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Kevin Swanson Discusses the Perils of Sudden Wealth at a Young Age with Financial Times

After finding success as actors, athletes, musicians or influencers, many young people have quickly multiplied their wealth in recent years. While these success stories are admirable and exciting, if their sudden wealth is not handled correctly, it can disappear quickly and ultimately lead to emotional and financial turmoil.

To learn about the perils of making a fortune at a young age, the Financial Times spoke with Potentia Wealth CEO, Private Wealth Advisor and LPL Registered Principal Kevin Swanson for insight.

According to Swanson, once the initial excitement of their sudden wealth passes, many young adults often grapple with feelings of fear, guilt and stress – especially if they come from humble backgrounds. “Often, people got into sports or social media because they were following their passion, but money can cloud our decisions and create emotional chaos,” he explains.

Swanson also has seen many young people quickly spending their wealth on things such as fast cars, boats, planes and even private islands, without setting aside any money for retirement or emergencies. “Money slips through their fingers in two to three years because they are not prepared to be good stewards,” he tells the publication.

To help circumvent both the emotional and financial problems that may come with generating great wealth at a young age, it is important to have an experienced and knowledgeable investment advisor by their side. However, investment plans for someone in their twenties should look different than someone facing retirement.

“We recommend dividing these [financial] areas into four buckets: one for life events, an emergency fund, working capital and retirement,” says Swanson. “Each of these buckets feeds the greater financial goal, whatever it may be, in a strategic way. Goals can include purchasing a home, investing in personal life experiences, or buying assets such as art, tech and property.”

Subscribers to the Financial Times can read the entire article here.

The opinions voiced in this material are for general information only and are not
intended to provide specific advice or recommendations for any individual.

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