Here’s how most over 35s would use an unexpected windfall

by Steve Randall on 11 Dec 2018

If they were to receive unexpected wealth, almost two thirds of Canadians aged 35+ would pay down debt or share their good fortune with friends and family.

A new survey from BMO Wealth shows that an estimated $1 trillion in personal wealth will transfer to the next generation of Canadians by 2026 and roughly 70% of this will be in financial assets.

The poll found that the financial priorities of respondents shifted when asked to consider them before a windfall and afterwards with achieving lifestyle goals in retirement replaced by sharing wealth and paying off all debts.

Before financial windfall

After financial windfall

Achieve lifestyle goals in retirement

55%

Share with family, friends, charity

64%

Increase my wealth

49%

Pay off all debts

64%

Protect current wealth

40%

Invest in the stock market,

a business or property

47%

Manage taxes in retirement

27%

Financial goals or priorities

would remain the same

38%

Financially help my (grand) children

20%

Buy the big ticket items

I always wanted

17%

Other

4%

Splurge and spend freely

10%

Other

1%

But with unexpected wealth, comes risk.

“Regardless the source of wealth, receiving a substantial sum of money unexpectedly carries sociological and psychological implications. While the significant investment opportunities can be exciting, be cautious of psychological issues associated with sudden wealth syndrome," said Chris Buttigieg, Director, Wealth Institute, BMO Wealth Management.

 

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