Are you ready for the Big Money?

Gong Xi Fa Cai!

May the Tiger Year bring you progress in your financial journey.

Over the past several weeks, Aunty Scroogey has seen hordes of people queuing up at the Toto booth, hoping to strike the jackpot. The Aunty just hope that these winners are equipped with adequate knowledge of how to manage their ‘big money’.

Click on these links to read about lottery winners who are eventually left penniless (or almost).

Jobless man blows $390,000 in 6 months
Teen spent all of her Lotto fortune in few years
13 million windfall long gone

We’ve talked about how to handle small money – that is, money that you earn on a regular, recurring basis, which may not be large in amount (eg monthly salary). And the best way to handle this would be to apportion it in the ratios 70%, 20%, 10% ( or whatever ratios that you are currently living on, say 60%, 20%, 20% or 80%, 10%, 10%.

How then do we handle big money such as bonus, lottery winnings or a windfall gain from selling your house? Assuming no debts to settle, it would be sensible to apportion it in the reverse of your small money ratio. In Aunty Scroogey’s case (where the small money ratio is 70: 20: 10), the Aunty typically uses her annual bonus in the following way: 70% – savings/investments, 20% – payment of income tax & charity donation, 10% – for purchase of frivolous items. The key point is, make sure you have a plan of how to deal with your big money before you lay your hands on it. Without a plan, you might just lose track of the amount you spent and before you know it, there’s hardly anything left. Do remember – financial planning is not an option, it is a responsibility.

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About admin

I hail from a little red dot on the South China Sea call Singapore. Am an extroverted introvert and notorious for nothing and everything. I often suffer from logorrhea so please do not take what I say too seriously.

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