How to Get Sudden Money

We have written about the problems wealth can cause, especially sudden wealth, but you know you can handle those problems! The problem you want to solve now is how to get that sudden money. In this article we list and discuss 16 different ways you might come upon a windfall.

According to CBS Money, the most common sources of sudden money are listed below.


Lawsuit Judgments.

An example of a windfall from a lawsuit judgment was the case of Stella Liebeck of Albuquerque, New Mexico vs. McDonald’s in 1992. Stella bought a cup of coffee and spilled it on herself in the car. She sued McDonald’s – saying the coffee was too hot.

Contrary to popular opinion, this case was not a frivolous suit. Stella actually received 3rd degree burns over 6% of her body, had to get skin grafts and was hospitalized due to the hot coffee spill for 8 days. The coffee at this McDonald’s was kept at the corporately recommended temperature of 185 degrees Fahrenheit (plus or minus 5 degrees) – much hotter than most home served coffee.

The trial court gave a punitive award of $480,000 – or three times compensatory damages to Stella – but the parties eventually entered into a secret settlement – so the public will never know how much Stella actually got.

Would you want to be harmed, hospitalized, hire lawyers and fight a corporate giant for years to get sudden money (a portion of which went towards the fees and medical expenses of Stella)?


Juanita Jordan received a divorce settlement from Michael Jordan in 2007 for more than $150 million. They had been married 17 years and have three children together.

Marcia Murphy, once married to Neil Diamond, received a settlement from their divorce in 1995 of $150 million after 26 years of marriage which produced 2 children.

Amy Irving, ex-wife of Steven Spielberg, got half his fortune in 1989 – about $100 million. They had been married 4 years and had one child. Note that in 2007 Spielberg was worth $3 BILLION.

If you are even lucky enough to be married to a high producing spouse, do you really want to get a windfall by disrupting your life and your children’s?

Business sales.

These liquidity events can take the form of:

  • The sale of the entire business to a competitor or larger corporation
  • Taking a company public
  • A recapitalization or refinancing
  • Large stock dividends or
  • A partial sale or spin-off.

Goggle is a major player in buying other corporations having acquired more than 80 companies. In 2006, Google bought YouTube. The three co-founders of YouTube (Chad Hurley, Steve Chen and Jawed Karim) achieved a major paper windfall. According to the Wall Street Journal Blog Digits on March 19, 2010 in article “Finally, Here’s What YouTube’s Investors Made In Sale To Google” By Scott Austin:

“Chad Hurley received $334 million worth of Google stock, while Steve Chen got $301 million and Jawed Karim received $66 million. Not too shabby for three twenty-somethings who started YouTube a year and a half earlier.”

If you work hard to build a business and then work through a liquidity event to sell it, you are expecting to be wealthy. Even so, having the money is different than having the company. You may lose a sense of esteem, control or power when you sell the company. Planning for the money you will get is important.


You can inherit money and assets in multiple ways, including:

  • Being suddenly informed at age 21 of ownership of the contents of a custodial account containing hundreds of thousands of dollars.
  • A trust “kicking in” and starting to make required income distributions at ages 21, 25 or later.
  • Receiving a large outright gift from a parent or grand-parent.
  • Receiving large principal distributions from a trust, say, at ages 25, 30 and 35.
  • Receiving a large inheritance, outright or in trust, from the death of a relative.
  • Many people receive some kind of behest from relatives – either as gifts during the relative’s life or at their death.

Some of the larger and more famous inheritors are folks like Thayer Cheatham Willis – who inherited wealth via the founding generation of the Georgia-Pacific Corporation. She is the author of a book about the problems inheritors have (Navigating the Dark Side of Wealth). Jamie Johnson, an inheritor of the Johnson & Johnson inherited millions of dollars when he reached 21. Sam Walton left substantial amounts to his children.

Sometimes you are aware that you will be inheriting or will receive a substantial gift, and sometimes you aren’t. This type of sudden wealth can be mixed with the grief of loss of a loved one or guilt at not having earned the money.

Retirement packages.

If you have been diligently saving for retirement, you eventually will need to deal with the distributions. If you take a lump sum distribution, it may be of significant amount. Plan carefully and consider it sudden money, even thought you earned it over a lifetime. Getting that large check for the distribution may cause you to exhibit some of the sudden wealth syndrome symptoms!

Stock Options.

Bonnie Brown started at Google in 1999 working as a part time masseuse. She was given a lot of Google stock options with a strike price in the pennies (Google was a start up back then with only 40 employees). After 5 years she retired and cashed in some of her options, becoming an instant millionaire.

