WINDFALL
What should I do with a large lump sum I wasn't expecting?
Geetha is a teacher and a single mother. She lost her only son in a car accident, and the insurance settlement that followed was worth several crores, with no guidebook attached.
THE SHORT ANSWER
Do nothing for ninety days. Park it somewhere safe and liquid, tell almost no one, and make no permanent decisions while you are still absorbing whatever produced the money. Then clear high-interest debt, fund an emergency buffer, and deploy the rest gradually rather than all at once.
Why the pause is the whole strategy
Large sums rarely arrive for happy reasons. An insurance settlement, a legal award, an inheritance, a redundancy payout. The money and the grief turn up together, and decisions made in the first weeks are made by someone who is not thinking clearly and would not claim to be.
Geetha received several crores after losing her son. Nobody handed her a guidebook with it. What arrives instead, almost immediately, is advice. Relatives with a property opportunity, an agent with a plan, a friend's cousin who knows about markets. Every one of them arrives early, because everyone knows the money is there.
The ninety-day rule
Put the money in a fixed deposit or a liquid fund the day it lands. Not a savings account, where it is too easy to reach, and not anything with a lock-in. Then do nothing with it for ninety days.
Tell as few people as possible. Not because anyone is dishonest, but because a widely known windfall attracts requests, and refusing them individually is far harder than never being asked.
If you must respond to someone who already knows, a single sentence works. The money is committed and you are not making decisions this year.
Then, in order
Clear every debt above roughly 12%. This is a guaranteed return and it reduces the monthly pressure that leads to bad decisions later.
Set aside twelve months of expenses as an emergency fund, kept separate from everything else.
Deal with the tax position properly. Insurance proceeds, inheritance and legal settlements are each treated differently, and a few thousand rupees spent on a chartered accountant at this point prevents a much larger problem.
Deploy the rest in tranches over twelve to eighteen months rather than in one transaction, which removes the risk of everything entering the market on one unlucky day.
The thing to protect against
The most common way large sums disappear is not a scam. It is a series of individually reasonable decisions: a flat for a relative, a business loan to a cousin, a policy sold by someone trusted, a property bought under pressure. Each is defensible on its own and the total is the whole amount.
A written plan made after ninety days, when you are steadier, is the defence against that.
ONE MOVE THIS WEEK
If a lump sum has arrived, move it to a fixed deposit today and put a date ninety days out in your calendar. That is the entire first step.
