There is nothing like the feeling of getting an unexpected sum of money. That joy is magnified when the amounts are six, seven, eight digits or more. Of course, every coin has two sides and, typically, the greater the amount you receive, the greater your stress. In fact, there is even a stress-related disorder called "Sudden Wealth Syndrome." That stress can lead the recipients to do things that ultimately threaten their good fortune and may leave them worse off than before they received the money. I think we've all heard stories about the lottery winners who went broke or the former professional athletes or entertainers who struggle to pay rent. (For more, check out Winning The Jackpot: Dream Or Financial Nightmare?)

Tutorial: The Greatest Investors

Whether you've just signed a multi-million dollar contract or won the lottery, here are some tips that will help you keep and grow your wealth responsibly.

1. Count the money.
Take the time to count the money for yourself. Sit down with your significant other and read every piece of paper associated with the windfall carefully. There will be lots of legal gobbledygook and fine print. Read through it all. Highlight areas that you don't understand. Use the Internet to research terms and entire phrases. Smart Internet marketers will have purchased many of the words and phrases you will be searching for so steer clear of the highlighted links and links that appear to be separated from the others. Don't give out your name or other identifying information of course. By doing this homework, you will be better prepared for the next step.

2. Assemble your team of professionals.
This is business. You can start your search for competent professionals in a number of places including asking friends for referrals or asking other professionals like your family accountant or tax preparer or even family members. However, you should vet all of these individuals by understanding their professional and disciplinary backgrounds; get to know something about their practice (i.e. wealth and complexity of current clients) and ask for references to similar clients or cases they have dealt with. These steps are helpful and basic, but they are not sufficient. You MUST check their background. There is no reason to leave out this important step since it is free and easy. Your state bar association can provide disciplinary information on attorneys, the
state board of accountancy can provide information on accountants, the Financial Industry Regulatory Authority (FINRA) and the Securities and Exchange Commission can provide disciplinary information on investment professionals as can your states financial and insurance regulator.

Combine this with research on the websites of their professional organization like the CFP Board for financial planners and the AICPA for CPAs where you can learn about violations of each organization's standards of conduct. Also, research their name and corporate identifier at the county clerk's website to learn about liens, foreclosures and judgments. Last but not least, an Internet search of their names and business names and names of partners can be helpful in helping you to create a picture of this person as a professional. Be sure to review engagement letters carefully and be very clear on fees. Personally, I think it is best that everyone be paid on a project or hourly rate in the initial stages when plans are being crafted. If someone tells you the work is free, be sure that it is not free and that they are getting paid some other way which they are not disclosing. (Learn more in Does Your Investment Manager Measure Up?)

3. Develop a comprehensive financial and life plan.
Many organizations talk about their ability to do this. They show nice pictures of couples walking in the sand or smiling in a hammock. It certainly sets the right tone for the conversation. Despite this, their plans may be cookie-cutter and the solutions they offer no more customized than they are for anyone else. In the end, some standardization is good. Years of research have taught us important lessons about investing for example and those lessons can yield low cost, highly efficient portfolios that meet an investor's risk tolerance and long term needs. However, it should not be forgotten that your needs come first. The factors are more than just financial measures. You will need to be clear on the amount of income you would like but also the type of life you would like and, if applied, the inheritance or charities you hope to impact. Depending on the amount of wealth, you move from sufficiency thinking to stewardship of the assets.

4. Be very careful of friends and family.
Unfortunately, your new wealth may attract new friends and estranged family members may pop out of nowhere. Athletes and lottery winners experience this frequently. In fact, it is quite common for advisors of athletes especially to put the athlete on a salary and advise the athlete to direct requests for money to the advisor.This can be a good idea and it puts some distance between you and the family member or friend. Also, depending on the amount of new wealth, you may find yourself exposed to frivolous lawsuits and threats. Safety of your person and your family as well as your wealth will become very important. (For more, check out Handling Family Looking For A Handout: It's Elemental.)

5. Don't make big expenditures until you are comfortable with the advice and comfortable with your new financial position.
This really means don't get sucked into the exaggerated scale of the situation. Take care of taxes on the gain, pay down debts, take a small vacation but don't make too many changes at once. Consult with your professional team. If the amount you have received is substantial relative to your prior situation (i.e. invested at 3% per year the annual return covers your dream standard of living and then some), take the time to consider your good fortune and your position as a steward of the wealth and thereby your responsibility to deliver to the next generation or to charity a legacy that includes money but also includes much more. (Learn more in Financial Tips From A Heavyweight Champ.)

The Bottom Line
Coming into a large amount of money might seem like a great excuse to kick back and live the easy life, but with more money can come more problems. Be sure to use this advice when deciding what to do with your new founds wealth.

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