Agony Aunt: How to use a windfall

If you came into some money, would you put it into KiwiSaver, a high-interest savings account or a managed fund? TS

I'm a big advocate of all three, but it's a bit like listening to a nutritionist rattle on about fruit, nuts and flaxseed oil.

If you're in good health, and have no history of heart conditions, a cream bun is to be enjoyed now and then. The same thing should apply to money.

Go and buy a bag of buns and set a little bit of that money aside for you.

While we lament the spending culture of today's society, it's important to remind the squirrels to celebrate their good fortune.

There is a Kiwi tendency to have five seconds of euphoria followed by a good measure of guilt. We hide the cash, and tell no-one for fear of being labelled a flash harry.

All very honourable, but ridiculous in hindsight.

Now back to the fruit, nuts and flaxseed oil.

You'll know full well I have the strong arm of the law hovering over my head and need to make sure you don't interpret this as personal advice - as obvious as it seems when you've asked such a generic question with no detail, it must still be said.

Here are 10 quick tips for you to ponder:

1. Most people need a combo of short term cash, medium term investments and long term retirement plans. It's rare to tip all your cash into one vehicle.

2. Slamming financial advisers has become a national pastime, but don't under-estimate the stress in going solo (even if it makes Gareth Morgan squirm).

3. Have you cleared all your debts? That's generally the first priority.

4. Spread risk (different assets and providers).

5. No cash savings in the bank? A high interest account is a priority for some of the money. It's liquid and low risk.

6. KiwiSaver is widely regarded as a no-brainer for most due to the $1000 kick-start. A lump-sum can be invested directly or via the IRD. A word of warning; this money is tied up until you are 65. Read that one again; 65. Get-out clauses are limited and it could be a long wait, so don't throw all your cash in. Some require regular contributions.

7. With KiwiSaver or equity funds, consider breaking your lump-sum into parts. Investing at different times spreads market risk (the jargon is dollar cost averaging).

8. Make sure you've considered your employer's super-scheme.

9. Think about starting a KiwiSaver for your partner, children or even grandchildren.

10. Funds: to play open-cards, I'm in the funds management industry, so they excite me, but they're not for everyone and they're bottom of the list after a stash of cash and a KiwiSaver.

Your options range from a stockbroker putting together a portfolio of shares or bonds for you, through to investing in a variety of local or international funds run by managers.

These tend to require a five-year time frame due to the risk involved.

Some will offer capital protected alternatives.

Janine Starks is a financial commentator with expertise in banking, personal finance and funds management. Opinions in this column represent her personal views. They are general in nature and are not a recommendation, opinion or guidance to any individuals in relation to acquiring or disposing of a financial product. Readers should not rely on these opinions and should always seek specific independent financial advice appropriate to their own individual circumstances.