By Daniel Scott Johnson, Senior Financial Advisor
You have no doubt read stories about people who have come into sudden wealth—only to have it ruin their lives. Whenever lottery jackpots approach record highs, newspapers and TV news shows inevitably haul out horror stories about previous winners who have either gambled away, overspent, or found some other irresponsible way to blow their new-found fortunes.
In these cautionary tales, even the suddenly wealthy who do manage to hang onto their money inevitably wind up divorced, friendless, and socially isolated, envied by their old acquaintances and belittled by those in their new upper-class social circles.
Perhaps it’s our desire for karmic retribution, for a cosmic balancing of the scales, that attracts us to such tales of irony. They’re akin to “The Monkey’s Paw curse” or countless Twilight Zone episodes made real and, like Aesop’s frustrated fox who pronounced the grapes he couldn’t reach “sour,” they tend to make us feel happier with our own mundane financial situations.
Now for some deeper context. In the 1990s, psychologist Stephen Goldbart coined a term for the mental distress some people reportedly suffer when their wish for great riches comes true. He called it “Sudden Wealth Syndrome.” The symptoms Goldbart associated with this condition include shock, guilt, isolation, uncertainty, and paranoia. As it turns out, the label struck a chord with the press and the public, and it has since become an accepted axiom that people who come into sudden wealth eventually regret it.
But is this true? Is Sudden Wealth Syndrome a real thing? Are wealthy people—especially suddenly wealthy people—really miserable?
Over the years, many academics have explored this fascinating subject, and the consensus is that, yes, Goldbart described a real syndrome. In 1993, writing in Journal of Personality and Social Psychology, T. Kasser and R.M. Ryan published an article titled A Dark Side of the American Dream: Correlates of Financial Success as a Central Life Aspiration. Their conclusion: “…values and expectations for wealth and money are negatively associated with adjustment and well-being when they are more central to an individual than other self-relevant values and expectancies.” In 2010, Jordi Quoidbach, Elizabeth W. Dunn, K.V. Petrides and Moira Mikolajczak published a related study in Psychological Science titled, Money Giveth, Money Taketh Away: The Dual Effect of Wealth on Happiness. Their research revealed that the more money people acquired, the less they were able to enjoy the things that money bought them.
And then there are the unique stresses suffered by the suddenly rich. Appearing in the October 20, 2010 issue of Medical Economics, The Stressful Side of a Sudden Windfall focuses on how people deal with sudden wealth acquired primarily through inheritance. Here, author Shirley M. Mueller, M.D. writes, “While others may view sudden wealth as a boon, adaptation to a new situation is often not easy—it can be another life stress. Lack of purpose and depression can result.”
Likewise, Eileen Gallo, M.D., in the January 2001 article The Psychological Impact of Sudden Wealth published in The Journal of Financial Planning, states, “Ninety percent of the [study] participants raising this issue viewed their wealth as the catalyst for negative relationships with siblings. Their experiences ranged in tone from somewhat annoying to extremely adverse. Participants reported sibling reactions ranging from jealousy to expectations of sharing in the wealth and a sense of being entitled to be supported.”
Now for the good news.
Even though Sudden Wealth Syndrome is real, its negative impacts can be significantly mitigated with the help of sound financial management. This is where I come in. As a seasoned financial advisor who has been quoted in Forbes, CNN, CNBC, and Forbes, it’s my job to ensure your unexpected liquidity event goes well. I specialize in helping those people lucky enough to be the recipients of sudden wealth manage their assets in ways that provide security, balance, and long-term satisfaction. Not to mention, psychological well-being.
For two decades, I have made it my life’s mission to provide the most professional, productive, and compassionate wealth management and financial planning services possible, first as an assets management specialist with Wells Fargo Advisors, then a wealth management advisor for Merrill Lynch and Morgan Stanley, and finally striking out on my own in 2020. Today, my group Windfall Advisors, a Registered Investment Advisory firm, provides advice and management services for clients nationwide.
In short, we help turn sudden windfalls into lasting legacies.
Returning to our earlier discussion, another undesirable aspect of sudden wealth can be the accompanying anxiety. It’s natural to feel overwhelmed and nervous about the future, especially after coming into so much money so unexpectedly. If this is the case for you, you need someone who understands what you’re going through. Thankfully, empathy is where I really shine with clients, going above and beyond other advisors.
My soft skills in this area come from experiencing my own ups and downs in life. As a child of divorce, for 20 years, I helped raise my brother, Joey, a special needs individual who suffered from both autism and epilepsy and had the cognitive level of a three-year-old. This experience opened my eyes to the feelings of unease and angst that can afflict those who must suddenly shoulder responsibilities for which they are not fully prepared.
If you’ve recently come into sudden wealth through an inheritance, lawsuit or insurance award, business sale, or even a lottery win, and require professional management, you first need peace of mind. This I can provide.
In fact, I am so confident in my ability to help you as a compassionate advisor I’m offering a complimentary 4-month trial. It’s my belief that you will see the value of my services based on this exploratory arrangement. Or, to put it simply, you needn’t trust my words, but you can trust in the results.
Please feel free to contact me today. Together, we can ensure your good fortune remains a positive experience.
