Here’s a guide to making the most of a windfall—how to wisely invest sudden wealth while still enjoying life.

1. Take Your Time

• Avoid rash decisions: A windfall can be exciting, but it’s essential to take your time before making any investment decisions.
• Consider your goals: Think about how this money can help you achieve long-term financial objectives, such as retirement, buying a home, or funding education.

2. Pay Down High-Interest Debt

• If you have credit card debt or other high-interest loans, it’s often wise to use part of the windfall to pay these off. Reducing debt will free up more of your income for future investments.
• Emergency fund: If you don’t have an emergency fund (typically 3 to 6 months of living expenses), consider setting aside a portion of the windfall to create one.

3. Set Clear Investment Goals

• Short-term vs. long-term: Decide what you want your investments to achieve. Short-term goals (1-3 years) may need more conservative options, while long-term goals (10+ years) can handle higher-risk investments.
• Diversification: Spread your investments across various asset classes (stocks, bonds, real estate, etc.) to reduce risk.

4. Consult a Financial Advisor

• A financial advisor can help create a strategy tailored to your goals, risk tolerance, and tax considerations. Cantor Fitzgerald Ireland’s Financial Planning team can build a financial plan tailored to your personal circumstances.
• Tax considerations: Be aware of the tax implications of investing. Depending on the size of the windfall, taxes could take a significant portion of it.

5. Live a Little: Treat Yourself Wisely

• Plan for Enjoyment: While it’s important to prioritise financial security, it’s also essential to live a little and treat yourself. Set aside a portion of your windfall for fun experiences or luxuries you’ve always dreamed about—whether that’s travel, a new car, or a hobby you’re passionate about.

6. Regularly Review Your Plan

• As life circumstances change (marriage, children, career shifts), your financial goals may evolve. Regularly revisiting your investment strategy will ensure that your plan stays aligned with your needs.

How you choose to invest that money can significantly impact your financial future. Investing a windfall successfully requires a thoughtful approach to ensure that your newfound wealth is used wisely.  For example, for long term assets here’s why investing in a multi-asset fund could be a better option than simply placing the windfall in a deposit account:

1. Higher Potential Returns

• Multi-Asset Fund: These funds invest in a diverse range of assets, such as equities (stocks), bonds, real estate, commodities, and alternative investments. One of the longest running funds in the Irish market is the Cantor Fitzgerald Multi Asset 70 Fund which was launched over 30 years ago and has returned an impressive 2,202% (10.6% p.a.)* return since inception.
• Deposit account: A deposit account, whether a savings account or a fixed-term deposit, typically offers much lower returns which means your money may not grow as quickly.

2. Diversification and Risk Reduction

• Multi-Asset Fund: One of the core advantages of a multi-asset fund is diversification. By spreading your investment across various asset classes, you can reduce the risk of relying on one asset class, such as stocks, performing poorly. Different asset classes tend to perform differently in various economic environments, helping balance overall risk. Having an Active Multi Asset Manager such as Cantor Fitzgerald Asset Management help navigate you through these market environments is crucial. For example, the Multi Asset 70 Fund can hold 60-80% in growth assets with the balance in Defensive assets. Manging this asset allocation in real time on your behalf can assist in generating growth for your windfall.
• Deposit account: A deposit account is very low risk, but it is not diversified. Your money is essentially just sitting in one place earning interest, without the potential to take advantage of market growth across different sectors.

3. Hedge Against Inflation

• Multi-Asset Fund: Inflation erodes the purchasing power of your money over time. While some fixed-income assets, like bonds, may not keep up with inflation, equity investments and commodities in multi-asset funds can serve as a hedge. Historically, the Cantor Fitzgerald Multi Asset 70 Fund since launch has delivered an impressive 2,202% (10.6% p.a.)* return comfortably outpacing inflation while providing real growth. All three of our multi asset funds currently have a maximum 5-star rating from Morningstar- a global independent agency. To achieve this maximum rating the fund must be in the top 10% of similar funds throughout Europe on a risk adjusted returns basis.
• Deposit account: With inflation often outpacing the interest rates on savings accounts, the real value of the money in a deposit account could diminish over time. This means your windfall might not maintain its value in real terms.

4. Liquidity and Flexibility

• Multi-Asset Fund: The Cantor Fitzgerald Multi Asset Fund range provides relatively easy access to your money if needed. You can sell units in the fund daily offering a level of liquidity. There is also the flexibility of utilising the Gross Roll Up regime whereby you could switch allocation to different funds in the investment structure without triggering tax until a chargeable event occurs. For example, switching units from the Multi Asset Funds to a Cash or Bond Fund.
• Deposit account: While some deposit accounts are highly liquid, the interest you earn may not significantly contribute to growing your windfall. Also, in some cases, there might be penalties for withdrawing from fixed-term deposits before maturity.

5. Capital Appreciation

• Multi-Asset Fund: One of the benefits of investing in a multi-asset fund is the potential for capital appreciation. The value of the assets in the fund can increase over time, which could result in significant growth for your windfall. the Cantor Fitzgerald Multi Asset 70 Fund since launch has delivered an impressive 2,202% (10.6% p.a.) * return. 2024 has been another excellent year for Cantor Fitzgerald Asset Management (CFAM). This culminated in CFAM being chosen as Equity Manager of the year 2024 at the prestigious Irish Pension awards held in November at the Mansion House in Dublin. The International Equity Fund is one of the most significant components of our three core multi asset funds and thus our clients in those multi asset funds have benefitted in 2024 from this exceptional equity fund performance
• Deposit account: In a deposit account, there is no possibility for capital appreciation. Your funds simply earn interest, and the value of your capital remains the same unless you withdraw it.

While a deposit account offers safety and liquidity, investing in a multi-asset fund provides greater potential for higher returns, diversification, and protection against inflation. Multi-asset funds allow you to tap into a wide range of investments that can grow your windfall over time, whereas a deposit account’s limited returns may not provide the same level of growth. If you’re willing to accept some level of risk for the potential of higher returns, a multi-asset fund can be a far more effective way to make the most of your windfall.

Fearghal Lawlor, Head of Business Development CFAM

* Source: CFAM as at 30.11.2024. Fund performance figures are quoted gross of all management fees. Performance shown above is from Inception of the Muli-Asset 70 Fund Oct 1993.

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