Although a lot of employees received stock options (and later restricted stock awards) in the go-go decades of 1990s through the early 2000’s, not many resulted in instant millions. No matter how large the options or awards, the sudden money is taxed and the recipient should think through what to do with it!

Some of the other sources of sudden money are.

Lottery winning.

Some people actually do win the lottery, but you probably shouldn’t count on it!

Sterling Plumpp from Chicago won $1 million. After taxes he got $600K. He was truly one of the winners (as opposed to the winners who end up being big losers). After winning, he continued to live moderately. He already had a pension from work, but he kept working and he kept his family relationships intact. He did spend some (on a new car and some dental work). The first thing he did was get a lawyer who is also his financial advisor, to help him handle the sudden wealth.

Buying lottery tickets should not be considered a retirement plan!


According to Poker, Michael Mizrachi is one of the all time biggest winners in poker.

They report that he has won almost $11 million over the course of the past 7 years, most years not winning that much, but some years winning over a million that year. Michael has been playing since age 13.

Star athlete.

Making it big as an athlete has been achieved by some remarkable individuals.

In Managing a Windfall by Lynnette Khalfani published in Black Enterprise Nov 2006 , Bobby Simmons, an NBA star for the Milwaukee bucks signed a 47 million dollar 5 year contract. Although some young athletes squander their contract money, Bobby did not. He worked with a financial advisor 4-5 times a week to manage his various portfolios. Unlike many, he will have money once he is out of the NBA.

While it is always great to dream and work towards being a great athlete, a movie star or the next American Idol, many many folks never do – in spite of all the time and effort they put into it.

Insurance settlement.

John Houston (Whitney Houston’s father) died in 2003, leaving behind an insurance policy naming Whitney as the sole beneficiary of the $1 million payout (not the she needs more money).

Life insurance is an estate planning tool that is sometimes used for owners of non-liquid wealth – to provide funds to pay the estate taxes that come due on the family farm, or the legacy mansion or the family business. This allows the inheritors the opportunity to keep the non-liquid assets instead of being forced to sell them to pay the taxes.

If you receive an insurance settlement, it is probably because someone died (or you lost something of value like your house). There will be emotions to work through as well as financial planning to be done.

Unclaimed money.

Perhaps some of your ancestors (or even you) lost track of a retirement fund, a bank account or a brokerage account. When this happens the money can be turned over to the state to hold in the name of the original owner. Here is a link to start your search for your suddenly found money.

Royalty income.

Authors of best selling books, movies and other types of original work can receive significant amounts of money in the form of on-going royalty income. This is classed as sudden wealth because you never know how many items will sell and royalty is based on a percentage of sales.

One of the most famous examples of this is billionaire author JK Rowling – who wrote the Harry Potter books. The first three books have already sold 35 million copies giving her royalties of $37 million. She commands 5-10 percent over and above the industry average (10%) for royalties on the sale of each copy. In addition, she gets royalties from other books, movies and merchandise sales.

Great collector find.

Perhaps you are a collector, or just a lucky buyer of an exceptional antique. This too can be a source of sudden wealth when you sell the collectible or antique item.

Ruth’s aunt was given a mobile by Alexander Calder. It was appraised on the Antiques Roadshow to be worth between $400K and $600K at auction.


Don Cruz won the 2005 Home and Garden TV show Dream Home in Tyler Texas. Each year HGTV offers a new dream home, all of its furnishings and usually a vehicle and significant amounts of cash to the winner. Most people enter online.

The 2011 dream home was in Stowe, Vt and the entire package was valued at more than $2 million.

Most winners have not kept the houses, because the property taxes have been too high for them to afford!

Winning game show contestant.

The 2006 Nobel Peace prize for Physics went to George Smoot, MIT graduate for knowledge about the origin of the universe and the second winner of the $1 million dollar prize on TV Quiz show Are You Smarter Than a Fifth Grader?

However, even getting onto a game show can be challenging, let alone winning the biggest prize offered!

Bonus or stock awards.

You may receive a bonus or award from your employer as sudden money. Some of the white collar workers at GM will see bonus money of 4% to 50% of their base salary for helping to pull GM out of bankruptcy.

What would you do with sudden money? Save it or spend it?


Sources: YouTube sale

Wells Fargo White Paper “Spending Time on Sudden Wealth”

“Managing a Windfall” by Lynnette Khalfani, Black Enterprise, Nov 2006 p137

“Advising the suddenly wealthy” by Ralph Bovitz, Mitchell Freedman, Karen Goodfriend. Outlook. Palo Alto: Spring 1998. Vol. 66, Iss. 1; pg. 18, 6 pgs,2933,266343,00.html

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