When we find ourselves faced with an unexpected sum of additional funds, we often feel as though we just received a huge bonus from the universe. Windfall spending syndromes are fairly universal when it comes to receiving a special surprise monetary award, even if it isn’t anything more than discovering an extra $20 in the laundry. We view windfalls as additional money, extra money, and easily spendable money. When we get a fresh windfall, we often ask ourselves how we would like to spend the money, not if we are interested in spending the money. And in most cases, we like to purchase things for ourselves that we normally wouldn’t under regular financial conditions.

A windfall isn’t really useful if you decide to blow it. When applied to trading, a windfall is now income. You have earned this money in the same way that you probably once earned a paycheck. When we view things as income, we generally don’t like to just blow through our regular paycheck. It makes us uncomfortable. So why then, would we convince ourselves that income, even significant income, that we receive as a direct result of trading (doing our job) would we want to spend it frivolously?

Since you earned this money by applying tested techniques, making sound decisions based on an investment strategy, and by carefully assessing our risk tolerance, how does it serve you to determine that you can now make more frivolous and whimsical decisions when it comes to taking risks with our next investments? While risk taking is part of developing a good investment strategy, adding increased risk just because you have a little more money doesn’t help you get to where you want to go in the future.

There are many who make the argument that it takes money to make money, and thus when an unexpected amount of money comes your way, you should invest it stocks that you feel have the greatest potential to create more wealth. To some traders, the greatest potential comes from those stocks with the higher risk factors. After all, the more risk involved the greater the returns one normally sees. While this viewpoint holds water, it isn’t quite on the mark when it comes to the mentality behind the desire to spend and risk the money.

When we spend money with the belief that it isn’t really ours or that it is in some way “extra” we are implying that not only do we not really need it, but its value isn’t the same as money we need and have worked hard to earn. A windfall is most certainly needed and you did work very hard to earn it. Holding onto the belief that it is extra allows us to treat it with less care than money we feel is ours and was earned through some blood and some sweat.

The most productive method of determining what you would like to do with an unexpected windfall is to put it in with the same lump of money that you are using to trade with. From there, it becomes part of your cash account. As you continue to go through your strategies and your trading decisions, taking ownership of the money helps you to keep yourself on track when it comes to a greater figure. Obviously, you’re on the right track.

Otherwise you might never have done so well in the market to begin with. If you are on the right track enough to pull in such a profit, then wouldn’t it make sense to stay on the track that you have started down and continue pulling in profits as often as possible? That way you aren’t taking unnecessary risks, you are treating the money like it is your own, and you are making decisions based on your rational thought processes and strategies rather than from a place of excessive caution or excessive risk taking.

We all have the desire to really hit it big and to test ourselves. Testing our skills against some of the more difficult trades to interpret can be rather beneficial. However, if you choose to take this path in order to further your own self confidence or to engage more openly with high risk trades, make sure that you are doing it from a place of complete ownership. If you have underlying issues like not feeling as though you really deserve the money or that you are fearful of something in the unknown future, address those issues without using the extra money.

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