Most of us wish that we could win the lottery or inherit a large sum of money, in order to buy a dream home, a luxury car, or go on a lavish vacation. However, most people don’t realise that after receiving a financial windfall – such as an inheritance or lottery winnings – it is important to think about what you want to do with your money. If used wisely, unexpectedly receiving a large sum of money can alter the course of your life. However, managing a windfall is not easy, and for most people, having a large sum of money leads to uncontrolled spending and wastage. To help you curb any excessive self-indulgence, follow our tips for when you get rich instantly.
Pay your debt
The first one on our list of tips for when you get rich instantly, is probably the most important tip to take into account. When you receive a large sum of money the first thing that you should do is tackle your debt, as this might be your only opportunity to do so. Once you become debt free, you will be able to direct your money towards building more wealth.
NB: Once your debts have all been paid, keep it that way. Resist the temptation of accumulating unnecessary debt.
Think twice before quitting your job
While we may dream of winning the lottery in order to avoid having to get out of bed and making our way to work every day, quitting your job is not a wise decision. If you quit your job, you will lose your regular income and other benefits offered by your company. This means that you might end up spending more money to maintain and improve your current lifestyle, eventually leading to your windfall going to waste.
Speak to a financial advisor
When receiving a windfall, you need to think about your estate planning, lifestyle and investment objectives. At National Debt Advisors, we recommend that you speak to a certified financial advisor who can assist with achieving your short and long-term goals.
Save money for emergencies
Having an emergency plan is extremely important, especially in unforeseen circumstances. Having a windfall is the perfect opportunity to save money for serious expenses, such as a medical emergency.
NB: A good rule of thumb is to save enough money to cover six months living expenses. However, the savings must only be accessed in the event of serious need.
Once you are able to understand the psychology of dealing with a lot of money, you will take the right steps towards protecting your windfall. Consider every financial decision carefully in order to avoid being indebted in the future.