From Paralysis to Purpose: How to Navigate Your Inheritance for a Fulfilling Life

Imagine you’ve inherited millions of dollars.?Your mind moves into a state of paralysis, gripped with terror at the concept of effectively utilising these funds to live an enriched life.

Unfortunately, this is a commonly experienced problem for many Australians who are handed down considerable assets in their loved ones’ will.

Let’s look at the most typical conundrums people face upon learning that they are receiving wealth of significant value:

1. “I don’t want to lose it”
2. “I want to leave a legacy for my children, much like my parents have left me”
3. “I know I need help to manage this money, but I don’t know whom to trust”
4. “My parents would have wanted me to do X with this inheritance, but I want something else”
5. “I feel guilty about spending it”
6. “I feel like a failure compared to my parents; I want to do something meaningful in my life”
7. “I don’t know where to start”
8. “I am simply going to pay off the mortgage and then relax”

The above thoughts and feelings are all valid and real; your mind applies importance to the significant capital you will receive – this defence mechanism is designed to help you protect this wealth.

The key here is to move out of a place of fear and into a state of confidence. Uncovering how to do this will be unique to each individual’s circumstances and traits, however it is vital to discover, in order to move forward.?

In my experience, people making decisions out of fear tend to take one of the following paths:

• Do nothing with their funds. Take no risk, instead being paralysed at the fear of making the wrong decision, resulting in a low quality of life.?(Paralysis outcome)
• Sit on their funds for too long, and then make a rash or reckless decision that does not serve them, leading to either losing money or an inability to live an enriched life. ?(Regretful outcome)
• Educate themselves and build a team around them that can support them in living an enriched life. (Ideal outcome)

Let’s unpack what to do if some of the above reflect you and your feelings.

The first step is distinguishing between two forms of freedom: financial and emotional.

It’s vital to realise that the wealth you have inherited has now made you financially free (or independent) –i.e., you have enough money to live comfortably, independently, or freely.

Despite this, you are not emotionally financially free. ?The emotional bonds that grip you, hold you back from enjoying that financial freedom.

Accordingly, the question for you is less about what you do with your money tactically, but rather, how you adjust your mindset to become emotionally financially free.

What shifts do you need to make, to create this positive state of mind?

Status: ????????????“I don’t want to lose it”

Approach: ??????Absolutely, it’s admirable that you don’t want to lose it, but this should not lock you in a state of indecision.?You could reframe this sentence as I don’t want to lose this, but I also would prefer I live in a way that serves me rather than being paralysed by these monies.

Status: ????????????“I want to leave a legacy for my children”

Approach: ??????It’s common to want to “pay forward” what your parents have done for you. That said, it’s also essential to ask, if each generation was to continually harbour all that money without utilising it to actualise their life goals, then what would be the purpose of the original inheritance gift? This is not to say that you should squander all of it, but rather, that you should utilise the funds meaningfully. ?Clinging to the wealth does not allow it to be used.

Status:?????????????“I know I need help, but I don’t know whom to trust”

Approach: ??????When building a team of advisors, accountants, lawyers, financial advisers, etc., meet with a few people and go with your gut.

When making those selections, a few of the most important things to look for are:

• Being heard – it is important that any adviser understands what you are trying to achieve and then focuses all their guidance on that.
• Equally, It is essential that any adviser warns you of all significant downsides or consequences to your thinking, to assist in making the best decisions.
• A trained financial adviser is best suited to bring a team together, to assist in creating outcomes. They can ensure that your goals and objectives come first, and the strategy and tactics come later.

Status: ????????????“My parents would have wanted this, but I wanted something else.”

Approach: ??????In my time working with coaches, I’ve elicited that one of the best questions to ask myself is, “what would I want for my children if I left them all this money?”

If the answer differs from how you actually are treating yourself, then you are not practicing what you preach. You deserve the inheritance as much as your children deserve what you will give them.

Status: ????????????“I feel guilty spending it.”

Approach: ??????You will feel guilty about spending the money if you don’t have a concrete plan that aligns with your values and ambitions.?Develop clarity on your objectives. Then turn that into a tactical plan. This will be a big step forward. Then, when you implement, you can always look back to know why you’ve made your decisions.

Status: ????????????“I feel like a failure compared to my parents; I want to do something meaningful in my life.”

Approach: ??????This can be common for children whose parents have amassed significant wealth. Repeating what your parents have created for the family can be extremely difficult. Few people accumulate considerable wealth; not all careers or businesses can bring about such wealth. Re-define your idea of success and feel grateful for your opportunity to live an enriched life.

Status: ????????????“I don’t know where to start.”

Approach: ??????The starting point is working out what you and your family want to create, how you want to live, and who you want to be.?Work on the big picture first and feel alignment with what it is you want. This can change at any time, and it’s okay to be fluid from time to time. Start here, and the planning will be much easier once this is the case.

Status: ????????????“I am going to pay the mortgage and relax.”

Approach: ??????This might be the right thing to do. You might feel worn out and tired after many years of hard work. In this situation, needing time to relax and reset your mind for the next part of the journey is natural – and healthy. Don’t feel guilty about taking a break.?Waiting 6, 12, or 18 months before you start taking action is acceptable. However, it is important from there, to commit to taking action.

Financial freedom is not all about numbers. In fact, it’s less about numbers, and more about your mindset.

This is the apex of where you want to be with your wealth. To get there, the question you need to ask yourself is, where does your mind need to be, to become emotionally and financially free??Make meaningful steps to work towards this, and you will feel better about money and wealth.

At Bridge Private Wealth, we strive to find solutions to complex cases because we don’t have a one-size-fits all solution. Every financial journey is unique to you or your family and should be designed and honoured in that manner.