We’re going global this time around and taking a look at global politics as a case in point. We’re talking financial management, but opening with a look at financial management at perhaps the grandest of levels, which is that of the finances of sovereign states.
The wealthiest countries in the world are those which have a selection of industries in which they dominate – industries which they’re known for. They also have the advantage of having benefitted from a huge capital injection or generation, so that comes together with industries they become known for dominating.
Some of the wealthiest nations are cashing in on natural resources, which they export in exchange for what can be considered to be disposable cash, but they often struggle to develop beyond that structure. This is especially true in the case of countries that have gained some kind of independence and the powers that be have been on a honeymoon since, mismanaging the state coffers which they could have rather used for the development of their nations. These people pretty much demonstrate the need for every single individual to have a plan for the handling of large sums of money they may or may not come into, because planning for one’s finances in this way puts you in the best position to grow in value whether or not you do eventually get the windfall.
Everyone eventually gets a windfall
It’s true that everyone who is an economically active member of society eventually gets a windfall, one way or the other. Sure, a more official definition of a windfall is that which is centred on receiving a large amount of money within a short time frame, often instantly. So you might be a lucky winner of the lottery or receive an inheritance, or something along those lines.
The broader and more practical definition of what a windfall is, however, includes receiving large sums of money over a longer period of time. That money is essentially delivered to you, in many different ways, intermittently and throughout your life.
So you might spend your down-time enjoying some of the best online slots available via your connected device, in which case the cumulative winnings you gather are just as much of a windfall as those winnings you would have come into through catching one jackpot!
It’s all about perspective, which brings us to the need for a solid plan to handle this major windfall, no matter which way it comes.
The best way to plan for your windfall
The best way to plan for your windfall is by putting into place a financial plan that has you simulating exactly what you’d do if you got the lump-sum version of the windfall as soon as tomorrow. How would you spend it? What percentage would you invest? Would you put some aside for pure leisurely pursuits?
It’s important to have a solid plan in place, because if you don’t, you’ll find yourself in the same position as the politicians who squander lots of public wealth as they get caught in that window wherein they’re overwhelmed with the prospect of having to handle such large sums of money.
It’s very difficult to recover from that precarious window, so be prepared for your coming windfall.