Although it is incredibly rare, sometimes it happens that people get a massive influx of capital. The most common way is by inheriting a fortune from a deceased relative; the others are often different forms of gambling, like winning the lottery or something similar to that. But very few people are ready for the money, and they'll lose it as quickly as they get it.
Statistically speaking, over 70% of lottery winners are back to being broke after 3 to 5 years, and this happens because they have no idea what to do with that money. They've never had money; they've never built wealth, and they're eager to spend it all. And that's why having a plan is so important.
It could mean the difference between this money being a blessing or a curse. So here are 15 things you should do if you get rich all of a sudden. Welcome to Alux, the place where future billionaires come to get inspired.
All right, so we're starting off today at number one: don't let anyone know. Now, this is your number one priority at first. Immediately after finding out, shut your mouth, okay?
Zip it. This instinct to share the good news with everyone you know, to shout it from the rooftops, to shove it in the faces of your enemies, and burn those bridges with your newfound cash—well, that's what broke people would do. But you're no longer broke, so privacy is your main concern.
You'll tell them when the time is right. Number two: pay all of your debt. Now, this is the first and only expense you should undertake in the beginning.
It's actually a must because debt is what's going to eat away at your life. As soon as that money hits your account, proceed to pay off all of the debt you have so far and then stop. You might feel like money is no longer an issue, and any new debt you can repay immediately, but that's not true, trust me.
So pay off your existing debt and don't create any new debt. Number three: do not quit your job yet. Quitting your job immediately after getting money is the first domino in a series of events that will lead you to personal bankruptcy in just a few years' time.
Okay, we are not wired to be non-productive; no matter how lazy you are, you need something to do. If you're not going to work, you'll be out there chipping away at your good fortune. Although the satisfaction of telling your boss to "f off" would be enormous for some of you, you'll realize that your feelings toward work have changed.
The balance of power has shifted because now you have the power to walk away if it ever comes to it. That said, though, keep your day job and go about your life in the same way you've done so far. Number four: secure the money and let it sit for a while.
Once that money reaches your bank account and you've paid off your immediate debt, let it sit for a little while. It's not the money; it's you who needs time to process this. Your entire life is affected by this financial change, but you're still the same person with the urge of getting everything you've ever wanted.
But don't give into it. The best advice is to not touch that money for the first, like, 6 months. That might sound like a long time, but it really isn't, okay?
And it makes a massive difference in what impact the money will have on your life. Every day you'll think about what to do with that money, and you'll see that in the next 6 months, plans will dramatically change. And that's why you should not be impulsive with your actions here.
Number five: make investment in yourself a priority. You need to learn before you spend. If you want to keep that money, you need to start learning, okay?
You haven't built wealth because you don't know how to grow money, and this needs to change. You need to become a person who is financially literate, who understands how money works before you start moving it around. Because not doing this will make you reckless or allow people to take advantage of you, and that is not what anyone wants.
A fool and his money are soon parted; it's a very popular saying throughout the world because it's true, okay? And you do not want to be the fool in this scenario. You have the luxury of time, okay?
So start investing in yourself now. The average person who will inherit or win this much money isn't some kind of sophisticated investor, okay? And we don't recommend you try to be one yourself.
Instead, we're just encouraging you to start with the basics first, and that's exactly why we created a collection called Money 101. Without knowing this, you'll be poor forever, and you can find it included with your subscription to the Alux app. This collection of lessons will take you through every foundational piece of knowledge you need to reach financial freedom, plus the actionable steps to get you there.
We built the Alux app with the goal of creating 1,000 new millionaires, and we know that education is the key to getting there. We know this because it's exactly how we got ourselves out of poverty and into the millionaires club, and we want that for you too. When you download the app, you're prompted to fill in a survey.
Don't skip this step, okay? Because this is how our algorithm is best able to create a unique learning path designed to meet you where you are and give you the tools and action steps that you need to make it to the next level. And to sweeten this deal for you, if you download the app and.
. . Come back here to scan this QR code; you'll get 25% off the yearly subscription, but get a free week on us first—no charges upfront.
After five days, we'll remind you about the trial, so you're not accidentally charged. But truly, okay? There's so much value in there; you're not going to want to cancel.
You can see for yourself at alux. com. Slapp number six: Do not switch financial advisors.
If you've inherited money from a rich relative, it's pretty likely they had a financial adviser. The proof of their services is in the amount of money you're inheriting. They know what they're doing, and your money is in the right hands here.
So familiarize yourself with the relationship your relative had and the services they provided. Good financial advisors usually work through referrals and only accept a limited number of select clients. They're expensive because they know what they're doing.
A big mistake newfound wealthy individuals make is taking that money and moving it to someone else who will dry them out in no time. Number seven: Get comfortable, but not rich comfortable. Pay off your house, yes, but don't move to a rich people neighborhood.
