Why Getting a Fortune Can Be a Traumatic Experience

by admin on February 8, 2012

According to experts, getting a windfall, be it money won, inherited, or earned, can be a traumatic experience, which is stressful and isolating. Such people experience trauma-like symptoms, and some of them get suspicious and paranoid. They are sleep-deprived and feel anxious or guilty. It is a prolonged change, and change is always stressful, explains founder of Sudden Money Institute and financial planner Susan Bradley (The Globe and Mail).

Dr. Stephen Goldbart, founder of the Money, Meaning & Choices Institute explains that becoming rich, unexpectedly at that, has drawbacks. Some people are unable to handle sudden wealth. It can rip families apart, ruin lives, and lead people on a path of self-destructive behavior, says Goldbart. Money doesn’t always bring fulfillment and peace, and some people lose balance. Rather than solving problems, money may bring confusion, stress, and guilt. The newly rich find that they do not have to work any longer, but newfound leisure triggers a premature midlife crisis. Some people experience insomnia, severe depression, and panic attacks while others go on maniacal type of shopping sprees or withdraw from society.

Some of the newly rich feel they do not deserve the money or are not entitled to it. Others become obsessed with multiplying their fortune or become paranoid, believing they may be exploited. It is mostly the new rich who are affected – those who believed they would spend their whole life working and wealth wasn’t part of how they grew up (National Post).

Psychologists who specialize in this subject have coined the term sudden wealth syndrome. To this, there are many paths to sudden wealth – retiring, getting an insurance settlement or divorce, signing a professional sports contract, inheriting an estate, or winning the lottery. All of these can make people experience the sudden wealth syndrome. People who suffer from it become afraid that they may lose the money all of a sudden. Rather than feeling decisive and powerful, newly rich people are unable to make up their mind on what to do with their money (Web MD). People need to have a purpose in life and in many cases, they get it through their careers. While money can open many possibilities, a large part of one’s life ends. Naturally, there is a grieving process, with people thinking of the life they had.

What to do if you experience such symptoms?  Experts recommend using the services of competent advisers and take time to figure out what to do. This helps minimize the effect of problems such as depression and loneliness while avoiding the temptation to spend the money right away (Boston.com). Tax partner at Cunningham LLP Mark Goodfield recommends that windfall recipients put their money in some type of a short-term investment instrument for 3 to 6 months, letting everyone know that they can’t invest, loan, or give it until it is due. This is a good way to give oneself some breathing space and decide what to do with the money (The Globe and Mail).

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