Timothy Schultz:

I am really excited to welcome back Robert Pagliarini back onto the podcast here today. He actually is the author of The Sudden Wealth Solution and he's a financial advisor, but he has helped many people who have come into sudden wealth and he is just very intriguing. But Robert, thank you so much for coming back here today.

Robert Pagliarini:

It's great to be back. I really enjoyed our first conversation and look forward to catching up where we left off.

Timothy Schultz: Yeah, yeah, absolutely. So, you know, once in a while, from time-to-time, these giant jackpots in the United States, at least, get to be in the billion-dollar range, whether it's Mega Millions, Powerball. I mean, it just gets up there and lottery fever, it gets to be an all-time high. And you see real people win these amounts. So realistically, if you come across hundreds of millions or let's say a jackpot of a billion tomorrow, you know, what should you be thinking about? What should you do?

Robert Pagliarini:

Yeah, it's a great question. It's interesting because when the jackpots are a mere 2 or $300 million, nobody really pays any attention to it. It's only when it gets up into the billion that people start paying attention. And that's when I start getting calls, I'm sure you do too, from the media. People wanna talk about it. They get excited about it. And of course, more people play. And so it used to be pretty rare that we would see a billion-dollar jackpot. And now, because of the change of how you win and how likely it is to win, we're seeing more and more of those big jackpots. So there is a big difference, I would say, between winning a few million versus tens of million, versus hundreds of million, versus a billion. Right? I mean, it's not simply a few extra digits. Like it really is a dramatic difference in terms of how you're going to respond, the appropriate way to respond and what your life is likely going to look like post-win between these various amounts. So if you happen to win one of the big jackpots, I always caution people when they start talking about the big jackpot, because when we see in the news, all right, the jackpot's going to be $1.5 billion. It's not really $1.5 billion, that's what the headline number is. That is, of course, if you're the only winner, but that's also if you take the annuity over 29 years. If you take the lump sum, which, Timothy, I think we all know, everybody takes the lump sum, and we can talk about that too, because I have an opinion that I think differs from a lot of other people. But let's just assume you take that lump sum. Well, immediately, that $1.5 billion, it might be $700 million. It usually gets cut in half or so. It depends on interest rates and things like that, but let's just say it's $700 million. So you think, well, that's terrific. I mean, listen, it's not $1.5 billion, but it's $700 million. But is it really? No, you have to pay tax on that. You have to pay federal tax and sometimes, depending on the state in which you live, you might also have to to pay state income tax. So let's just imagine that $700 million after taxes drops down to $400 million. Okay, listen, it's still a lot of money granted, but it's not $1.5 billion. And so I always caution and let people know that they really have to understand how much money they actually have at the end of the day, after taking the lump sum, after paying the taxes, maybe paying off debts. And this applies whether you win 1 1/2 billion or whether you win the $20 million jackpot. It's the same. You really have to get clear on exactly how much you really have at the end of the day.

Timothy Schultz:

At what point do you bring in a financial advisor to help you? You see the numbers matching. You're probably jumping through the roof and feeling like you're on cloud nine. But at what point, do you call in someone to help you that actually knows what they're talking about? You

Robert Pagliarini:

Yeah, that really is a great question. And I would suggest doing it sooner rather than later. And so in the book, I write about the three experts that I would have in my corner if I were to win a big jackpot. And that is an attorney. It's a tax advisor. And thirdly, it's that financial advisor. If I won, after jumping through the roof, like you said, which I would do, I would then start building my team. And those three individuals will be able to guide you and help you make better decisions because chances are you're going to win the lottery maybe once in a lifetime. So you want your team. You want your people that are around you that are giving you advice to have gone through this process with other people. So whether it's the attorney or the financial advisor or the tax expert, ideally they would have some experience dealing with sudden wealth, dealing with lotteries because you don't want to be the only person that's going through this and that your team is also sort of learning along the way. That's not what you want. You're hiring these advisors because they have some wisdom and they have some expertise. That way you can rely on them and know that, okay, they've seen this before. They know what works. They know what to sort of stay away from. And so I would bring in these experts as soon as possible.

Timothy Schultz:

Before you redeem the ticket?

