How I Went from Struggling to a $17 Million Net Worth Overnight

The story of former NBA All-Star Antoine Walker is a cautionary fiscal tale. During his NBA career, which included a 2005 Championship Ring as a member of the Miami Heat, Walker earned over $108 million as a player. However, excessive spending, a gambling problem, a series of bad business deals, and a 70-person entourage drained Walker’s resources rapidly. He was reduced to playing in the NBA D-League by 2012, before announcing his retirement. 

Thankfully, this tale has a happy ending: Walker managed to learn from his mistakes and now works for Morgan Stanley as an advisor to rookie players on prudent money management. 

Financial windfalls can affect people in some surprising ways. Those who are emotionally, psychologically, intellectually, and strategically prepared to receive and manage a sudden windfall have a plan, a purpose, and a vision. Those who are unprepared leave themselves vulnerable to frivolous overspending, becoming victims of unscrupulous scammers and grifters, and other predators. However, there are emotional and psychological issues that can also plague recipients of financial windfalls, which bear closer scrutiny.  Coping with a 180 degree change in finances to the upside may be a “nice problem to have”, but nevertheless can still pose a problem.

Money Guilt and Other Trauma

A Reddit poster who works in sales spent the majority of his adult life living a hand-to-mouth existence. However, he fortuitously had a pair of 7-figure sales cycles 6 years ago, combined with a large medical insurance settlement. He invested a large portion of the  money into stocks like Tesla, and in cryptocurrencies. Fast forward, to the present, he now had a $17 million net worth. However, his reaction has fluctuated between euphoria and oddly off-putting. His post inquired if others had similar experiences and asked for advice on how they dealt with the rush of conflicting emotions.

Among the respondents, several types of psychological trauma were identified and have apparently recurred significantly enough in others to be categorized, such as:

Money Guilt Trauma: One respondent described how she had gone from earning $30,000 a year and using credit cards to pay for necessities to make ends meet to earning $3 million per year in 6 years. During that period, she has experienced anxieties that the money “wasn’t real” and would evaporate overnight. She also experienced feelings of guilt and of not deserving of the money that she earned. She had to undergo therapy to learn how to cope with “money trauma” and to overcome the scarcity mentality that had ruled much of her life since childhood. 

Scarcity Mentality Addiction: People who have experienced mass deprivation of essentials as a result of war, economic depressions, catastrophes like earthquakes or hurricanes, or events like the pandemic can be psychologically scarred with a “scarcity addiction”. This can result in practices like hoarding and workaholic obsession to prevent any shortage of food or other necessities. One respondent described it as, “an ironic paradox where we’re afraid to let go of fear and we can only ever feel safe if we’re afraid.”

Survivor’s Guilt: One respondent likened the emotions to “survivor’s guilt”. After working 10 years along with others just struggling to survive, making her first million dollars “felt like hell” emotionally, and losing it was actually a relief for her. Although she was able to regain her wealth to now live comfortably, she described a sense of guilt that she managed to hit a jackpot while her friends were still barely hanging on.

Financial Advice and Learning The Financial Landscape

While therapy was recommended by several respondents for dealing with the emotional and psychological unease with a windfall, other had more pragmatic advice tips, such as:

• “It’s only on paper until you sell it.” Given the volatility of cryptocurrencies and stocks like Tesla, which has fluctuated wildly in the wake of the Leftist firebombing attacks on Tesla dealerships, charging stations, and on individual Tesla vehicles, the poster was advised to sell his gains and swap them into S&P 500 ETFs or other solid, and less volatile investments.
• Financial Education – The poster should take the time to educate himself about investing and money management in order to familiarize himself with his options and to better identify his personal risk tolerance levels.  Prior knowledge will also better prepare the poster for dealing with financial professionals whom he might consider to enlist for portfolio management assistance in the future. 
• Consult a tax professional – The poster will be subject to a wide range of taxes, so tax-deferred retirement plans and other legal tax shelter strategies should be explored to preserve as much of this net worth as possible.
• Philanthropy – Philanthropy, and even direct volunteer work, can be helpful in assuaging money guilt issues and offer a greater sense of fulfillment, in terms of giving back to others and to society at large. 

This article is intended solely for informational purposes, and anyone requiring more comprehensive advice should seek counsel from a financial professional. 

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