Before starting this article, we must point out that this article is by no means encouraging the habit of spending on unnecessary things or that you should buy whatever you want with money that doesn’t come easy in the first place. Yes, you could buy yourself some new clothes, shoes, a watch, a car, or a house, but there’s also something known as money management.
Lottery money, as we just clarified, is money that doesn’t come easy. Simply put, it’s all based on luck, an unpredictable element where nothing is consistent or guaranteed. Who knows when you’ll get lucky like that again? It could be several months, years, decades, or even never. That’s how lotteries go for everyone; the chances of you winning are usually slim to none. Plus, sharing your earnings with others would be generous, but also leave you with less in the end.
Therefore, to ensure your Mega Millions billion dollar lottery jackpot lasts longer, it would be better for you to follow these suggestions:
1. Take Care of Your Debts
Before you can even think of taking a chunk of your earnings and using it on yourself for your personal spending, it would be wise of you to tackle any or all of your existing debts. These could be anything from student loans, car or other personal loans to credit card debts. After all, most lottery winners declare bankruptcy a couple of years after winning the lottery.
And even if you take care of your debts, don’t just assume that that’s the end of your eventual financial woes that will prove to be the bane of your existence. So we suggest investing in low-risk stocks or perhaps even mutual funds. Speaking of sound investments, you should definitely seek out a professional and well-sourced financial advisor.
2. Hire a Proper Financial Advisor
Financial advisors, especially those who are certified and renowned in their field, are people who can craft a plan to make proper use of your lottery winnings, whether spending or investing. They will help you get to know your financial goals and obligations better, and will even tell you if it’s best to take your earnings out in annuity payments or lump sum.
Most importantly, financial advisors can help you enjoy a good living while simultaneously advising you to invest your earnings wisely. With this being taken into account, you’ll be satisfied with both the personal and financial aspects of your life.
3. Invest Wisely
Why stop at just a handful of what luck can give you, perhaps once in a lifetime, when you can do better by opting for a continuous stream of money guaranteed to come your way for as long as you live and breathe? But before you can even think of investing, you should know that there are low-risk and high-risk investments, be it stocks, bonds or mutual funds. Ideally, it would be better to let your financial advisor take the reins to steer you in the right direction regarding investment.
Your advisor would understandably help you avoid making hasty and destructive investment choices, like volatile stocks. These stocks have an accelerated risk of losing money fast to stocks or funds with high fees attached to them. So instead, aim your sights on portfolios that are safe or low in risk, comprising both bonds and stocks.
4. Go Real Estate
Like any investment, the return on real estate isn’t really guaranteed. It depends on a number of factors, of which only a licensed, qualified, and renowned realtor can help you sort out. Whether you’re buying your first home or already have one, you can be sure to generate some good extra income on the side from the tenants who live in your home or book a place in your second one.
5. Make an Estate Plan
An estate plan is a plan that features a bunch of documents or assets belonging to an individual that will be handed out to the benefactors of that individual in the event of their death or incapacitation. For instance, you can establish a trust fund if you’re married and have children for when you lose your life, naturally or otherwise. You can even pay for your child’s education and set up a fund so that they can get an income once they graduate.
We would advise you to review your estate plan after six months. Once you’ve made changes, be sure to have your documents stored in an area that only you and your family have access to. Don’t forget to appoint a trustee to handle your trust account.
6. Establish an Emergency Fund
Anything can happen to you as long as your soul is attached to this physical plane called Earth. This could be any sort of accident or event that you can’t foresee or predict. That’s why it’s always best to keep some extra money stashed up for rainy-day purposes. In other words, you have to establish an emergency fund.
We recommend saving up at least six months’ earrings for emergencies or necessary expenditures like accidents or children’s education. It would also be better to invest in a mutual fund or high-yield savings account instead of a regular savings account. This way, your money can gain interest over time, and you can access it in case of emergencies.