TURN YOUR FESTIVE BONUS INTO DECADES OF WEALTH WITH THIS SIMPLE STRATEGY

Festive seasons often bring a welcome boost — the annual bonus. While many spendit right away, letting it grow can build future wealth. The tradition dates back to the British era, when companies compensated workers for lost income after shifting from weekly to monthly pay.

- ATUL SHINGHAL

This later became lawunder the Payment of Bonus Act, 1965, requiring employers to pay at least 8.33% of salary as bonus. Invested wisely, a bonus can fund goals such asa child’s education, a home, orretirement.

Many people quickly spend their bonuses on clothes, gadgets, orgifts, missing a chance for long-term growth. The challenge lies in perception — most see a bonus as extra cash, not core income, makingit easier to spend than invest. Yet, the real power ofa festive bonusis in investing it. Those who turn bonuses into lasting wealth often rely ona few simple psychological tricks: (i) Pre-commitment strategies: Deciding what todo with abonus beforereceiving it; (ii) Mental account separation: Thinking ofbonusas “payment to your future self” rather than “reward for yourcurrent self.” (iii) Visual progress tracking: Use charts or dashboards to see how previously invested bonuses are growing.