Life has its ways to test our character by throwing situations at us where we need to take decisions which would impact our future. This applies to our financial matters too. May a time in life, will get unexpected profits, or windfall gains, and those are the times when our handling of that money will decide our future.
Assume you are gambling in a casino and have hit a jackpot. In this situation, a person tends to bet the money earned thinking that it is not going from his pocket. The same applies to investors. One may earn higher returns than expected in an invetment and he may reinvest that money in more risky instruments, hoping to earn more.
What should you do?
All you need is a clear perspective in such moments. Take a moment and think how you can benefit with those windfall gains. The money is yours and you can and should use it to make your future secure. It would be better than taking a chance with that money. Try and find a good savings plan to secure that gain.
Improve your future goals
You may have some future goals in mind such as buying a house, a car or taking a vacation abroad. Imagine how much that unexpected profit can do for those goals. Remember to always think long term. Saving is the biggest part of any financial plan. It is extremely important for a secure future and helps to create an emergency fund because you will never know when life takes a different turn. Any disease or accident can cost you heavy and you must always be prepared for a rainy day. Putting that profit in your saving/emergency fund is the best thing to do.
You can invest the unexpected gains but first ensure the safety of the investment. Mutual funds or fixed income plans can be your best choice. However, if you do want to enjoy that money, balance the act by spending only a small percentage and saving the bigger component.