Michael Callahan
Financial Tips for Managing Sudden Wealth
Sudden wealth can change your life. It can also leave you feeling overwhelmed, uncertain, and a little bit lost. Whether the result of an inheritance, legal settlement, divorce, or another life event, it brings with it not just opportunity, but emotional and logistical challenges.
I understand this firsthand.
When I was 19, I inherited what some might consider a life-changing amount of money following the death of my sister and then my aunt. It did change my life, but not in the way I expected. The inheritance was less about feeling financially independent and more about the experiences it allowed me to have.
That windfall helped me buy a condo and allowed me to take low paying internships in financial planning just for the experience which inspired my career. But it also carried a lot of emotional weight. Some of the money should have been my sister’s. I kept wondering what I could do with it that would make her proud. What if I made the wrong decision and lost it?
Today financial advisors provide well rounded and long-term guidance, but back in the early 2000s the focus was on stock picking; and I figured I could learn to do that on my own. I started investing right into the teeth of the dot-com crash and watched as my account balance dropped. I remember visiting my brother in New York one Christmas. The market was down, and I was stressed and embarrassed. I spent the trip worrying rather than enjoying the time with my family. Eventually, I sold everything just to stop the losses. That decision brought immediate relief but also meant I missed out on the market recovery that followed. It taught me a critical lesson: being successful with an investment plan is more about emotional tolerance in tough times than anything else.
Today, I carry those lessons with me in how I work with clients. Which is important because inheritances like this are becoming more common: An estimated $124 trillion is expected to be transferred through 2048 in what many are calling the "Great Wealth Transfer."
If you're navigating a sudden financial change, here are a few key things I often share with clients.
- Take a Breath Before Taking Action
The pressure to "do something" right away can be intense. But acting too quickly often leads to impulsive decisions you may come to regret. My first piece of advice is to put the money in a high-yield savings account and give yourself time to think. You don’t need to have all the answers today. It’s healthy to pause.
I've worked with clients who have gone through divorce. Some receive sizeable settlements and have to decide whether their next chapter will include buying another house or renting. Their biggest fear is making the wrong choice. I tell them it’s perfectly fine to rent for now, put the money in a savings account, and figure it out over time. That time often gives them an immediate sense of relief. Sometimes we just need someone to give us permission to slow down.
- Reconnect with What Matters Most
A pause isn’t just about logistics; it’s a moment to reflect on what really matters to you. When I inherited money, I thought a lot about my sister. That reflection led me to start a nonprofit foundation in her honor. It gave me something to focus on that has purpose and meaning.
For you, that purpose might look different: going back to school, helping your kids, starting a business, traveling the world. There’s no universal answer—just your answer. That’s one way in which working with a trusted advisor can help bring clarity.
- 3. Keeping it Simple Can be Best
A large sum of money can make it feel like you need a complex, high-stakes plan. But the right solution is often slow, steady, and clear. There are always going to be people trying to sell you a system or a silver bullet. My advice is to tune out the noise and find someone you trust to help you build a plan that fits your life.
- 4. Consider the Full Financial Picture - Including Taxes
At Sachetta, we look at everything through a tax lens. That’s one of the biggest advantages of working with a CPA-led firm at which every client advisor holds both financial and tax credentials. We understand the implications of receiving wealth, investing it, and planning how to use it. Our goal is to help you avoid surprises and make thoughtful decisions that align with your financial future in ways that minimize your tax burden.
- 5. Choose Advisors Who Help You Feel Secure
When people come to us in the midst of a life transition, they’re not looking for someone to chase market returns. They want to feel secure. That’s what we aim to provide.
I’ve had clients come to me after losing a spouse suddenly. In situations like that, we tend to meet frequently, often join meetings with attorneys, and help translate everything into action steps that the client can take. In moments like that, just having someone who can shoulder some of the burden makes all the difference.
Final Thoughts: It's Okay to Ask for Help
You don’t have to figure all of this out on your own. Sudden wealth isn’t about finding the perfect strategy on day one; it’s about building a thoughtful path forward with support. At Sachetta, we’re here to walk that path with you.
Do you have questions about managing sudden wealth? Let’s have a conversation about your next steps.
Michael J Callahan, CPA, CFP®, MST, and CEO is a Certified Financial Planner™ practitioner, Certified Public Accountant, and holds a Master’s Degree in Taxation from Bentley University. Mike has been involved in personal financial planning, as well as both business and individual taxation for more than 20 years.