The ups and downs of sudden wealth It’s human nature to think winning the lottery or inheriting a fortune would solve all of your financial problems. After all, many people dream of not having to worry about paying a mortgage, financing a child’s college education, funding long-term care for elderly parents, saving for retirement, or dealing with a seemingly endless array of other financial obligations. I have yet to win the lottery (apparently you have to play to win), and I Iove my family, so hopefully any inheritance is many years away. But, there's a good chance someone you know - perhaps even you - will find sudden wealth.Newfound wealth is a highly emotional phenomenon, and studies have shown that people are more likely to make poor decisions when their emotions run high. Before making any major financial decisions, those who have unexpectedly acquired wealth would be well-advised to step back, take an honest look at the life they have and then think long and hard about what they want their new life to look like. Sudden wealth has the potential to foster tension, anxiety, and uncertainty. It's natural to want to alleviate those helpless feelings. The list below identifies several types of reactions to sudden wealth that have the potential to cause financial and emotional issues:Retiring early. Sudden wealth recipients have been known to quit their jobs without considering the financial or emotional consequences. Working gives many people identity and purpose. Once your reason for getting out of bed every morning is gone, a void is created, and it must be filled with something.Adopting a nonchalant attitude towards wealth. If you have invested your time and effort into acquiring a nest egg, you are more likely to be very careful managing that nest egg. On the other hand, if you didn't earn it, you are more likely to spend irrationally.Thinking you have more money than you do. $1 million is a tremendous amount of money, to be sure, but there are over 10.1 million households in the U.S. with $1 million or more in investable assets, excluding the value of their primary residence. Being a member of the millionaire club is not nearly as exclusive as it once was. It is important for individuals who suddenly acquire a significant amount of money to have a wealth advisor run projections that will determine how long their money will last under various spending patterns.Being inundated with loan requests, business propositions and charitable requests. A constant barrage of requests from relatives, friends and associates can be overwhelming. The suddenly wealthy need to determine a process to gently but firmly address the requests.Becoming overly guarded if those in their circle talk incessantly about their newfound wealth.So, given the myriad obstacles, what are the newly wealthy to do? At Central Trust, we believe the best place for these individuals to start is to determine their essential, fundamental life goals. These may include: spending more quality time with their family, feeling more in control of their financial lives, helping those less fortunate, etc. To that end, an in-depth discussion regarding goals and aspirations is one of the first steps in Central Trust's comprehensive financial planning process.Once these life goals are established, Central Trust's relationship managers work very closely with each of their clients to help them understand how their wealth can be best utilized to achieve their goals.Contributed by Michael J. Foster Executive Vice President & Eastern Regional Manager, Central Trust Company St. Louis, MissouriProducts and services offered by Central Trust Company are not insured by the FDIC, are not deposits of or guaranteed by any depository institution or affiliate bank and are subject to investment risks, including possible loss of the principal amount invested. Insurance products are available through and underwritten by non-affiliated insurance companies. The information provided in these articles is intended for informational purposes only. It is not to be construed as the opinion of Central Bancompany, Inc., and/or its affiliates and does not imply endorsement or support of any of the mentioned information, products, services, or providers. All information presented is without any representation, guaranty, or warranty regarding the accuracy, relevance, or completeness of the information.