Have you hit the jackpot? Here is how to spend it

In the past few days something has excited most Kenyans more than the usual political bickering that dominates the bulk of our news. This is the story of one Brother Peter Tabichi.

Brother Peter, a member of the Franciscan religious order and a teacher from Nakuru County, won the 2019 Global Teacher Prize that came with a cash award of Sh100 million.

Something that caught the attention of many people and even generated some debate are the conditions that came with the prize.

It is reported that Varkey Foundation, which awarded the prize in recognition of Tabichi’s exceptional service to the community would give him the cash in instalments of Sh10 million per year over 10 years.

In addition to other conditions, he will be required to attend financial counselling sessions and remain in the same teaching environment for a period of five years.

Most people are wondering about the rationale of these conditions. Well, judging from past similar cases, instant wealth or windfall if not managed well leads to ruin.

Basically, when one jumps into fabulous wealth overnight what comes into mind is a future full of possibilities of never having to lack or to toil, ability to spend quality time with family and friends, help those in need without limitation and lead a life free of financial worries.

Unfortunately, ‘happily ever’ after doesn’t always become a reality. Majority of those who land into financial windfall end up worse off than prior to landing the cash. In business windfalls in form of a big tender, an expected business boom or initial fast business growth, if not well managed can equally lead to financial ruin. One can lose that money just as fast and fail to recover.

Cases of businesses that initially did very well before sinking into debts, poor sales and bankruptcy are not few. Post mortem of such failure often reveals that the victim fell into temptation to think that life would always be like that and forgot that this could a temporary thing that may be followed by long dry period.

So, what must you do if you if you land a windfall?

First don’t rush to spend. The fact that you have won a big tender does not mean you rush to buy a home or sign up mortgage, buy dream car or take your family out for a shopping holiday.

Unless it is in public domain, don’t shout about it. Keep quiet and continue with your normal life for some time as you get composed to develop a rational spending and investment plan.

Second, if you have debts pay them off.

Third, prepare a financial plan. You may need to consult few financial experts on this. Do not trust your gut or take advice from all and sundry. Finally, don’t forget to invest in yourself. This is the best investment and an axis around which everything else revolves.