There are occasions, when one gets unexpected cash inflows. For example, your organisation may give a substantial hike to be in par with the industry or you may get twice the normal dividend from a company because of their platinum anniversary and so on. The question is how you utilise such unexpected cash inflows applying the 'simple and happy' approach to improve your Personal Finance.
The following is one such recommended approach:
- Use 40 % for your current needs including celebration;
- 10 % for charity &
- 50 % in Stock Market for long term.
Celebration need not be big. The essence of our 'simple and happy' approach is small celebration without any overwhelming. This is in contrast with what many people seem to do viz., have a big bash.
Charity may be for a cause you like most. This is one way of repaying to the society, since we consume a lot from the society.
While in investing in the Stock Market, you may choose equities of companies with wealth-creation track record. It is essential that you invest in equities with a long term perspective of at least five years. Since the basic investments are out of unexpected inflows, you need not bother about fluctuations in the Stock Market.
Of course, you will always clear with your Financial Mentor on the above recommended approach.
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