Wouldn’t it be nice to tell your boss at that dead-end job you have that you quit because you won the lottery?
The national lottery has created over 4,000 instant millionaires since 1994.
Some people have gone on to compound their winnings so much so that they would never have to work for anyone ever again.
However, some people have squandered their winnings and lost their millions in a matter of months. What would you spend lotto winnings on?
The couple left their respective jobs immediately and went on a Mediterranean cruise. They paid their mortgage when they came back from their cruise and bought a new house in Somerset.
They also bought their 20 year-old son a used Vauxhall Astra to replace the car that he had totalled. Some of the lottery money went into helping pay for their son’s university fees.
The Hardwares invested in three more properties and a caravan. The couple were also able to put away a portion of their money towards the education of their grandchildren.
Nigel Willets who was a 49-year old pub landlord won £1m from the lottery in 2014. He celebrated with an all night pub lock-in. He took his girlfriend to Venice, where he proposed to her. He then bought a Range Rover Sport with £96,000, paid off his mortgage, bought another house and took 13 family members on a holiday to Florida.
He also visited Mexico and Dubai and celebrated his 60th birthday is sin city. He invested some of the money in a trampoline center and has been working to grow the business and expand it across Europe.
Matthew Evans, a 35 year old former postman from Barry in Wales won £2.6m. He used the money to buy a new kitchen for his sister and bought his father a new car. He also bought a house in the Vale of Glamoran. As a major sports fan Nigel treated himself to a trip to the US for the National Football League, paid for a box at Cardiff City Stadium and travelled to Cyprus to watch Wales play in a football match.
There are some things that these previous UK lottery winners have in common with each other. The lotto winners all left their jobs, bought a new house, a car, spent money on family and took vacations.
These winners were prudent with how they spent their money. How would you spend your lotto winnings if you were lucky enough to choose the right combination of numbers.
Naturally, you would assume you would never have to worry about money, but the truth is, if you don’t have a well thought out plan you could end up like the many previous winners who needed up bankrupt and destitute.
For example: John McGuiness won a £10million jackpot and spent £4m on the ill-fated Livingstone Football Club. He did the same things that others did. He bought a house, cars, went on holidays and gave some to family, but in the end he found himself £2m in debt.
Michael Carroll blew the £9.7million won in 2002. After eight years of lavish spending he declared bankruptcy. And then there is Roger Griffith’s who won £1.8m in 2005 and lost it because of reckless spending and dodgy business investments.
#1. Spend your money wisely. Of course the temptation to buy things you could never afford will be there. It is easy to fritter money away on designer clothes, cars and boats, but ask yourself if having any of these things will bring any value to your life.
#2. If you come into large cash amounts in the millions you should think about the future and put some of it into investments. Depending on the type of investment you make, you can actually live off the income derived from your investments.
#3. Do not invest in high risk investment schemes, especially if you do not understand any of it. A lot of lotto winners lose money through high risk investments. If you don’t understand how the investment works and you are unclear about the returns you can expect then you should steer clear. Note that if someone promises you high returns on your investments then chances are it’s a high risk scheme that could end up costing you a lot of money. Steer clear of investments that promise you high interest over a short period of time.
#4. Do not put all your eggs in one basket. Diversify. You should spread your money over a range of different areas. Use different investment vehicles that have short-term returns and some with long term results. This way you won’t lose your money in one fell swoop when the venture you have invested in goes belly-up as it happened to Roger Griffith when he invested a lot of money in a hair and beauty salon.
Look at government tax breaks that give you the opportunity to boost the returns on your lotto money. Tax on lottery winning can be huge but you can shelter your money by using Individual Savings Accounts (ISAs) and self-invested personal pensions (SIPPs). If you have no idea about how the world of finance snd investing works, then you should seek advice from a financial planner.
Invest in property, bonds unit trusts and shares. If something goes wrong with one investment platform you will have other investments to fall back on.
Find ways to make an income with your winnings. This should be the money you spend for your normal, everyday life. Spend what you generate from your investments.
For instance, if you invest in property, you could have an income from the rent money and if your money is in shares, you should be able to live off the dividends that come from these shares.
Just because you are a millionaire does not mean you need to start living large. Remembers money is not an infinite commodity, to avoid going broke or bankrupt you need to ensure that there is some income that you can live off.