So you recently came into a large sum of money. All of a sudden, everyone you know just became your long-lost friend. It seems that now that you are rich, your friends and family cannot wait to help you distribute and spend your good fortune. They all have grand ideas for how you will be able to best benefit their wants and needs. But what no one seems to be considering is how you feel about them getting their hands on your money!

Here are a few tips to help you protect your windfall from being squandered by your own friends and family members:

Never Tell a Soul

A rule of thumb, when it comes to acquiring and holding on to large sums of money, is to never let anyone know what your financial situation happens to be. When others are not certain that you are a person of wealth and means, it makes it difficult for them to maneuver your wealth out from under your own control. The less others know, the less others will be tempted — so while you can quietly invest your money and give to charities you care about, resist the temptation to flaunt your wealth.

Live Cheaply

Another way to throw your friends and family off the track is to live cheaply. The moment you start making a slew of big-ticket item purchases, this creates the impression that you have an excess of money to spare. By living cheaply, this will help to keep your wealth hidden under the radar. Friends and family will likely not come looking for handouts if they think you struggle to make ends meet yourself. In addition, developing a habit of being cheap will also help to ensure that you will keep your wealth around for the long term.

Put Your Money Where You Cannot Touch It

There are many investment vehicles where money is tied up for lengthy periods of time. If you attempt to remove your money from an investment, such as a 401k or Roth IRA, there is generally a penalty associated with such transactions. This way, if your friends and family learn that you have acquired a sizable sum of money, you will be able to point out that your money is going to be tied up for years or even decades to come. This gives you a long time to consider how you will handle your money, to continue to keep it out of the reach of your friends and family, once your investments mature.

Use Your Money as Upstart Capital

A great way to make your money inaccessible to your friends and family is to tie your money up in an upstart venture. Making your money work for you by building a small real estate rental empire, for example, is one way to help ensure that you retain total control over wealth you have transferred into your business for handling operating costs and company growth. Your friends and family may then know that you have a considerable amount of money, but this does them no good if that money is tied up in a business and is busy making you even more money.

Recycling the money you make back into growing your business will keep others guessing for years to come. Just be sure to complain a lot about economic hardship and outrageous taxes to further throw your friends and family for a loop concerning the stability of your financial situation. And if you do have a friend or relative you’d like to help out, see if you can do so anonymously through a charity or through your house of worship.

There’s nothing saying you have to be stingy with your newfound wealth. Just use it wisely, and be careful about who finds out about it — for the sake of your own sanity as well as your net worth!

 

Disclaimer: Dolphin Asset Group is not allowed to provide tax or financial advice. All information contained herein should not be construed as such. Readers are advised to seek independent advice from a qualified professional.