It’s the stuff daydreams are made of. Some mysterious uncle comes out of the woodwork and leaves you a vast fortune (and maybe a sprawling mansion) in his will. Or you buy the winning Lotto ticket. Hey, it doesn’t even have to be the jackpot – a few mil would do just fine! The question is: what would you do with your newfound wealth?
In the space of a week, 26-year-old Kristen Peterssen became a multimillionaire. Which sounds amazing, until you hear the rest of the story… Her mother, who had been diagnosed with cancer the year before, passed away, leaving her a retirement policy that paid out R4 million, plus an insurance policy of R1 million. Then, in the same week, a wealthy aunt and uncle left her another million each. She also inherited a house, a flat and an SUV – amounting to another R2.5 million in assets. Kristen hadn’t been particularly well off before.
‘I was naturally overwhelmed, and I’m not ashamed to say, I cried.’ Now, two years later, she shares what she has learnt.
Get a financial advisor
Most people who suddenly come into a substantial amount of money will need help managing it, especially if you were not particularly wealthy before. That’s where a financial advisor comes in. Of course, you need to make sure you have one who has your best interests at heart – not their own. Kristen went with a professionally certified financial advisor who was not affiliated with a bank; that way, they weren’t selling her products, but actual advice. ‘My advisor gave me a proper price comparison of all my options so that I could make a real decision and keep my portfolio diversified.’
Lock that money down
‘The smartest thing I did was put it all into a living annuity,’ she says. Now that she’s ‘funemployed’, this is what she lives on. ‘I can draw a salary from that while never touching the base amount.’ And because she has a fixed amount that she gets every month, she’s not tempted to just spend it all. ‘Which, for me, would be a very real possibility,’ she says, laughing.
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