How they can help in wealth creation
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All our lives, most of us aspire to have enough wealth to achieve all our goals and live care-free or with a surplus which we can use whenever and however we want. Sometimes, such surplus may come sooner than later, such as in winning a lottery, getting unexpected inheritance, or even a lucrative compensation package.
How do you then manage your wealth? There’s enough that you can do with it but what is it that you must not do. Here are 5 don’ts to keep in mind if you come by a large sum of money that’s surplus or windfall gains such as lottery winnings, inheritance etc.
A lot of money can bring to surface all the pent up dreams of a lifetime. However, spending on luxury cars, houses and vacations is also the quickest way to lose money, as is investing in wrong products. The best option is to take your time, consult a professional and make it grow in a way that it sustains you a lifetime.
With a large corpus in hand, you may feel generous or grateful, and want to offer help to the less fortunate or charitable organisations. Curb the instinct till you get your own financial affairs in order and have secured your and your family’s goals and risks.
Also read: 5 tips to help you spend your money
The windfall will sprout endless well-wishers, including family and friends, with advice and endless options on where to spend or invest it. Investing or starting a business with friends or siblings could make you lose both money and relationship.
It may feel like the money will last forever, but it won’t unless you take steps to make it grow. Even if you invest wisely, do not depend on the windfall to finance you forever. Continue with your job and do not plan early retirement till your goals are achieved.
While it is a good idea to wait before you decide to invest, don’t wait forever. Keeping money in bank may be the fastest way to lose it because you will spend it at will. Lifestyle inflation and complacency are bound to make you go overboard with spending.
Also read: Where to invest to create an emergency fund
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