When I have plenty of money in hand available, which is the correct choice?

  1. is it better to pursue new investments?

  2. To do things that were not done in previous days?

  3. Donate to charity?

  4. Upgrade my lifestyle?

My question is not how many of these things I should do. My question is, rather, how much of each should I do in order to not face issues in the future


Welcome to money.SE Mohamed.

First off congratulations on recognizing your good fortune and trying to plan how to best use it instead of just spending it right away.

Now onto your specific questions:

  • Pay off high-interest debt, this will be an anchor keeping you down during bad times, if not taken care when the going is good like you describe things now.

  • Get an emergency fund together at a high-interest savings account that is always available in case of medical or any other type of misfortune(losing your job etc).

  • Don't forget to pay yourself first, meaning that you keep a portion of your salary that is automatically diverted into an investment account to be dispensed according to your profile(years left to retirement as well as your risk profile).

  • Lifestyle upgrades are always nice, but for a limited time only, then they become mundane and part of the everyday. Put real thought into this before you make any spending towards this. Remember its always easier to cut expenses than increasing your income. And if anything, if you re content with your life at an X level of income, then going to X+Y, just means you can pour all of that extra new income into your investment account altogether.

  • Charity comes down to the individual, but its definitely a good idea to share your good fortune with others the years you re fortunate enough to be on a positive flow. Just things to keep in mind are to choose carefully the carrier to receive your donation as well as to keep the receipts since for most countries(if not all), donations are incentivized as tax deductible items giving something back to you as well.


Also, depending on what country you live in, there may be tax-advantaged retirement accounts available to you - for example the US has IRAs and Roth IRAs (only useful if you have earned income). It's strongly advisable to use tax-advantaged accounts for retirement funds, if available.

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