Robert Pagliarini:

Absolutely. Yeah, good, good catch. I should have mentioned that. As soon as you win, as soon as you realize that you have won, then a few things I suggest that you do. The first is make sure that you document the fact that this is actually your ticket. And so I suggest taking a selfie with it, a video, whatever it might be. You just want to make sure everybody knows that if it came down to it that you could prove that this is in fact your ticket because a lottery ticket is a bearer instrument. That means that whoever bears it or has it, holds it, possesses it is the rightful owner unless you can prove otherwise. And so that's why I think it's very important for you from the very very beginning to document the fact that this is in fact your ticket. Of course, I would make sure that that ticket is protected, because that little piece of paper, the size of a Post-it note, could literally be worth a billion dollars. And so you wanna make sure that you've protected this ticket as much as possible. And as I think we talked about last time, as I write about in the book, you want to have a confidant, someone that you can share this with. And this can be a friend, it could be a family member. But I would limit it to one person and no more than that. I think for a lot of lottery winners or sudden wealth recipients, like you said, you get very excited and you want to share the good news. You're excited, you want to tell other people about it. This is not the time to do that. There's plenty of time after you collect the win to really settle into it and then share the good news with others. But at this stage, when you haven't even collected it yet, when you don't even have your team together yet, you want to make sure that you keep it as secret and as private as possible. And ideally, if you don't want to share it with a family member or friend, that's where you can rely on your team, whether it's the attorney, the financial advisor, the tax expert. That way you can have people that you trust, that you've hired, that have your best interests in mind. If you want to share your fears, concerns, excitement, joy, whatever it might be, and likely it's going to be all of those things, if you want share that with someone, share it with your team, right? They've been there before, they can understand what you're going through, and they can guide you as much as possible. So it's very important that this team that you've put together is there from the beginning because you have a very big decision to make, and that is, do I collect the lump sum or instead do I choose to take the annuity payments? That is the most important financial decision you will ever make in your life, is deciding between those two outcomes. And I suggest get together with your team figure out the pros and the cons, because there are advantages and disadvantages to both strategies. And it's important for you to think through what those advantages and disadvantage are so you can make the best decision for yourself rather than just defaulting to just give me the money, give me a lump sum and I wanna be on my day. So it's very important that you have that team together who can guide you and help you make that decision because it's a big one.

Timothy Schultz:

It certainly is, especially if you win one of these billion-dollar jackpots, but if, it's one of the biggest decisions to make is the lump sum or the annuity. And most lottery winners do choose, as you mentioned in the beginning of this interview, the lump sum. So why is this? And you mentioned there's pros and cons to both the lump some and the annuity. What do you mean?

Robert Pagliarini:

Yeah, so there are definitely advantages to taking the lump sum. The advantage is that you get the money. You get it all up front. You can do anything you want with it. It's yours. You can put it in your bank account. You can spend it. It's your money, right? It hits that account and it's all under your control. The disadvantage with the lump sum is it hits your bank account. You have full control over it. You can spend it. You can do anything you want with it. The disadvantage and the advantage are the same exact thing. It's just a matter of perspective. So the advantage with the lump sum is that, again, that you get it, you can do whatever you want with it. The advantage with the annuity, a little bit different. So with the annuity payments, it's structured over a number of years. You get basically an amount that gets deposited into your bank account every year for 29 years. The advantage with that is what we've seen in the news, and we read about so often, and that is this lottery curse. The fact that some people, when they win the lottery, they initially, they think it's fantastic. They do a lot of great things with the money, but then ultimately they decide that, you know, they were happier before the money. Maybe they start having relationship issues. Maybe they've spent the money down. Read about that so many times. They win the money and within a matter of years, it's all gone. And the problem is that for a lot of lottery winners, and they just...the excitement takes over. They think maybe they have more money than they actually do. So they overspend, they over commit, they over gift, whatever it might be. They make some bad investment decisions, and the money goes away. So if you do that with the lump sum payment, you don't get a do-over. Once you've spent the money down or gifted it, it's gone. It's not coming back. The only way it'll ever come back is if you get lucky enough to win the lottery again. So the advantage with the annuity payments is every year you get a do-over. You get to hit the reset button because you get a new deposit into the bank account. Every single year. That, in my opinion, is why, for most people, the annuity is the better option. Because it lets people ease into the sudden wealth. It lets them make mistakes. I always say, listen, if for the first few years you make some bad investment decisions, you buy too much, you spend too much, you give too much, you help too much and you run out of money, the next year, you get another deposit. And I'm hopeful that after three years, four years, six years, seven years, you sort of start to figure things out and you stop making some of those same bad decisions each year. But with a lump sum, you got one chance and one chance only. You cannot afford to make a mistake because there is no do-over. And that's why for most people, I really do suggest the annuity payment because it just gives them another chance.

