CAPE TOWN - We all dream of that phone call announcing that we’ve won a large sum of money or inherited a small fortune from a distant relative, but do we really know what we would do with our unexpected windfall? Although we may be tempted go on the shopping spree of a lifetime, the smart thing would be to invest the money so that it sets us up for financial growth.

Consider taking care of all of your debt so that it no longer drains your financial resources. Tackle the debt with the highest interest rates first and pay off your interest-free loans last. Mortgage bonds are often at the lower end of the interest spectrum, while credit cards are typically at the top. The bottom line is, don’t throw good money after bad, and ensure that killing debt remains your number-one priority.

Liquidity is also a key factor to take into account, and you should have access to an emergency fund if anything goes awry.

If your debt is covered and you have liquid reserves on call, it’s time to consider your long-term financial goals. Before deciding on the asset classes you want to include in your portfolio, carefully consider your risk profile. If you are close to retirement, low-risk investments are key, whereas if you are at the start of your career with many working years ahead, you can afford to take on greater risks that may translate into better returns. Ultimately, your asset allocation should be defined by your risk appetite, which, in turn, is driven by the time you have left in the market.

Plan for market volatility by including a good spread of asset classes in your portfolio. In this way, your portfolio will retain its value even when disaster strikes. It’s also important to note that offshore investments must be factored into your portfolio, particularly in the current political and economic climate.

While making sure you are in a safe space financially, it’s important to factor in the fun. Denying yourself will only lead to greater temptations to overspend later, so don’t feel guilty about reserving a small percentage of your windfall for yourself and your family. Your long-term goals should, however, always remain at the top of your agenda.

In summary, if you receive that dream phone call, be sure to pay off your expensive debt first, set aside a liquid emergency fund that is permanently on call and invest the remaining amount across a spread of risk-appropriate asset classes. And last but not least, don’t forget to have some fun.

Jo-Anne Bailey is the sales director and country manager for Africa at Franklin Templeton Investments.

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