If Ken Jennings could talk to everyone who comes into a sudden windfall — whether it’s because they won the lottery or a wealthy relative passed away — he’d tell them this:
Don’t do anything immediately.
Jennings broke records in 2004 when he won 74 “Jeopardy” games in a row, ultimately walking away with over $US2.5 million in prize money.
“Suddenly you have a lot of freedom,” he said. “And that sounds like the dream to somebody who is not in that situation. But in the moment, it would look terrifying.”
His best advice to anyone in a similar position? “Give it time for the change to settle in.”
Jennings’ advice echoes something Robert Pagliarini, author of “The Sudden Wealth Solution,” previously told Business Insider: The first thing you do when you come into sudden money is “take a very deep breath. … The more we can ground ourselves and not get caught up in the frenzy, the better our decisions will be.”
For example, if you quit your job right away, Jennings said, you might quickly go stir crazy at home or realise that the money won’t really last you a lifetime.
In fact, Jennings cited a study by the National Endowment for Financial Education that found 70% of people who come into a windfall wind up broke within just a few years.
Jennings is pretty pleased with the way he handled the windfall. He didn’t take a leave of absence from his job as a computer programmer (he technically never quit, he said, and his leave continues today) until he got a book deal for “Brainiac,” published in 2006.
“It was definitely wait and see, wait and see, don’t do anything stupid in the moment.”
Jennings also took a relatively simplistic approach to money management. On his website, he writes that most of his prize money is “invested in your usual boring places: stocks, bonds, real estate, etc.” Some has also gone to charity.
He told Business Insider: “You can’t always put a price on the peace of mind of not thinking, ‘Did I just put this money in my brother-in-law’s weird, fly-by-night, business scheme?” (Thankfully, he never found himself in that specific situation.)
“It’s tempting when you’re in that situation to do the complex thing because you think, ‘This is the world I travel in now.’ And I don’t know if that’s always right.”