Handling Windfalls of Money

​From an early age, I have always wondered how much money one is given from the start of ones life may negatively impact an individuals work ethic and ability to strive for further opportunities. Many of us know people who were given large trust funds, or large sums of money, and through the years their finances take a downward sloping curve. The best years of their lives are behind them, and it is a situation of maintaining or enjoying what has been bestowed upon them. An opposite situation I have found is when parents have very little throughout their lives and have not saved up for their child’s college education, or to provide them a strong start to put their life on the best trajectory possible. This individual needs to work hard, take on additional work opportunities, and grind every day to get a shot at the American dream. Throughout this blog I am going to address the impacts on performance money brings to kids from an early age, and how it has the potential to position the child on a trajectory of success, failure, or somewhere in between.

Mismanagement of finances has occurred since the dawn of time. You do not have to look far to see that most lottery winners blow through most of their winnings within a few years. Easy come easy go. In the finance community it is widely known that “a fool and his money are soon parted.” There was no effort and challenges to overcome to earn that money, and because of this, it is not challenging to spend this money.


​Some wealth is generational, and some is newly created. An example I am about to bring up has to do with the stewardship of money with a particular group of people, but lessons can be learned from this no matter who you are. Native Americans in the United States have been subject to many opportunity disadvantages over the past hundred years. A particular cash cow for Native Americans on reservations is casinos (Native Americans can run casinos on land in the U.S, and these are extremely profitable). An example I saw a few weeks ago was regarding a Native American tribe in Wisconsin that gives something called “18 Money”. This “18 Money” or “Big Money” is given once the individual turns 18 years old and graduates high school, and from the example, I saw it was around a $250,000 lump sum of cash.


​This money is notorious for being a blessing and a curse because poor stewardship of it leads to many horrible habits that cannot be undone. When many of these fresh high-school graduates who just received the 18 money were asked what they would do with it, many of them said they would buy a Maserati, buy their parents expensive gifts, or spend it on drugs and alcohol. What needs to be addressed here is the behavior aspect. Often, these individuals were living so close to the edge for the first 17 years of their life. They never had money or the opportunity to get money, but they also did not have experience in the management of this either. Many of the native American reservations have taken a step back to assess this situation and have been giving better alternatives to this money. Through education programs/grants, to monthly dividend payouts, better courses of action are being taken to address this situation. Personally, if I ran into $250,000 in cash at the age of 18, with confidence I would have tried to be wise with it, but I may have caved into negative outside influences and become a poor steward because of my lack of education at the time.

Running into big money without working for it does not always yield bad results. I bring this up frequently, and politics aside, but I think George W. Bush and Jeb Bush have done pretty well for ​themselves given how much money they grew up with. Additionally, Richard Branson grew up with some money, but he still has done very well for himself. While we can look at specific examples, and do our best to explain why certain people turn money/wealth into a positive scenario and others frivolously spend it away, the bottom line comes from the strength of the character to draw strong boundaries. Being able to say no frequently and have the right people in one’s corner is so important when trying to avoid being just another statistic. Furthermore, they need to have that innate drive to be successful and begin with the end in mind, rather than focusing on small things such as material objects or the next big party. These things are fleeting and because they give the dopamine rush and are so easily attained, they are the very things that leave those individuals empty-handed down the road.

I see countless individuals playing and hoping to win the lottery in today’s day and age. While this may not sound as sexy, instead try and focus on learning the best stewardship of finances. Learn about money management, listen to podcasts of Dave Ramsey, Chris Hogan, or KPP Financial. You can also read books, subscribe to publications or attend seminars to learn from the minds of the greats. 


By nature, we tend to do what is fun and easy, and sometimes what is fun and easy is not what is best for our monetary goals.  What will give you profound results, in the long run, is sitting down and assessing previous, current, and projected state. Looking from before the current state, what worked and what did not? Apply what worked on the projected state and seek help from others who are strong role models to fill in any gaps. Whether you inherited a large trust fund, ran into 18 money, or started with nothing remember in the end the people who get far financially have a strong financial education and have mentors that have mastered the game.

Thanks, everyone for joining me in today’s blog. Please feel free to comment and share if you enjoyed the content!

-Published 7/1/2020

Nothing stated in this article is a recommendation from Forehand Financial to buy or sell a particular security or asset class. You should wisely consider your tolerance for risk, time horizon, and financial goals before making an investment. With investing, you run the risk of losing money, always read an investment prospectus and make an informed decision before allocating capital to a particular investment.  

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