Timothy Schultz:

Yeah, that's really interesting because so many people do claim that the cash option, lump sum is better because the interest rates are significantly higher and you can make more money that way, but at the same time you're holding the reins of the horse, so to speak. And so it could go any direction, including the wrong one if you're not responsible with it. Is that correct, or what do you think?

Robert Pagliarini:

Yeah, you're right. I think if you if you look at it from a strictly a financial perspective, you are likely to do better with the lump sum because you can get that money upfront. If you invested it wisely, you would probably do better than the annuity payment stream. But that's...there are a lot of caveats there and that is if if you don't make any bad decisions, if you invest it properly. For some people, that's great. The lump sum may be the better option if they want to maximize wealth. And if they have a team that can help them, then they're probably going to end up with more money. For other folks, I'm not so worried about whether they make 7% per year versus, you know, 5.5% per year. Like that's not the real challenge for a lot of people. It's when will I spend this money down? Will I make some very, very bad investment decisions or financial decisions where it doesn't matter if you can get another 2% on your return, if you don't have any money left over. And so that's why I say for a lot of people, I would really at least consider the annuity payments. Maybe you decide that it's not for you and you could do better with the lump sum. That's great. At least you've looked at the option and you decided for yourself that it wasn't for you rather than just default to taking the lump sum.

Timothy Schultz:

Yeah, that is really interesting. But let's say theoretically that anyone watching or listening to this today does have this luxury and gets so lucky and comes across a major ticket like this, if they choose the annuity, let's just start there, but if it's the annuity or the lump sum, I mean, what actually should you be investing in when you're talking about this kind of money? Or if you come across hundreds of millions, I mean some people get this in crypto or you know, there's there's crazy stories, different ways of getting wealthy very quickly. But whether this is a lottery or something else, what do you actually do? Where do you invest it? Where do put it? Do you put it in a normal checking account? What happens?

Robert Pagliarini:

Yeah, great, great question. So like you just mentioned, the lottery is certainly one sudden wealth event, but there are others, like you said. It could be crypto. It could...maybe you sold a business and you've been operating that business for 20 years and now someone comes in and buys it. Now you get this big wire that hits your bank account or maybe it's an inheritance. That's a very common form of sudden wealth, or it's a lawsuit settlement. Many of my clients have experienced settlements or judgments and overnight they get a windfall and they're similar to a lottery. It's hard to prepare for something like that. With a lot of these sudden wealth events, you don't see them coming. And it can sort of take your breath away because you're living your life and then all of a sudden something dramatic happens, good or bad, whatever it might be, and now all of the sudden, you are responsible for potentially millions, if not hundreds of millions of dollars, whereas the day before you were not. And so that can be quite jarring emotionally. Obviously it can be exciting. Depending on the situation. So the question, your question is, well, what do you do with that? Let's say tomorrow you are now responsible for a hundred million dollars. And today you don't have that hundred million and you're not even, you don't even realize that tomorrow you're gonna get it. And, but you do. And so that hundred million dollars likely goes into a bank account or an investment account, say Fidelity or Schwab. Some sort of wire occurs and that money goes into an account in your name. Take a deep breath, right? That's the first step because emotions are running high and emotions can put you in a state where it's more challenging to make really level-headed good financial decisions. But that's exactly what this situation requires at that moment is for you to relax, to take a deep breath and to really try to not make any bad financial decisions. And so that's what I always encourage. Maybe you don't know exactly what good decisions you should be making. But you probably have an idea of what decisions you should not be making. And so that would be don't retitle the account in someone else's name. And I know, you're probably thinking, well why in the world would I ever do that? Well there can be some shady folks out there. That's why it's important to really get good qualified experienced advisors on your side. And I know when it comes to the lottery, there's all kinds of advice out there when it comes to remaining anonymous. And it's not hard to imagine that you win the lottery. You haven't collected it yet. You're talking to an attorney and you're saying, I'd really like to remain anonymous. How do you think I can do that? And again, if you're not dealing with a really good, qualified, a reputable attorney. Who knows what they might suggest? It could be, hey, well listen, you know, you can remain anonymous, I'll collect those winnings on your behalf, and so what we'll need to do is just assign the ticket to me. We'll open an account in my name, and that way I'm protecting you, I'm your attorney. I'm going to make sure that nobody knows it's really your win, and you know, I'll do this as a service on your be half. You can see where that can... go bad very very quickly. So the question then is, well the money hits the account, what do you do at that point? If you don't already have your team together, put your team together. Don't don't spend any money. Don't transfer any money. Don't do anything until you have some experienced people who can work with you. Do you owe taxes on that? You might not know. Maybe it's a lawsuit settlement and you have no idea if you have to pay tax on that. That's why it's important to have a tax expert who can determine how much of that is going to be taxed if it will be taxed at all. Work with an attorney to make sure that you're doing all of the correct things. Work with a financial advisor who can run simulations and say, well, if you did this, this is the likely outcome. If you did that, that's probably going to be the outcome. You really want to put together a plan. And if you're not working with anybody, putting together a plan on your own when now you are responsible for hundreds of millions of dollars? That's exceedingly challenging for anybody to do by themselves. And so that's why it's important. If tomorrow all of a sudden you've got $100 million you're responsible for, reach out. Start getting some help.

