Triumph over curse of sudden windfall
Jasmine Atieno @sparkleMine
Three months ago, Mombasa based journalist, Mukoto Imbova, won Sh250,000 through soccer betting after staking Sh500 on 17 teams.
This is not his first win: A couple of weeks earlier; he had won Sh80,000 and Sh50,000 on the same day after staking Sh1,000.
Betting has become a normal activity for him and as much as the wins are never guaranteed, he has won some huge amounts through time, which has come with both celebrations and lessons.
“Only my wife knows I bet and she is supportive. I don’t tell other family members when I win; I will though surprise a few of them with a Sh1,000 or Sh500.
After winning the latest bet, the largest beneficiary was my sister whom I surprised with Sh10,000.
And as a freelance journalist, I bought equipment for my job. I bought a new Nikon camera D5600 and a laptop.
And because I am a man of the people and elder journalist, I splashed Sh20,000 on fellow journalists, that is Sh10,000 for a goat and Sh10,000 for drinks of their choice.
I know parties can be termed an an extravagance, but to me it’s not. Yes, when friends know you have won money, some may want to give you some proposals and you may end up being conned, but you have to be clever,” he adds.
People often think their troubles will be resolved if they suddenly get large sums of money and life would be better.
Whereas it would seem so at first, it can also come with its own challenges.
Dangers of not planning
Statistics indicate that a large number of people who hit the jackpot end up broke, as some have reported that their lives were worse after the money, while others stated that they were happier before the money.
As psychologist Tracy Nyaguthii says the pressures as a result of getting a windfall could bring about psychological conditions such as anxiety, panic attacks and depression. This condition is called sudden wealth syndrome.
Sudden wealth syndrome is largely held as an identity crisis as a result of the sudden life transition when people come into large sums of money fast.
The money could come as a result of winning races, such as is the case of athletes, lottery winnings, inheritance, retirement options, stocks options, or even sale of a business.
Symptoms include isolation from friends as a result of mistrust, guilt, shock, and an intense fear of losing the money.
Sudden wealth syndrome can damage your life in several different ways. It can lure you into reckless investments or overspending, which can leave you worse off financially than you were before the windfall.
It can also cause mental and emotional stress as you struggle to adjust to your new lifestyle.
And finally, it can put a strain on your relationships with others – both old and new.
“Handling money comes with a lot of responsibility. People who gain large sums of money fast often do not have the skill to maintain and grow the money even from a psychological point of view.
Thus, they lose it fast by spending. The best way to deal with your new normal is once you receive the windfall; keep this information to yourself to avoid it being mismanaged and getting numerous requests, which can be overwhelming.
Give yourself time to relax and think about how you would like to spend your new found money.
Continue with your normal life routine as much as possible. For instance, go to work, socialise with friends as usual, eat at your normal eating joints, budget as usuals and shop at places you would, among others. This will help you adjust to your new life,” says Nyaguthii.
Avoiding shock
She stresses that getting a professional financial advisor helps one manage and invest wisely.
This eliminates the distress and pressure of losing money. The expert can also help you get a hold of spending.
Once people realise they have to go through your financial advisor to get approval of getting your money, they stop bothering you.
“Understand and accept that with a windfall comes a psychological burden of stress.
Apart from getting a financial advisor, you need a therapist to help you transition better.
Counselling will provide the soft landing that will cushion you from the shock of the rapid transition,” shares Tracy.
Experts argue that sudden wealth syndrome is amongst the situations that can easily destabilise a person both mentally and emotionally, so much that the money someone came into might not add any value to the person’s life.
As economists Odhiambo Ramogi shares, a person is only as strong as the highest amount of money they have ever handled.
If you have only handled Sh500,000, now imagine suddenly coming into millions.
“When this money comes, try and settle your mind around it. Don’t tell people about it; just leave it in the bank for maybe two to three months and get used to the fact that you really have it.
The second step is to draw a plan into what you want to do with the money. Don’t just own it in liquid form, high liquidity is a threat and you could end up spending it in a rush.
Convert the money into an asset that can bring sustainability. For example land, or go into a business such as farming.
It is important to come up with a plan then invest because by investing you have already saved the money.
After that you can now spend the remaining five to 10 per cent of the remaining liquid,” advises the economist.
