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Investing a windfall? Consider these 10 tips.

Author: Kirsty O'Hara

Written: 22 07 2022

4 min read


Looking for the Retirement Guesstimation article ~ click here to view.

To learn how to invest windfalls, read on:

Investing bonuses, tax returns, inheritance, and other windfalls.

Whoop whoop! An unexpected lump sum of money just landed in your bank account. Now what?!

You may have received a work bonus, ch-ching! Or maybe a tax return swung your way, providing an unexpected tax credit. In other circumstances mixed emotions may be felt, when receiving a lump sum of inheritance.

Whatever the windfall source, you may find the pressure (and temptation) around what to do with this money can be a source of anxiety. Some popular questions we hear at Flint include:

  • How do I invest a windfall?
  • What happens if the market goes down?
  • Should I wait to invest?

The motivation behind these questions all centred around the uncertainty factor and bridging the information gap. If you’re sitting on the fence about what to do with a windfall, then enjoy a read.

Please note: the following tips are guidance and opinion only, and you are not guaranteed to make money.


10 Windfall Investment Tips:

1. Take your time

If a windfall has landed in your bank account, there is no harm in leaving it there while you spend some time navigating emotions and due diligence. This is especially true when experiencing grief.

If you are new to the world of investing, take a big breath, and start slow. Definitely consider drip-feeding funds into investments, and put yourself in situations where you can continue to learn more about investment options.

If you are considering any investments on Flint we encourage you to deep dive into the RIPPL effect reports, fund PDS documents, and digital tear sheets. This can take time, so give yourself permission to take some time.

2. Reassess your safety nets

Before you allocate every penny of a windfall to investments, now is the perfect time to look at your emergency savings, and see if these are adequate for your current age and stage. The general rule of thumb recommended for emergency funds is the equivalent of 3-6 months of expenses. Obviously, this can be tweaked on a case-by-case basis, depending on your personal monthly expenditure and financial commitments.

It's generally recommended to deposit these emergency funds with a different bank (or at least in a different account) from your everyday banking, to ensure they are kept out of sight and help you to avoid splurging temptations.

The reason it’s important to have this safety net sorted, is that it’s less than ideal to have to exit an investment earlier than you had originally anticipated because you urgently need the cash. The only time we truly lock in losses is when we ‘sell’. By having an adequate safety net tucked away, it can help protect your investments from being interrupted during a market dip.

3. Reduce Debt or Increase Investments?

Before investing it also can be worthwhile assessing any debts you may have.

Some investors benefit psychologically by paying down their mortgage with large lump sum repayments, or by making use of an Offset or Revolving Credit facility - which in turn frees up income no longer required to service large mortgage repayments.

MoneyHub tackle the question: should I pay down the mortgage or invest by suggesting:

“It depends on what you prefer - lower mortgage repayments or a nest egg not connected to your home? The benefit of a lump-sum mortgage repayment is that you'll lower your ongoing costs, which lets you invest every month. However, taking a sum of money and investing it for the long-term in the right fund or basket of shares has the potential to be very rewarding. If you're in doubt, you could pay down some of your mortgage and invest the rest”.

4. Drip-feed cash into investments

Instead of investing large chunks into one managed fund or investment opportunity, consider drip-feeding investments over the upcoming 6-24 months into a variety of investments. Eg. You might deposit $2000 a month, until the full windfall is invested. 

By taking a slow and steady approach, possibly across more than one provider, you can mitigate the risk of the market falling, immediately after you have invested your entire windfall.

This strategy also mitigates decision paralysis.

5. Diversify across providers

At Flint you can easily diversify across fund providers.

With the ease and convenience of fintech solutions (such as Flint) diversification across fund providers is no longer a privilege for the wealthy. Fund managers have been able to lower entry thresholds, that previously required thousands of investment dollars to invest, meaning we can all create diversified portfolio’s no matter our income, age or stage

Technology has been able to make investments more accessible for all (at Flint you can get started and invest in managed funds from $50 per fund).