Timothy Schultz:

That sounds like really, really good advice. And you mentioned the emotions that can be involved in emotionally jarring. And I want to ask about that and Sudden Wealth Syndrome in a second. But before I get to that, when you come across this amount of money, I mean, what sort of...for people that aren't familiar, I mean obviously you can make money on interest from this kind of money. You're talking about serious money from interest. So theoretically, if you come across $100 million tomorrow, what kind of money can you actually be making on interest?

Robert Pagliarini:

Yeah, that's exactly right. You have this asset now, this asset could be $100 million. And now the idea is how can I invest it in such a way where that asset, that bank account or investment account is not just sitting there, but it's actually making money. And so that's where you work with an investment advisor or a financial advisor who can construct a portfolio, an asset allocation for you that makes the most sense for you. So that would include things like stocks, bonds, it could be in the form of mutual funds or ETFs. It could be treasury bills, treasury bonds. It could be real estate, it could be crypto, it could a lot of different types of investments. The goal is to put together an asset allocation. And an asset allocation, if you're not familiar with it, is simply the division of a portfolio into different types of assets. So one type of asset would be bonds or fixed income. That's one type. Another type could be stocks or equities. That's another type. It could be real estate. It could be precious metals, like gold. These are all like categories of investments. And so the first step is really trying to figure out what percent of the portfolio should be in these different categories or these different asset classes. So that's really the first step is coming up with what's going to make the most sense for me. And how do you determine what's the best asset allocation for you? Well, one, I would say, work with a financial advisor. But in just this conversation, I would say determine what your risk tolerance is. How much risk are you comfortable taking? How much risk do you want to take? So certain investments have a lot more risk than others. So imagine Bitcoin, right? Very volatile. It's subject to 20%, 30%, 50% swings over a short period of time versus something like a certificate of deposit, a CD that you might get at a bank or a money market account that you may get at your investment firm. So on one hand, you've got highly volatile, subject to loss, crypto, and then you've stable US treasuries or CDs on the other side of the sort of the spectrum. So what you're trying to figure out is how much should I have in this more protected, secure, stable kind of investments, versus how much should have over here in stocks and, and other more, let's call it risky investments. So a question that you might get that I get often is, well, why in the world would I want anything on this side? Why would I want to invest in stocks? Why would want to invest in any kind of investment that is volatile or that has the ability to lose money? Why don't I just put everything over into CDs or a money market account? It's a great question. And the answer to that is, again, pros and cons of both sides of this risk continuum. The advantages with the very low volatile, less risky type of investments is that they don't move very much, right? You likely get some kind of an interest, but they don't appreciate very much. They don't go up in value. They're very stable. They're secure. So that's great. It's good to have a large portion of your portfolio in those types of investments. Over here, the advantage... is that these are the growth. This provides the gas, the ability for your portfolio to grow over time with stocks. And so they can work together to have income that's producing money for you every single day, every single month, and that's stable so you don't see your portfolio very, very much. But at the same time, if you had everything over here, because of taxes and inflation, these assets would not go up in value. And if you're pulling money from your account, this allocation over here is likely going to go down in value, so you need some growth. Most people anyway, in their portfolio, need some kind of growth assets in order to keep up with taxes and inflation. So this way, when you have a combination of some income-producing, stable investments with more growth oriented investments, you're able to not only just keep up with inflation, but you're able to pull money from that portfolio to live on and see your overall portfolio grow over time rather than start to decline over time. And so that's why it's very, very important that you put together an asset allocation that makes sense, that will grow over time, that you can pull money to live from, and that you can also sleep with. And when I say sleep with it means that you're not up all night worried about what's happening in the markets or what's going to happen to your portfolio if the tariffs go up, or if the tariffs come down, or if there's a war that breaks out. You want to be able to enjoy your new wealth. And the best way to enjoy new wealth is if you're not worried about it. If you can sleep soundly at night. So you want to make sure that that portfolio and that asset allocation is one that's making you money, that's growing over time, and that you feel comfortable with.

