Post: #1

Id like to start a discussion on how to manage finances for those of us who have aquired wealth in a short period of time. I think it's an interesting topic because traditionally, many people slowly accumulate or grow at a relatively manageable pace. Some people on the other hand have it plopped in their lap all at once ( they graduate school and start out high, win the lottery, or a business goes boom overnight). This poses challenges because of lack of prior experience but I think in today's roller coaster economy it is more common than in the past.


I guess my question is, what are some smart moves once you got that nut in your lap?
Are there novel / smart investment strategies?
What I've noticed ithe most is that tax is mofo. How would you buffer it?


If you wanted to invest for fun in a few high risk ventures where would you start? Who would you talk to? How can you know you can trust the right team?

Post: #2

If you want to know how to manage wealth, whether you're a high-net-worth or ultra-high-net-worth person check out 'True Wealth' by Thane Stenner. One of the best no-bs books out there on how to handle everything that comes with wealth, and I highly recommend it. It goes over how to manage wealth if you accumulate it fast (pro athlete, lottery, inheritance), and if you accumulate it via many years etc..really a great book. It deals with the tax issue on a Canadian level, as well as in the States!

An older book (2001) but the principles remain the same, and if you want to become an FP in Canada to manage wealth, this book is still a must-read.

Post: #3

The easiest thing I would recommend is start getting good at managing money before such an event occurs. Obviously this doesn't answer the original question but if you have the where with all to properly save and invest money you'd probably treat a sudden windfall as more to invest with instead of "buy more depreciating assets!"

But lets say you never managed anything before. You win the Powerball and now you're part of the 1%. First congrats, second the first thing you should do is pay off all of your debt. Then, contact a wealth management firm in NYC. If it's a smaller amount like say 100k+ to 1 million i'd say go to Charles Schwab or Merrill Lynch and have one of their consultants help out properly manage the money.

As for taxes, hire a CPA. There comes a point in a man's life when Turbotax will not cut it any more. This is one of them.

Overall, if you aren't sure what to do and your emotions want you to BUY useless junk immediately contact a wealth management specialist. It's better to outsource things you're not aware of then make massive mistakes and squander a great gift.

Post: #4

First things first, if you were given it (lottery, inheritence, etc.) be quiet about it. Don't be like these kids telling everyone about anything. I'd let yourself take a little for fuck around money/gifts to yourself. Maybe 1 or 2% (if it is really large). Then lock the rest down for 6 months while you settle down and get a handle on it.

Post: #5

(01-16-2016 11:45 AM)swoosh Wrote:  Id like to start a discussion on how to manage finances for those of us who have aquired wealth in a short period of time. I think it's an interesting topic because traditionally, many people slowly accumulate or grow at a relatively manageable pace. Some people on the other hand have it plopped in their lap all at once ( they graduate school and start out high, win the lottery, or a business goes boom overnight). This poses challenges because of lack of prior experience but I think in today's roller coaster economy it is more common than in the past.


I guess my question is, what are some smart moves once you got that nut in your lap?
Are there novel / smart investment strategies?
What I've noticed ithe most is that tax is mofo. How would you buffer it?


If you wanted to invest for fun in a few high risk ventures where would you start? Who would you talk to? How can you know you can trust the right team?

It depends on different factors. What is your age and timeframe?

It depends on how much wealth one has come into? If it is substantial, it's probably best to set up most of it in tax friendly or tax free income and have the principal be guaranteed, while taking a smaller percentage and allocating it to growth.

What type of growth? Aggressive, tactical? Tactical growth uses managers or a manger who attempts to be invested during bull markets and rallies and not invested during bear markets or declines. There are some managers who have been able to do this. No one catches the exact top or bottom of course but there are quality managers out there who have beaten the averages.

Sent you a PM.