Imagine waking up and realizing that in your pocket you hold the key to a massive windfall — a winning lottery ticket. This is exactly what happened when Reddit user, OpulentWords, and her partner realized that they’d won more than USD$20 million. As U/OpulentWords explained it: “It was a life-changing amount of money.”
Rather than blow their windfall lottery winnings on big cars and fancy trips, the couple chose to be responsible. They invested money in cash-positive rental properties, set up a high-interest savings account — for living expenses — and set up accounts that would preserve the principal sum for future generations.
But that wasn’t it. In a show of generosity, the couple generously gave USD$2 million to the sister and mother (of one spouse) and set aside USD$1 million for friends.
Despite this generosity, the lucky couple was critiicizsed, particularly by their sister and mother. Their family’s argument was that they weren’t generous enough and that they should’ve been less stingy, particularly when it came to paying for a family beach house.
What’s worse is that extended family began to overwhelm the couple with financial requests and, as a result, put massive strain on the overall family dynamic.
“My sister and mom think we’re being selfish for not giving them more money," explained U/OpulentWords. "My family is neither poor or rich [sic] and for the most part, [they] have good to great jobs. My sister is a VP in her deparment for a well known tech company. My mom has a retirement savings beyond the money I’ve given her." U/OpulentWords continued by saying that money is set aside so she and her partner can provide for a future family, but currently, she wants to stop feeling like a bank machine for her family.
"I don’t want to keep feeling like I’m the family’s ATM machine," explained U/OpulentWords, "I’ve heard them say I am stingy and this is extremely hurtful."
Tactics to help you handle an inheritance or financial windfall
The question, of course, is whether or not a person should disclose a major inheritance or financial windfall, like a lottery win. And people had opinions.
In general, Reddit posters had four key takeaways:
- Generosity doesn’t obligate continued giving — boundaries are essential.
- Transparency laws around lottery winners can exacerbate personal challenges.
- Financial planning and diversification are critical for safeguarding winnings.
- Building boundaries and maintaining relationships require effort and emotional resilience.
While your win may be public, your wealthy lifestyle doesn’t need to be
While the win may require you to complete some publicity requirements — such as taking a picture with a large cheque — that doesn’t mean you need to be public with how you plan to use your windfall.
According to Experian, a US-based consumer credit reporting company, stealth wealth is “the practice of keeping your accumulated assets private.”
There are several ways to achieve stealth wealth:
- Avoid conversations with friends and family about income, assets or debt as this may reveal too much about your windfall gain
- Avoid lifestyle creep — like suddenly upgrading your old Toyota Camry to a fully kitted-out Dodge Challenger — because, again, this is a dead giveaway that you may have access to a lot of cash
By practising stealth wealth, you’ll have an easier time of untangling your finances from personal relationships. This makes it easier to dodge awkward situations, like friends and family hitting you up for a loan or “to invest in their startup.”
There are no obligations
While stealth wealth and tying your money up in trusts and investments are all good ways to keep money seekers at bay, it could be quite mentally draining to hide your good fortune from those closest to you.
Several Reddit users alluded to this when replying to the original post. One said it is “perfectly ok to say no” to people asking you for cash favours and that you shouldn’t have to live a lie in order to avoid awkward discussions about your windfall gain.
“People need to be ok with being genuine and honest to the people around them,” explained Reddit users. “By saying no because they want that money invested in other means provides a more accurate example of building and maintaining wealth to others than lying about it.”
Another person wrote: “I never understand this problem. What’s the issue with saying no and cutting contact with those who don’t take no for an answer and don’t respect your boundaries? If having too much (or too little) money would ruin my relationship with someone, I’d consider that a bullet dodged, since they never cared about me in the first place.”
If you’re lucky enough to land a windfall gain and you’re not sure how to structure your finances, consider talking to a professional who can help you come up with a plan and a strategy for how to breach that topic with your friends and family.
Avoid spending if debt is still an issue
While an unexpected inheritance or windfall gain can prompt a desire to go on a shopping spree, you need to heed the advice of others about focusing on your current and future financial health.
For instance, rather than setting up an investment fund, consider paying off all debt, first, and building an emergency fund. Then turn your attention to creating a secure future, such as establishing a safe and secure place to live and developing a retirement fund.
Bottom line
By following these strategies, anyone with an unexpected inheritance or windfall gain can secure their financial future, achieve their goals, and enjoy their windfall responsibly — and, hopefully, maintain their relationships with family and friends.
Sources
1. Reddit: R/OffMyChest
2. Experian: What is Stealth Wealth?
— with files from Romana King
This article Lucky lottery winner generously gave family millions — but it wasn’t enough! Now, they’re sick and tired of being used as the family ATM machine originally appeared on Money.ca
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
