Making sense of sudden wealth
6 conversation cues for reflecting on a major change in your financial status.
"Sudden wealth" is an odd turn of phrase to describe a life moment.
It's almost like you are surprised by it.
And in some instances, you may be surprised by the event itself or by the magnitude of the wealth.
Or the "sudden" part could just be the realization that it finally happened-a point-in-time payout you were hoping for from your hard work or intentional investing.
There are many forms of sudden wealth: a liquidity event from selling a business, an inheritance from a parent or grandparent, reaching the age when you start receiving money from an account or trust, cashing out when the price of shares you own takes off, or marrying someone who has significant wealth.
Whatever the source, sudden wealth is a moment when your financial status changes.
Whatever the source, sudden wealth is a moment when your financial status changes.
The impact may include a new lifestyle, a more secure retirement, or a transformative opportunity to build wealth for future generations.
And it can generate a range of emotions.
You might feel elated, inspired, and motivated ...
or overwhelmed, disoriented, and fearful.
It's likely you will experience different emotions at different times.
The bottom line is that this is a new reality for you.
To some extent, you need to sort out who you are-and who you want to be-with this newfound wealth.
Conversation cues can help you "rewire" your financial and family system The mindset for navigating your new reality is this: "I am intentionally rewiring my financial and family system." Your life and family have been wired around one reality and now that reality has changed.
You need to rethink how you will navigate a whole new range of financial choices and decisions-and realign around how you will navigate the new financial realities in your relationships and family.
Your life and family have been wired around one reality and now that reality has changed.
Here's how you can use the six conversation cues to guide your experience and dialogue around this sudden wealth rewiring.
(To learn more, read Conversation cues can bring your family together .) 1.
A sudden wealth event can spark reflection on some of our most intimate wishes and fears.
Cue: Wish-Fear-Seek the wish behind a fear.
Scenario: A married father of three, Thomas is an executive in his late 30s.
When his parents sold their business to a private equity firm, they gave Thomas and his family a $5 million gift, with the intention to give more.
Rewiring questions: What fears does this gift raise for you?
What are the wishes behind those fears?
What are your wishes for your family's future?
How can you use this event to talk about your wishes and fears?
How does this money change your wishes?
What new fears does it introduce?
How comfortable are you talking about wishes and fears?
Where do you need to seek other voices?
A sudden wealth event can create confusion about how to discuss it in your relationships and family.
Cue: Voice-Vote-Impacted people should have a voice and maybe a vote.
Scenario: Last year, Palmer proposed to his longtime girlfriend, Jess.
Palmer grew up the child of schoolteachers, while Jess is from a family with generational wealth.
After the engagement, Jess' family sought a prenuptial agreement with Palmer's.
Rewiring questions: Where would you expect to have a voice in this decision?
Where would you like to have a vote?
How will these conversations and decisions impact your relationships and family through time?
How will you decide who has a voice and vote as you navigate life?
How comfortable are you inviting people to have voice and vote on your decisions?
How comfortable are you inviting people to have voice and vote on your decisions?
What should you be talking about today?
A sudden wealth event can prompt us to think about our current situation in tension with our future-state planning.
Cue: Today-Someday-Assess decisions through a "today" and "someday" lens.
Scenario: Alejandra is 32 years old and single.
Since leaving grad school, she has been a researcher at a biotech company in Silicon Valley.
From day one, she has received a significant portion of her compensation in company stock.
Recently, the firm went public, and her shares became valued at $17.5 million.
Rewiring questions: What opportunities does this money create for you today?
How does this money change the way you think about your "someday" future?
What conversations could you have today as you think about planning for someday?
How comfortable are you holding your "today" needs and interests in tension with your "someday" future?
How can you create transparency?
A sudden wealth event can raise questions about how and when to talk about wealth and planning.
Cue: Transparency-Disclosure-Give people the information they need to make sense of their lives.
Scenario: Three months before he turned 35, Theo's parents informed him that they had set up a trust in his name and it would begin distributions on his birthday.
As an artist who had always paid his own way in life, Theo was totally surprised by his impending wealth and wasn't sure how to think about it.
And he didn't know how to talk to his parent trustees about their role.
Rewiring questions: What information would help you make sense of your financial life and future?
How can money and wealth conversations help you develop your identity?
What would you like to know about your family's wealth and planning?
What impact might a surprise disclosure have on your relationships and family?
How comfortable are you talking about wealth and planning topics?
What information would help you make sense of your financial life and future?
A sudden wealth event can raise questions about our obligation to help family members in unequal circumstances.
Cue: Fair-Equal-Fair doesn't always mean equal.
Scenario: Josh and Cassandra are a mid-career couple who feel doubly blessed financially.
He received a significant gift from his parents, and she received a large payout from company shares she owned.
The quandary is how they should help their families.
One of Cassandra's sisters is really struggling, while their other family members are doing fine.
Rewiring questions: How do you evaluate what "fair" means?
When do you default to equal?
How do you talk about circumstances that are not equal when you want to help someone?
What are your perceptions of fairness around a decision?
How comfortable are you talking about fair and equal in your financial decision-making process?
How can you create closeness in your relationships?
A sudden wealth experience can have unintended consequences in our relationships and family.
Cue: Closeness-Distance-Every decision can create closeness or distance in relationships.
Scenario: Last year, Mona received a significant inheritance from her grandmother.
She knew she would get "something" but had no idea it would be $25 million.
She is recently married and not sure how to think about this money in relation to her husband.
She has her own views but isn't sure what Luis might think.
Rewiring questions: How can you approach wealth conversations in a way that creates closeness in your relationships?
How might your wealth create distance in your relationships?
Are there decisions you can be making that would create more closeness?
How comfortable are you asking others whether a conversation or decision is creating more closeness or distance?
How can you approach wealth conversations in a way that creates closeness in your relationships?
Reflection is the basis of all growth and change When you are faced with new wealth and life experiences, it is important that you cultivate the ability to reflect.
And it is particularly important when you are "rewiring" your financial and family system after a sudden wealth event.
Our natural tendency is to jump into decision-making mode.
In fact, the more significant or challenging the event, the more intensely we feel an urgency to make decisions.
In reality, the quality of your decisions-and the potential for positive outcomes-is more often tied to reflective processes and conversations than to quick actions.
As you embark on your planning journey around a sudden wealth event, remember that reflection is the basis for all growth and change.
The more you give yourself (and your family) time and structure for reflection, the more you can grow and change together as you move through this significant life moment.