Timothy Schultz:

We are here with Robert Pagliarini, the author of The Sudden Wealth Solution. This is so interesting. And you mentioned sleeping soundly at night. And one of those factors that a lot of people don't think about when it comes to these giant jackpots, or I mean, even a million dollars or something like that, is the emotional toll it can take on a person, on some people. And so how do you suggest that someone prepare psychologically? Or take tangible steps or anything really? What is your advice to prepare for these types of changes that could happen with relationships or anything psychologically or socially after you win a major, major jackpot like this?

Robert Pagliarini:

Yeah, you're absolutely right. The emotions are unexpected how you're going to feel. In the book, I write about how when you experience sudden wealth, especially depending on the form of the sudden wealth, you're most likely going to feel a couple of different emotions simultaneously. So for example, if it's a lottery win, there's no way you could have prepared yourself for that. It was absolutely unexpected. I know most of us, if we play the lottery, of course we hope we're going to win, but deep down, most of realize it's not likely going to happen. So if it actually does, you know, it's hard to put yourself in that spot until it actually does occur. And so, the simultaneous emotions when it comes to something like a lottery win is obviously excitement. You're elated. You can't believe it. My life is going to be so much better. You start thinking and fantasizing about all the things, the great things you're going to able to do now with this money, the people that you're going to be able to help, the stuff that you are going to able to buy. So you're thrilled, right? It's a joyous, joyous moment when you realize that you've won. But that is immediately followed by other emotions. And those other emotions tend to be, you start getting worried. You start thinking, I don't know what I'm doing here. Like I can't...I won this money, which is great, but I have no idea what I should be doing now. And so you start to get scared. You start to think, am I going to, am going to screw this up somehow? Am I going make a bad decision? You might start feeling guilt like, oh, I'm like, I can't believe I won, but you know, what about my family? Can I help them? I don't know if I can help them. How are they going to start thinking about me now that I've won? And so you have this duality that occurs. Obviously you're excited, you're thrilled, but at the same time, you are very nervous and you're worried. And you are concerned. And I would argue, that's good. It's good to feel both. You should feel excited and thrilled and fantasizing about all this great things that you're going to be able to do now. And at the time, it's okay to be a little cautious and to worry a little bit, because that will help you maybe reach out and ask for some help to get that team together who might be able to guide you to maybe slow down on some of those decisions about spending money because you're a little bit worried that you don't really want to screw it up. So while though the polarity of those emotions can feel quite jarring and they can vacillate back and forth on a moment's notice. I think that it's good to have both sets of emotions. And I know we're talking about lottery wins. We also talked about other types of sudden wealth. And the form of the sudden wealth can really dictate the types of emotions you're going to have. So lottery win, we got it. It's great. It's exciting. It's wonderful. Could be a sports or entertainment contract. Let's say, you know, you just got signed to the NFL. You've got this $15 million contract. It's amazing. It's wonderful. You feel great about it. But there are also forms of sudden wealth that the money that you are getting maybe doesn't feel so good. And that could be an inheritance. Maybe someone very close to you has passed away and now you have this investment account. $20 million in it and the and you know, the only reason that you have this money is because someone that you loved has now gone. And that's a situation I've had many clients who experienced that same exact thing. And it can be very challenging because they feel badly feeling even any amount of excitement. Right? Someone, someone's died. You love them. They're no longer here. You feel obviously very sad and emotional about it. At the same time, some clients have expressed while yes, they feel all of those things. They may also feel like, wow, I've got this money. Like it's really going to improve my life. And then they, they feel bad that they're even thinking that like, I can't believe, you know, I'm thinking about my life is going to get better because this person is now gone and now I've got their money, like it can play all kinds of havoc on on your emotions. And I've seen some clients who've inherited money who are able to sort of walk that line very well and understand and appreciate that this person has gone, that they love them and at the same time they have left them money because they want them to improve their lives. And so they're, they're able to manage that. I've had other situations where someone's passed away and they're not able to fully appreciate the fact that they have this money and they feel like they shouldn't enjoy it, that they shouldn't spend it and that can be very hard for them because they, they have the ability to, to maybe do some things in their life with this money to improve it, but they don't want to. And that really, really even more so through an inheritance comes up when it's a lawsuit settlement or a judgment. Because if you are getting a lawsuit settlement or judgment, it's because something really bad has happened, right? You don't get a lawsuit settlement because something good has happened. It's only because something bad has happened and usually the something bad is either someone has died or someone has gotten very injured. And so both of those are just terrible situations. I had one client whose husband died and there was a lawsuit settlement as a result of that. And she overnight had, I wanna say it was about $55 million settlement that hit her investment account. And she told me, and I wrote about this in the book, she said she couldn't even look at her account. It made her sick to her stomach. And she called this wire that she received blood money. And the only reason she had it is because her husband died. And she didn't want anything to do with that money, at least initially. Because she felt like she was betraying her husband. She felt like she couldn't possibly spend any of it because she felt guilty. Like, if I use any of this money to do anything good in my life, It feels, it feels like a slap in the face to my my my husband like this is blood money. It doesn't feel right. It doesn't feel good. I should not be enjoying it. And in situations like that, what can happen is that the recipient wants to distance themselves from that money as much as possible. Like in her situation, she didn't even want to look at it. And if that continues, it can take the form of they just want to give it away. Or they want to give it to charity or friends or help others or maybe they'll make bad decisions with it through investments because they just don't feel good about it. And so they're either consciously or unconsciously, they're just trying to make some bad decisions and get it out of their account as quickly as possible.

