Thursday, January 29, 2009

Preparing The Floodgates

Private Wealth Magazine

By Gary S. Shunk , Megan Wells

... People who find themselves overwhelmed by a sudden liquidity event express a ... mix of emotions: disbelief, elation and bewilderment—even grief, depending on their relationship with the person who left them the money. But people do not come out of this experience the same way and the outcome is not always positive. We’ve seen some clients careen off course before righting themselves and attempting a rational investment of what remains....

A Flood ... As new wealth floods in, a person’s identity and old ideas of self are suddenly tested. They are faced with numerous questions. “Will this new money change who I am?” “Will it change how I behave?” “Do I trust myself to remain true to my values or will I be tempted to pursue a lifestyle I previously disdained?” “How will my relationships change?”

No matter how stable and composed a client may seem, the new money will have a psychological impact. And the intensity of the emotional response is not entirely determined by the amount of wealth received. ... For some, new money brings exciting possibilities. For others, new money brings a downpour of disruption. ...

Trust And Fear The stress created by a big financial gain can be difficult. Change can be frightening. Certainly it can be uncomfortable. ... Sometimes money is imagined to carry the qualities of the person who bequeathed it. ... Consequently, the heirs might start furiously spending their inheritance—because they’re trying to be rid of it. ...

Curiosity And Resistance ... Studies show that people with curiosity respond to change better. On the flip side, a person resistant to change may shut down. Just waiting for wealth can trigger purposelessness. ... Their lives are “on hold” until the money comes. When it does finally arrive, the new wealth can stun their identity and derail their calling, as well as alter their character or cause it to disintegrate. ...

Gary Shunk is a consultant to families of wealth and the advisors who serve them. His primary mission is to help integrate wealth, character and calling. He is based in Chicago. His Web site is

Megan Wells is a writer and communications expert. She uses writing and storytelling for leadership, creativity and innovation. She works in Chicago. Her Web site is

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