What to Do When You Come into Money

 How to handle your new fat stacks.


Well, not actually. You can’t just trust all-caps text on the internet telling you that you won a prize. Please don’t click any of that. But let’s pretend that you did come into a lot of money very quickly.

Maybe you did win the lottery. Or maybe you got a big inheritance from a relative you hadn’t seen in decades. Or perhaps you even caught a suitcase full of money that had been dropped from a passing helicopter leading to ninety minutes of hijinks as various competing factions attempted to get the case from you.

Let’s not worry about how you got it, the point is you got a lot of money very quickly. You’ve probably heard about people who came into a whole lot of money and then lost it just as quickly. You don’t want that to be you, which is why you’re here. You’ve come to the right place!

Slow down.

The first thing to do is just step back and take a deep breath. Nothing will be gained by acting hastily.

“The very first thing I would do, is to do nothing,” recommended Jacob Sensiba, financial advisor with CRG Financial Services (@CRGFS). “If you won the lottery, you’ll be in complete shock and your emotions will start to run. If you received an inheritance, you’re most likely grieving, again with your emotions running wild. Before you make any decisions, you need to let your emotions come back to a somewhat regular level, so you have a clear head.”

Seek assistance.

If there was one piece of advice that kept coming up among the experts we consulted, it’s that you should consult an expert as soon as you can.

“If you come into a lot of money, there are several steps to take,” explained Russell D. Rivera, CFA and CFP, (@Russell_Rivera), president of Voice Wealth Management. “If you hit the lottery jackpot, sign your ticket. Regardless of whether you hit the lottery or received a large inheritance, see a tax attorney and financial planner first. Discuss your priorities and things you would like to do with your life. Have them help you set up a budget so that the money you receive will last you through your lifetime. One million dollars does not go as far as some people think.”

“When we get sick we go to a doctor, when we get into legal difficulties we consult a lawyer, yet somehow many believe it is a sign of weakness to seek professional help in navigating the increasingly more perilous financial waters,” outlined Robert R. Johnson, PhD, CFA, CAIA, and professor of finance at Heider College of Business at Creighton University (@CreightonBiz). “Getting professional guidance can do wonders for one’s fiscal health. When looking for a financial professional, one should look for established, well-regarded investment credentials.  Financial professionals who have earned the prestigious Chartered Financial Analyst (CFA) or Certified Financial Professional (CFP) provide assurance that the professional is well-qualified and well-educated. Both credentials demand that individuals master a comprehensive body of knowledge and pass a rigorous exam (or in the case of the CFA, a series of exams). Both organizations demand that designation holders also adhere to a Code of Ethics that require the professional to put the client’s interest first — that is, a fiduciary standard. If a prospective financial professional is not a fiduciary, you should not engage them.”

“The next thing I would do is hire a team of experts,” suggested Sensiba. “This is especially important when winning the lottery, or if the inheritance you received was large and there are other members of your family who want in on it. It’s sad to think about, but money can immediately change a family dynamic. The three experts would be a financial advisor, an accountant, and lawyer. Vet each one. Make sure you meet with several, and pick the one you felt most comfortable with.”

Hopefully that’s enough expert advice to convince you to get some trustworthy experts of your own!

Investing and saving.

While accountants, financial advisors, and lawyers you consult with will likely have opinions about what you should do with the money, it’s good to come to them already knowing some of the responsible things you could do.

“I think the most intelligent (and logical) course of action to follow if you come into a lot of money suddenly is to divide it into different amounts for different purposes,” recommended Stephen Hart, CEO of Cardswitcher. “The largest amount should be put into a high-interest savings account, so that you can make the most of the money in the long-term.”

You may also be interested in investing. Just be sure to keep a level head.

“One of the first things a financial professional will do is to work with a client on establishing an Investment Policy Statement,” explained Johnson. “Investors should not concern themselves with broad market moves or the crisis du jour. An IPS is a written document that clearly sets out a client’s return objectives and risk tolerance over that client’s relevant time horizon, along with applicable constraints such as liquidity needs and tax circumstances. In essence, an IPS sets out the ground rules of the investment process – it is the document that guides the investment plan.”

Get out of debt.

Paying off your debts might not be a very fun way to use a portion of the windfall you’ve received, but it is a smart one.

“Depending on the amount, another option is to use the ‘Cash Windfall’ approach to payoff debt,” advised Josh Hastings, founder of Money Life Wax (@moneylifewax). “For example, in between wedding gifts and the sale of a real estate property one year, my wife and I were able to pay down $40,000 in student loans. Either way, whether you choose to pay debt or throw it in savings and create a calculated plan, it is best to take your time if you ever find yourself with a large sum of money!”

Enjoy yourself.

Once you’ve done the responsible thing by putting aside money for savings, debt, and investment, you can responsibly set aside some of the money for enjoyment.

“I actually think it’s pretty dangerous to move all of the money that you’ve acquired into a savings account straight away,” warned Hart. “Doing so raises the risk of you wanting to withdraw small amounts later on when it should be left well alone.

“I think that even the strongest-willed person in the world would struggle to keep themselves from spending a tiny portion of a huge pot of money. So, I take an ‘all things in moderation’ approach when it comes to unexpected windfalls. I take a small percentage (around 10% to 25%) of the total amount to treat myself and my family and save or invest the rest.”

We hope this advice will help you process your new windfall. Having no money is stressful. It’d be a shame to stress out over having money as well!

To learn more about how you can build your savings, check out these other posts and articles from OppLoans:

Do you have a  personal finance question you’d like us to answer? Let us know! You can find us on Facebook and Twitter.

Visit OppLoans on YouTube | Facebook | Twitter | LinkedIN | Instagram


Robert R. Johnson, PhD, CFA, CAIA is a Professor of Finance in the Heider College of Business, Creighton University (@CreightonBiz). He is also Chairman and CEO of Economic Index Associates, home to a new paradigm in Index investing. Dr. Johnson is the co-author of the books Invest With the Fed, Strategic Value Investing, Investment Banking for Dummies, and The Tools and Techniques of Investment Planning.
After working in the financial industry for several years, Stephen Hart left his role as Chief Financial Officer at WorldPay to launch the UK’s first payment processing comparison site, Cardswitcher. Nowadays, he helps SMEs save money on their payment processing costs.
Josh Hastings is a former High School Athletic Director at the secondary level who shifted his focus in 2016 to focus more effort on his entrepreneur endeavors. In 2017 he founded MoneyLifeWax.com (@moneylifewax), a personal finance site dedicated to helping millennials with student loans. With an emphasis on money and finance behavior, Josh started Money Life Wax to help millennials realize there are other ways to make money and be happy in the 21st century.
Russell Rivera, CFA, CFP(R) is President and Founder of Voice Wealth Management in New York City. He specializes in helping entrepreneurs, young professionals, and their families make better financial decisions. Learn more at www.voicewealth.com.
Jacob Sensiba is a Financial Advisor. His areas of expertise include, but are not limited to, retirement planning, budgets, and wealth management. His process entails guiding my clients through their financial journey and educating them along the way. Sensiba’s goal is to make the public more aware of their finances and to improve their level of financial literacy. Visit their website for our disclosures: CRG Financial Services(@CRGFS).


The information contained herein is provided for free and is to be used for educational and informational purposes only. We are not a credit repair organization as defined under federal or state law and we do not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit. Articles provided in connection with this blog are general in nature, provided for informational purposes only and are not a substitute for individualized professional advice. We make no representation that we will improve or attempt to improve your credit record, history, or rating through the use of the resources provided through the OppLoans blog.