Timothy Schultz:

Well, let's take the scenario with the lottery. I want to back up real quick. I mean, of course, an inheritance is certainly something a lot of people experience and it's another form of sudden wealth. But correct me if I'm wrong, but from, at least for me personally, and for some of the people that I've met and interviewed, they are more apt to be asked for money because they won the lottery, I don't know. Does that happen to your knowledge with people that come across inheritances as much? And secondly to that, how do you deal with that? We talked a little bit about this last time, but with Sudden Wealth Syndrome or feeling guilty for coming across all of this money all of a sudden. How do you deal with that? Because you have a really good strategy that you mentioned last time. But I just want to dive a little deeper on this real quick.

Robert Pagliarini:

Yeah, really, really great question. And I love your perspective because you've dealt with it personally. And so you know exactly what I'm talking about. So your viewers are getting quite the gift because they're actually hearing from someone who has experienced it themselves. And you're absolutely right. Whether it's a lottery win, they can feel guilty. Or if it's other forms of sudden wealth, that Sudden Wealth Syndrome, as it's called, is absolutely alive and well, unfortunately. And one of the reasons, I think, for Sudden Wealth Syndrome, which is just kind of like the lottery curse, I mean, they're very similar in that when you get the money and you've lived with it for a little while, you almost feel like you were better off before it. That's certainly the case with the lottery curse and even with Sudden Wealth Syndrome. You, while yes, you've got more stuff, you've gotten more toys, maybe a new house, a new car. Maybe you've been able to help a few people. You feel more financially secure, of course. Maybe you quit your job or if you're still working, you feel like I don't need the job anymore. And maybe you sleep a little bit better. These are all really, really positive things that money can provide. At the same time, if you experience sudden wealth, you can also, your relationships can change. And what's interesting is that one of two things can happen. Either the recipient of the sudden wealth either they change. Maybe they remain the same, but everyone else around them changes. Either of those outcomes, generally speaking, not super positive. Because imagine that, you know, let's say you're 40 years old. You've lived for 40 years. You know kind of who you are, you approached life in a certain way. Your friends are your friends for a reason. They've been around. You trust them. They trust you. You probably are in the same socioeconomic group. Maybe they're in your neighborhood, right? So similar houses, maybe similar incomes, occupations, similar interests, right? There's a reason your friends are you friends. And then you experience sudden wealth. Again, that could be from an inheritance, it could be it from a lottery win. And now all of a sudden, you are different. Your situation is very different. And not only do you know your situation is different. Guess what? Everyone else around you knows that your situation different. And when it's Sunday afternoon and you're at the barbecue with your friends and everyone's talking about, oh, you know, Monday is tomorrow, I've got this and I've that. And you're sitting there thinking, well, I don't work anymore. Right. You're, you're not in that same boat anymore. And it, what that does sometimes again, not always, but it can create, it can create space. It can create a divide between I used to be one of the guys or one of the gals. And now there's a little bit of a difference. You can't maybe relate. To them like you used to. And they maybe can't relate to you like they used to. In fact, I had a situation. It was a...He was probably 21 or 22 years old, got a lawsuit settlement, someone that he loved very dearly died and he got this money. And he was, he was in college at the time and he... What he was saying was that he tried to remain the same guy that he always was and, And I really do think that he did. Before I knew him, before he had the money and after he had that money, he was the same kid, the same interests, the same hobbies. He had the same outlook on life. He was in college, wanted to continue college, wanted a career. He didn't have to do any of those things with the amount of