Cash Windfall? These Strategies Can Make Your Money Work For You!

Apr 22

Some of us are lucky enough to be the beneficiary of a significant cash windfall. Usually, this happens as a result of a relative or friend passing away and leaving us some inheritance money. Other times, it might be because we’ve sold something of high value, such as property.

Once you’ve got that cash in your bank account, you might be wondering what to do with it. Spending it is one option, of course. But then you’ll end up with little to show for it, save for some material possessions! Saving it is another option. But with interest rates so low these days, it hardly seems worth the effort.


Image obtained via Flickr

If you’re willing to take a risk with your money, there are plenty of ways to make your cash work for you. No, I’m not talking about “betting it all on red”! What I am talking about is using some logical strategies to invest your money for medium to long-term gain. Here are a few examples of what I’m talking about:

Clearing your debts

OK, so paying off any loans or credit cards you have balances on doesn’t seem like much of an investment. Or does it? If you wipe the slate clean, as it were, you are in a better financial position.

Using the money you would have paid towards your monthly installments, you can build up a large reserve of cash. Some of that money can get put in savings while the rest can get used as leverage towards investments.

Commodity and Forex trading

Two of the biggest markets that people buy and sell on each day are commodities and forex. The former refers to things like gold while the latter is foreign exchange – i.e. currency.

They aren’t as risky as conventional stock market trading, and you stand to make more of a profit on those two markets. With a plethora of online services like ACM Gold & Forex around, you can manage your money from anywhere in the world. As long as you’ve got a computer and an Internet connection, of course!

Peer to peer lending

Another way to make your money work for you is by lending it to other people! Thanks to the relative explosion of peer to peer lending in recent years, it’s now possible for anyone to become a lender.

The great thing about peer to peer lending is that you can choose how much risk you’re willing to take. For example, you’ll get a higher return on your investment if you lend to people with riskier credit records. Of course, the only downside is that if they default on their payments, you could end up with no money.

Despite that fact, there are systems in place to reduce such risk. All loan applicants are carefully screened. This includes performing affordability checks on them by the lending organization. Some places might ask applicants for guarantors to increase peace of mind.

So, what will you do with your cash windfall? Whatever you do, make sure you don’t spend it all without seeing some kind of return!