This is the most common mistake that athletes make; they buy a really expensive home that comes with additional long-term costs like property taxes, maintenance, and so on. Not only will you spend a bunch of money on it, you've added a layer of recurring debt to your life. Do not buy every person in the family a car.
Okay? Cars are liabilities; your money is wasted away in the driveway. The goal is to fix your life, not completely remodel it or switch it out for what you think your life should be like.
Number eight: Do not invest in your friend's business or lend the money. At some point, the cat's coming out of the bag; everyone's going to know that you've got money now—money that you didn't earn yourself—which means that some people believe they're somehow entitled to some of it. Everyone will start asking you for money—money that you will never see again.
If you give it away, they'll all have new ventures, new projects or ideas, and new problems that your money can fix or light up. But this money is your safety net, and putting holes in it no longer makes it safe. That's why money is also a curse.
If you give them money, your relationships are kind of doomed, okay? They're going to lose it, and your relationship goes down the drain with it. If you don't give them the money, they could resent you for it, but at least, in the latter option, your children still get to go to college.
Number nine: Do not start a business immediately. We've all had the daydream of being a boss, right? Telling people what to do and looking at other businesses like, "I could easily do that myself.
" But the truth is, nine out of ten businesses fail. You've already exhausted your luck getting the money in the first place; luck is not what's going to make your venture successful. Start small, okay?
Talk to your financial adviser and run all of your investment decisions by them. It's easy to get caught up in the illusion of potential success when you're starting out. The same way, this illusion will fade away, and so will the funds that you sink into it.
Number ten: Prepare for change. The more money you have, the bigger the target on your back. Because now, people have things to take away from you.
You're more likely to be sued; people will try to scam you or use emotional leverage to get more money out of you. Having money is a lot of work. You would think life gets easier with money, but the truth is, some problems get solved, but other more complex problems typically crop up in their place.
Number eleven: Focus on getting healthier. You've got money now; it's time to enjoy it for as long as possible. You cannot afford to be a victim of your own bad choices at this point.
Begin with a full medical checkup and then start taking better care of yourself. Pay more attention to what you consume and find ways to improve your health. At this point, you should be able to afford any kind of custom-made plan—from what you eat to how you maintain your body and your mind.
Take full advantage of this privilege, okay? Because it is indeed a privilege. Number twelve: The 5% rule.
The greatest thing to wrap your head around is that the money you just received is not going to last forever—that is, unless you're familiar with the 5% rule. To put it simply, the money you have needs to be wisely invested so it generates an annual return. If you only spend that return, well, in theory, your money should last forever.
But you need to get as close to this as possible. Think of this large sum of money as a money tree; as long as you take care of it, it'll bear fruit every single year, and you can enjoy the fruit. But don't go cutting the tree down as temporary firewood.
Number thirteen: Protect your kids from the money. Not only will your life be turned upside down because of this money, your kids' lives will change as well. So, when it comes to protecting your kids from this money, it can be done through a trust where they get an allowance from the money without allowing the original investment to ever be touched.
That's how the rich are getting richer and how legacy wealth is created. Number fourteen: Do not cheat on your partner. Now, this should go without saying, right?
Regardless of what your bank account says, once you've got. . .
Money: people will want to be around you for their own personal motives. Temptations will be big, and mistakes will be expensive. How expensive?
Think half of everything you own, plus child support—expensive. This money should strengthen the bond between members of the family, not drive them apart. But, unfortunately, not everyone is mature enough to look at the effects their actions will have on their lives, and they can fall into an easy trap.
And number 15: play it safe, because why risk it? You find yourself in this incredibly fortunate position that you can provide a lasting benefit to you and your entire family. If you just play it safe, don’t put your money into shady businesses; don’t try to push your luck and hope to double that investment quickly.
Say thank you to the universe and play it safe. Okay, really, the best thing to do is to behave like this event never even happened—just somehow, magically, your debt and financial problems went away. Now, live your life in accordance with this rule and you’ll be well off.
The money will grow, and you’ll be taken care of if you just don’t abuse it. We’ve examined numerous cases of people who’ve had it all and blew it all, and we don’t want to mention you in a future video because you did the same. Okay, Alexir, now we’re curious: do you know anyone who blew through a fortune and ended up poor?
Share your story in the comments below so our community can learn from your experience. And of course, for watching with us all the way to the end, you know you’re getting a bonus. Number 16: the law of averages is at play.
Whenever luck hits you this much, be careful. Okay? Because that pendulum swings both ways.
The law of averages dictates that an equilibrium should be restored. In the words of Thanos, everything should be balanced. Remember this word: balance.
Because as long as you maintain it in your life, you’ll be fine. If you’re a true Alexir and have watched this video until the very end, please write the word balance in the comments just to keep this true Alexir community alive. Thanks for spending some time with us today, my friend!
Make sure to like and subscribe so you never miss a video. Until next time, take care.
