At some point in time, one may come across a windfall gain by way of inheritance, bonus, and lottery ticket or even through winning a contest like KBC (Kaun Banega Crorepati). But the question that looms large here is “how should this sudden and windfall gain be treated?” One can easily understand the importance of acting smart from the contrasting lives of first KBC winner Harshvardhan Navathe, who won Rs. 1 crore and Sushil Kumar Patel, winner of Rs. 5 crore prize. While Navathe is now an established person, Patel is struggling hard to get even close to earning his pre-KBC income of Rs. 6,000 a month.
Such contrasting scenarios between two KBC winners are due to their varying behavior in handling the boon, in this case lottery money. Quick and easy money lures an individual to the trap of impulsive spending. Thus, it becomes all the more important that such opportunities are managed prudently. Here are some of the ways in which an individual could make the most out of the unexpected gains.
Wait to Act
: A person should overcome the craving of spending money by waiting for at least six months before even taking out a rupee of the earned sum. Vacations to exotic locations, luxury gifting or a real-estate deal could wait for some time. Following such method will help a person to decide and make plans for how to best use the huge sum of money to generate more money. Six months time would adequately provide an individual with both the time needed to come up with a strategic and winning plan as well as to overcome the urge of impulsive spending.
- One should consider hiring a certified financial planner to take care of the budget and long term planning. Sunil Patel did not have exposure or experience of handling huge wealth thus hiring a qualified professional for the job would have saved Patel from living the life of impoverishment he is living today. One should look for background, credentials and experience of a financial planner before signing the final agreement.
Channelize to fill the gap
- Look out for weak links that need a prioritized resolution. For instance, an individual could use the money to repay a mortgage sum in order to avoid heavy interest or penalty fees. The funds must always be channelized to make them more productive. Every single rupee should be employed that it in turn generates more money.