6. Managed funds vs Shares?

In many ways a managed fund can be considered a lower risk investment than trying to time the market or hold single shares in individual companies. By considering managed funds, the theory holds that your risk is spread across the entire holdings list of the fund manager – which can sometimes include hundreds of companies.

MoneyHub sum up the pro’s and con’s of managed funds:


  • Managed and index-tracking funds outsource investment management to experts or a robust strategy (such as following the S&P500).
  • It's a set-and-forget approach, saving you time.
  • Long-term results will, generally, exceed any savings account.


All investments are risky, and in the short term, the value of your money may fall in value.

Chris Walsh of Money Hub comments: “How you decide you invest will depend on how much volatility you can handle. There are dozens of active and index-tracking funds with a proven track record, although past performance does not guarantee future returns. Shares require more judgement and close monitoring and also intensify your risk. As outlined in our guide, the wealthiest New Zealanders invest heavily into funds and trust their investment manager to provide long-term returns knowing that the short-term can be up and down”.

7. Look for investment opportunities.

In any financial market there are always opportunities for consideration. When the general population is feeling uncertain, there could potentially be opportunities to buy funds at a lower unit price - which in effect means your windfall can buy more units than it might have at other points in time.

8. Know your time horizon:

We’ve talked about this one before, however it really is key to decide if investing is the right fit for your windfall.

Before making any investment, every investor should confirm their exit strategy and be realistic about when they will need this money back. If you need the cash in 1, 2 or 3 years – it could be worth checking out the Money Market cash funds or Conservative funds available on Flint. The PDS for each fund will include appropriate time horizons for each of these investments.

For anyone who is wanting to withdraw funds within the next five years, you need to clearly understand the investments you are considering and complete due diligence around the risks of investing. This is especially important if you require these funds in the immediate future (eg. to buy a house, or actively live off in retirement).

For those with a time horizon longer than 10+ years you may feel reassured to note that, generally speaking, as long as you can hold steady and play the long game (without losing everything) then you should be in a position to allow time for any short term market volatility to recover and bounce back.

9. Know your values

Choose companies or managed funds that include businesses you want to support and continue to see doing well. Holding investments where your heart and values align can sometimes help to get through any short-term market turbulence; with the underlying psychological buffer that you want to see a particular sector supported.

10. Stay Calm

Flint has talked about this topic before in our 7 Tips to Stay Calm during Market Uncertainty blog which is a great read, if you want to better understand loss aversion, dollar cost averaging, and some other tips that foster a calm investment attitude.

In Conclusion

While the above tips offer insights into ways to manage your approach and create some buffers, it is in no way a how to guide to avoid losing money. Market volatility from time to time is always going to be a given in the world of investing.

We encourage you to learn as much as you can about investing, research the historical performance and investment philosophy of the managed funds you are considering, and always make sure you are investing money you can afford to lose if all went south.

For many investors, just knowing that market volatility is part of the game, can have real psychological benefits - and with the right attitude we hope that all investors who have Flint portfolios can hold steady and feel confident in their DIY investments.

If you found this blog post helpful, please like on social or share with someone you know. Flint Wealth is super grateful for the support of our investment community to foster a more financially resilient future for New Zealand investors. Thanks for being a part of these conversations.

Happy investing!




All content shared is of a general nature, current to the time it was penned, and is not financial advice. Before making any investment decisions, please be sure you have completed full due diligence. This should include reading the product disclosure statement (PDS), considering fees and taxation, identifying your time horizons, and understanding the performance history and reputation of the investments you are considering.

Please note: When investing you are not guaranteed to make money (and on occasion you may lose some or all of the money you began with). Seek independent advice to establish if an investment is suitable for your financial situation and long-term wealth generation goals.


MoneyHub, Sorted-Windfalls, Barefoot Investor, Sorted managed funds guide, Forbes, Investopedia, Morningstar.