money he got. But he did. He was the same guy, but what he told me was fascinating. What he said was that the people around him knew that he had the money, and that he felt like they were treating him differently, and that what he noticed was that he used to joke around about all kinds of different things, about life, about school, about job, about not having any money, that sort of thing. And what he found was that they weren't talking to him about those same things like they used to. And so when I was talking to him about it, I was asking him, well, why do you think that is? And he was like, I don't know, I'm not sure. Like, I dunno, maybe they're just too busy. And I'm like, well what else could it be? And he's like, maybe, they don't feel comfortable talking to me about those things. About, oh, you know, I can't afford the car, I can't afford gas, I can't afford to go to this party because I don't have anything to bring, whatever it might be. They felt like he couldn't relate, or maybe they felt like if they talked about those things that they would expect him to help, right? Even though they didn't want him to help, so they're like, well let's just not even bring it up because I don't want him to offer any money. But even though both sides were really trying to be like nice about it and not be weird about it or uncomfortable about it, guess what happened? It created a gap, a divide like a difference and that difference became uncomfortable for him. And so these are the kinds of things that you have to think about, you have sort of work through. Because even though you might not change as a result of this new money, it doesn't mean that other people around you won't change. And you mentioned earlier about, you've heard and may have experienced yourself with the lottery win that people start asking you for money. And sadly, I can confirm that whether it's the lottery, it's an inheritance, it's a lawsuit settlement, it's sports contract or entertainment contract, a business sale, it does not matter whatsoever, what form of sudden wealth it takes. You will get asked for money. It could be a loan, it could be an investment. It could a gift. You will be asked. And this is why in the book, I wrote a number of chapters but one of them is how to say no. That's one of the chapters because "no" is going to be one of most important things and words that you're going to be able to use. And the other chapter is how help the right way. Because I think for a lot of people who come into sudden wealth, whether it's they feel guilty or not, they just simply want to help other people. And there's a right way to help and there is a what I would consider wrong ways to help. And so it's important to know which is which, because you don't want to help someone in the wrong way. And you also don't want to just say yes to everybody either, because that's a problem. One, you might not be able to afford it. And two, I've seen it happen where people say yes to almost everything. And at first, they feel good about it. Oh, you know, I'm helping, you know, my cousin. I'm helping my granddaughter. I'm helping fill in the blank, right? Feeling good about it can quickly shift to getting really pissed off about it, right? Because you're helping, they ask, you help, they help, you ask, they're like, dude, you start getting really irritated. And that's not a good place to be either. And so unfortunately, it doesn't matter the form of sudden wealth, you will be asked. I've had a lawsuit settlement client. It hit the papers, it was so large. The very next day, the very next day, she gets a knock on her door and it's someone from her religious institution congratulating her on this money. And guess what? You know, we'd really like to build a new wing and we'd like to name it after your husband. Would you be able to make a donation? The next day. One, a lawsuit settlement. Someone died, right? The next day, and it was someone from her religious organization. If you win the lottery, you can damn well bet people are going to be at your door calling you asking you for...something. If it can happen in a death situation, it'll definitely happen to you. You have to be prepared for that.

Timothy Schultz:

If and when that does happen, I know we don't have tons of time left, but what do you, how do you say no? And then you mentioned there's the right way to help people. So how do say no and what is the right? What is the best way to actually help someone?

