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, 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.

There are countless stories about the lottery winners who went broke or the former professional athletes or entertainers who struggle to pay rent. Whether you've just signed a multimillion-dollar contract or won the lottery, here are some tips that will help you keep and grow your wealth responsibly.

Key Takeaways

  • Receiving a windfall can be a blessing but only if you keep it personal and hire a team that has your best interests in mind.
  • Family and friends can often be the biggest threat to your sudden wealth. Be careful who you trust with such information.
  • A slow-and-steady approach to stocks and investments is a proven strategy.
  • Avoid get-rich-quick schemes.
  • Diversify your wealth, and be wary of making large purchases that might tip off others to your financial situation.

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 wording 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. By doing this homework, you will be better prepared for the next step.

Assemble Your Team of Professionals

Large amounts of money should be treated as a business. You can start your search for competent professionals in a number of places, but avoid anyone with a personal connection you don't completely trust. 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 absolutely 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 names and corporate identifiers 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. If someone tells you the work is free, be sure that it is free and that they are not getting paid some other way which they are not disclosing.

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 may be 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 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 applicable, the charities you hope to impact. Depending on the amount of wealth, you move from sufficiency thinking to stewardship of the assets.

Be Wary 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 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. The safety of your person and your family, as well as your wealth, will become very important.

Resist Making Large Purchases

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 (e.g., 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.