Coming into a lump sum of money — whether from a windfall, asset sale, or years of diligent saving — can feel both exciting and overwhelming. With opportunity at your fingertips, it’s natural to want to take immediate action. But when it comes to managing R1 million or more, the smartest first move is often to pause.

Whether you’ve sold a property, received an inheritance, or exited a business, here’s a five-step guide to making sure your money works for you — now, and in the future.

Step 1: Press Pause — Don’t Rush In

“Sudden liquidity can stir emotions: excitement, relief, and even anxiety. Acting impulsively can lead to short-sighted decisions.” 

Instead, park the funds in a secure, interest-bearing account such as a money market fund or a high-yield savings vehicle. This gives you breathing room to consider your options carefully without missing out on growth altogether.

This is also the ideal time to ask: What is this money truly for?

Step 2: Define the Purpose of the Money

Before you invest a cent, define the why. Understanding the role this money will play in your life allows you to tailor your investment approach accordingly.

A helpful strategy is to divide the capital into three time-based “buckets”:

• Short-Term (0–2 years): Emergency fund, upcoming expenses, or big-ticket items like travel or home upgrades.
• Medium-Term (3–7 years): Saving for a child’s education, a business opportunity, or a property purchase.
• Long-Term (7+ years): Retirement planning, generational wealth, or future financial freedom.

Each bucket will have its own risk tolerance and return expectations — which leads us to your next step.

Step 3: Match the Portfolio to the Purpose

The golden rule: Don’t invest long-term money like it’s short-term, and don’t leave long-term money languishing in cash.

Here’s a basic framework to consider: 

This layered approach balances risk with liquidity, ensuring that your money is available when needed — and growing when it’s not.

Step 4: Avoid Common Mistakes

When managing a lump sum, here are three pitfalls to steer clear of:

• Acting on urgency or hot tips: Emotional or rushed investing can derail your plan. Let your strategy — not the headlines — guide your decisions.
• Ignoring tax implications: Consider the impact of capital gains, interest, and donations tax. These can significantly erode your real return.
• “Set and forget” syndrome: Your goals and life circumstances evolve. Schedule regular portfolio reviews to stay aligned with your financial journey.

Step 5: Work With Someone Who Sees the Whole Picture

Investing is not a one-size-fits-all exercise. A qualified advisor can help you assess your goals, structure your buckets effectively, and optimise for tax efficiency — all while keeping your emotions in check.

Money doesn’t come with instructions. But with the right guidance, it can come with purpose, growth, and peace of mind.

"R1 million is a significant milestone — and a powerful tool when used wisely.”

Whether your goals are immediate or decades away, taking a deliberate and structured approach ensures your capital serves you and not the other way around.

If you’re looking to put your money to work in a way that reflects your goals, time horizon, and values, the NFB Private Wealth team is here to help.