What would you tell your client who received a $2.5 million payday after a month of playing "Jeopardy!"?
Advisor Troy Murphy, whose business is built on working with those who achieve sudden wealth, has some advice for James Holzhauer, the wunderkind who earned close to $2.5 million in 33 days of playing the game show "Jeopardy!" and whose winning streak came to an end on Monday, after being upset by a University of Chicago librarian.
Murphy, a former NBA basketball star who saw firsthand during his pro days how sudden wealth can be squandered, gives this advice to Holzhauer — and others who come into sudden wealth:
- Treat every dollar the same — If you come into a sudden windfall, resist the urge to splurge; treat your "found" money the way you would your earned money.
- Pay yourself — Set aside an amount each month to save and invest for yourself. Don't keep this in a regular checking account, which earns next to nothing, but a high-yield money market account while you plan your next move.
- Know your monthly expenses — Figure out what you spend each month, including apps, subscriptions and memberships typically overlooked, which can add up fast.
- Write it down — Create an investment policy statement and write down exactly what you're going to do, sign it, and share with someone who will hold you accountable.
Holzhauer, a professional sports gambler based in Las Vegas, probably isn't a stranger to sudden windfalls, but this advice from Murphy could aid him in keeping those wins. The "Jeopardy!" champ did say he planned to use some of the money to travel globally with his family.
