By John Kariuki
With the intense business competition and low buying power, occasioned by the high inflation rate, many companies are doing everything in their power to retain their customers.
And so everyone, from mainstream banks, televisions, newspapers, mobile phone service providers to supermarket chains, businesses are giving out freebies and making people instant millionaires.
Personal finance experts say that while sudden affluence can take care of a winner’s needs, extreme monetary caution is needed lest the victors go on destructive ego trips.
Some lottery winners have been known to go on acquisition sprees, buying household goods, flashy cars and clothes, and even taking on extra lovers.
Sudden riches often bestow the costly privilege of sitting in neighbourhood committees and councils on some people. This silent power gets into their heads, and soon they waste their finances on all social causes.
Disregarding all social decorum and financial advice, such sudden millionaires plunge into a cascade of monetary mistakes that culminate in their bankruptcy.
strike a balance
So, what should people do with the sudden income if and when they win the lotteries?
Felistas Waringa, a personal banker, advises people who win big money to strike a balance between setting something aside in an emergency savings account and paying their existing debts.