‘Money for nothing’ is a phrase that many of us seldom get to experience in real life. We often read or hear about those lucky souls who scoop a massive lottery prize from a tiny initial investment. But how many of us have actually met these people in real life? Ironically, the members of the public who are fortunate enough to win these competitions seem to be slightly older than the rest of us. When we read the interviews from these winners, they often tell all and sundry that the winnings will not change them. They sometimes disappear off the map, but many of them make a few impulse purchases that rarely make any sense. Have you ever wondered how you would go about dealing with such an awesome windfall?
A Few Fun Suggestions
Just for argument’s sake, let’s assume that you are single, have a decent job, and live in rented accommodation with no debts to your name. You have just discovered that your winning ticket is worth the grand sum of $1,120,000.01! After picking yourself up off the floor, you pour a small drink and start to let the news sink in. Automatically you begin to think of those things that you always wanted, and still want. You ask yourself the question that many of us will be at this moment in time – ‘Is this enough money to live on for the rest of my life?’ The answer to this humdinger is down to you really. With a little luck, you can invest this sum in a high-interest account that may yield enough annual interest to support you. But let’s get back to a few fun ideas before dealing with the more adult possibilities:
- Car – You’ve always driven an old jalopy so why not upgrade to a new shiny new jalopy instead? You decide to buy a brand new Jaguar XF, a classic yet modern car. It weighs in at just over $53,000 and is practical enough to transport your future family from A to B. You may still be single, but with this type of car, that will soon change!
- Holiday – Take a quick round-the-world trip to see if your perspective changes at all. Allow $25,000 for this 6-month excursion, see the pyramids and swim with those darn dolphins as well.
Invest In Property
Okay, you are back from your travels and decide that property could be the way to go. It is a buyers’ market and you certainly have enough funds left over for a few purchases. Your current balance checks in at $1041900.01, sadly you forgot to shift the balance into a high-interest account and negated the possibility of 6 months growth. You need somewhere to live also because when you set off on your trip, you forgot to pay your landlord upfront. Your car was also impounded but you have just paid the $5,000 penalty fee and now you are cruising around looking for places to live.
After a few weeks you have decided on the following:
- A smart 2 bedroom apartment in a new building. This one is for you and you splashed out a cool $375,000 for the privilege.
- A detached four-bedroom house in the suburbs. This is a new build and weighs in at $567,000. You can rent this place out and that will give you an income of $3,000 per month after all deductions.
Long Term Is Smart
Congratulations, you have had the trip and car of a lifetime bought a lovely place to live, and have a sound investment that is providing you with spending money every month. With your remaining $94,901, you can stick it in a 5-year savings plan and think about selling your bricks and mortar investment for a profit in a few years. For now, just sit tight and reminisce over those fantastic 6 months whilst looking for your new partner!