Dream of hitting the big time, or striking gold with a sudden windfall? As exciting as sudden fame and fortune may sound, knowing how to handle the increase in wealth is key.
It does happen though. People may simply get lucky and come into vast sums of cash through a lottery win. Or perhaps they’ve done well on reality TV, like Love Island winners Ekin-Su Culculoglu and Davide Sanclimenti, who scooped the show’s £50,000 prize.
After England’s Lionesses triumphed at Wembley, there have been suggestions players are likely to be targeted with lucrative offers of collaborations with brands.
“Coming into a significant sum of money is something many people dream of, and it’s obviously incredibly exciting,” says Matt Wotton, executive director of sports, media and entertainment at private bank and wealth manager Coutts. “However, longer-term financial planning is critical – particularly with younger clients, who need to think about the future.
“There are decisions to be made around how to deal with your money, how best to invest it, and whether you are making the most of the opportunities that arise. Finding a new network and a trusted adviser enables people who suddenly find themselves in this situation with a place to ask questions and get the answers they need,” he adds.
Here are some general tips from Coutts on handling new wealth…
1. Don’t rush
Coming into money suddenly is incredibly disorientating, so don’t feel you have to grab the first deal you see.
2. Fame can be fickle, so plan ahead
It’s easy to fritter away winnings or earnings and regret it later. Thinking about what you want in future – goals such as home ownership, stability and even a pension – will help make the most of your opportunity.
3. Don’t ‘let your head get turned’
The newly wealthy may be bombarded with chances to be the face of many brands or products. But it’s important for people to remember that they are brands in themselves – and some choices could be damaging.
4. Be careful about pressure
People can suddenly find themselves the biggest earner in their friendship and family group. While this provides opportunities to help, it can also make people feel under pressure to spend. Getting unbiased financial advice from a specialist can be invaluable.
5. Finally, keep your feet on the ground
A life-changing pot of money can be difficult to handle, whether you’re a reality show contestant, sports star, or a lottery winner. Press pause, take a deep breath, and don’t get too carried away – you’ll thank yourself later.