Robert Pagliarini:

Yeah, so for some people, the right way to say no, and they're able to do it is For some people, it's very easy for them to be like, no, can't do it, not going to help you. And they're fine with it. Like that's that's just their personality. It's all great. Good for them. For a lot of other people, It's hard to say no. It is hard to say no when a family member is asking or a friend is asking. They don't have the ability to just say no and so in those situations, I say rely on your team. Specifically, I'd say rely on your financial advisor. And so if someone, well, let me rephrase that. When someone comes and says, hey, I've got this investment idea. Can you, you know, you want to lend me some money? Or do you want invest? Or if someone says, hey, we're really struggling paying our mortgage. Can you help us out this month? Or someone says hey, you know, your my daughter needs braces. Can you...Would you be able to help, like maybe help us pay for that? If you can't say no, here's what you say instead. You say, oh that's really interesting. You know, let me run that by my financial advisor and i will get back to you. So you're not put on the spot you don't have to come up with an answer right there. It's friendly, right? You're your not telling someone to go jump in a lake, right? You're compassionate. You're willing to think about it, to talk to your financial advisor about it. And it gives you space. It gives you time to like really think, do I want to help this person? And it gives you a chance to talk to your advisor to say, can I help this person if I want to? So that's, that's the one of the first things that I would recommend people just memorize is, hey, that's you know, really interesting. Let me see, let me talk to my advisor and I'll get back to you. And then if it becomes a situation where you're able to help and you want to help, great. You can do it. If you can't help, you can go back to them and say, you know, I talked to my adviser and you know, things are tied up. I'm just not in a position to be able to do that right now. So I'm so sorry about that. If they continue to ask or if maybe you've helped someone and they keep coming back and they're asking for help, then I would, I would take it to the next level and I would say, you know, um, it's a good question. Why don't you talk to my advisor? Here is her information or here is his information and you know, run it by them. Oh, you've got an investment idea? Great. Run it by them. You want me to make a loan? Hmm. Interesting, run it by them. And of course, you've talked to your advisor and you've said, I don't want to help anymore. I'm sick of saying no, I'm sick of saying yes, whatever it might be, let them down gently, right? And that way it takes, you're no longer the bad guy. It's, yeah, it's my advisor. They said, no, can't do it. And they can come up with a reason why you can't do it, truthful, untruthful, doesn't really matter. It gets you out of a bad situation and an awkward situation.

Timothy Schultz:

That seems like really good advice. And then the right way to help someone if you want to is also going through the financial advisor, would you say?

Robert Pagliarini:

That that might be part three of this interview because there there are a lot of wrong ways to help and there are some some right ways to help. I would say the difference between the two is the wrong way to help is when you are giving somebody money and it's not going to materially improve their life or set them up in a situation where they're going to be able to improve their life. So it's the whole, you know, give a man a fish fish versus teaching them how to fish. And I think for a lot of people, they ask, hey, can I have, can I have some money? Cause I'm, I'm running out. I need to pay the mortgage. I need to do this. And you just give them money, but it doesn't change their situation in a way where you're not going to have to continue to help them. And so that's, that's where learning how to help the right way is is a little bit different. It's empowering them. It's setting them up. Like I had a situation where a client's, um, daughter kept asking for help. And so she initially would just send her money over and over and over for various reasons, different reasons. There's always a different reason. Right. But she just kept sending her money. Until I was able to guide her and say, instead of continuing to send money and be frustrated and really start to get irritated with it because it happens so often, how can we help your daughter in such a way where it's not so much of a gift, but it's a way where she can start to better herself. And so what that ultimately entailed was her paying for an education, her getting some skills in an area where she could then go get a job and pay for stuff herself. And so that's an example of the right way to help. And initially it was an example of the wrong way to help as well.

Timothy Schultz:

Thank you, thank you very much. We are here with Robert Pagliarini, the author of The Sudden Wealth Solution. Robert, where can people find more about you and find your book?

Robert Pagliarini:

Yeah, they can go to SuddenWealthSolution.com. So lots of information there about the book and you can even reach out if you'd like.

Timothy Schultz:

And we will link to that in the description of this YouTube video or in the show notes if you're listening to this today. But Robert, although I have questions that could go on for quite a while, I do respect your time. So is there anything else that you want to say today that I didn't ask or that I don't know enough to ask? You know, I think we'll save it for part three. Perfect. There's definitely so many questions. We can definitely go on part three, so thank you so much. I really appreciate you coming back onto the program today. You're a wealth of knowledge. It's very interesting, so I appreciate your insights and it's great to see you again.

Robert Pagliarini:

Oh, it's always great to see you. I appreciate your time. Great questions, great insight. And again, I said this earlier, your viewers have quite the gift in being able to learn from you and your guidance.

Timothy Schultz:

Oh, well thank you. Thank you very much.