suddenly found yourself to be wealthy?
Some boomers donate the funds to a cause their parents would have liked. (And some donate to a cause their parents would have hated!) Others save their portfolios to make sure they can provide for their own children. Or provide for relatives who have helped them in the past. Some just squander it.
It is important to realize that gaining sudden wealth is a stressful event. Although it may be pleasant, it involves a life change. Suddenly there are new possibilities. And yet, what may seem like a lot of money when it is given as a lump sum, once you stretch it out over time, it is actually not so much. There are important choices to make – do you live off of the interest or spend the principal? Do you invest it the way your parents did? What are your priorities?
There is an emotional component – this money is not earned, so some people may think they don’t deserve it. Some may be elated that a windfall finally fell their way. Some feel entitled.
And then there is a social component, because, while we may not want to admit it, we live in a stratified society, and tend to feel most comfortable with people in the same economic bracket. Are we now catapulted into some other social circle? Are old acquaintances now coming out of the woodwork to be your best friend?
While coming into sudden wealth is the stuff dreams are made of, be careful! Be thoughtful. Be quiet! Get advice. Be smart. Remember, this is a life transition, as significant as grieving or divorce. So this is the time to be good to yourself ~~ whatever that means!