By Babajide Komolafe

As mentioned in the last edition, you should immediately invest all your windfall in a money market mutual fund so that it can begin to yield income. However, depending on the size of the windfall, you should not concentrate it in one investment. You should plan how to use the windfall.

The windfall can be divided into four areas: Emergency Fund, Income Generating Fund, Growth Fund, and Lifestyle Improvement. Assuming your current annual income is N3 million and you receive a windfall of N15 million. It is also assumed that your current income covers your living expenses. How do you deploy the windfall to create wealth?

If there is a need to use part of the windfall to improve your lifestyle, you can allocate five per cent or less. This should be done in a way that reduces living expenses over time. For example, installing a solar system for power supply to reduce electricity costs.

You need an Emergency Fund for sudden, critical situations that urgently require funds beyond what your regular income can provide. You can allocate 25 per cent to such a fund. The investment should be safe, secure and easily accessible. A money market mutual fund is recommended for this purpose.

If you desire or have plans of establishing a business or side hustle to create an additional source of income, you can allocate another 25 per cent, but not more than 30 per cent, to finance it. This is to minimise losses in case the business fails or does not perform as expected.

The largest portion of the windfall, 40 to 45 per cent, should be invested in growth investments, where value appreciation is expected over time. For this purpose, you can buy land or property, provided there are valid documents that guarantee ownership and the safety of your money. The value of such investments can double or triple within three to five years, depending on location.

Alternatively, you can invest this portion in the stock market by buying shares of companies with established records of dividend payments and price appreciation. You can also invest in a stock-based mutual fund. The stock market grew by 443 per cent between 2016 and 2025, representing an average annual growth of 44.3 per cent. It has also risen by more than 50 per cent so far in 2026.

The main lesson is not to keep all your eggs in one basket.