They say you have a one in a million chance of winning big in either a lottery or in casino gaming. However, even when we may dream of winning, not too many of us are prepared to handle what comes after a big win. In fact, a winner’s lucky day could turn into their unlucky day if they are not careful. Setting a great foundation is key to make the most of your good fortune.
Let’s just assume we were winners today, and the one thing that everybody keeps asking is, ‘’If I won a million dollars, how would I use it?” With that in mind, let’s look at some of the most important things could be done after winning a significant sum of money.
- Give it away
This decision is more about being a good citizen. The moment you have the courage to let go of some money, you are holding a lesser sum of money, which leaves you with a lesser amount to spend on you. Pay it forward. There are plenty of charity organisations, which would highly appreciate a generous donation.
- Pay off debts
Whether it is student loans, or car loans and any additional debt that involves two-digit interest rates, better pay the debts in full so as not to have that to worry about.
- Invest for income
One thing that doesn’t change regardless of how large or small a person’s investment portfolio is inflation will diminish the buying power of whatever money that you have to spend. For that reason, one could tie the money up for some years to explore investment options or invest it immediately upon settling on an investment option.
- Start a backup fund
It might be a good idea to keep a significant amount of monthly expenses in a high-yield savings account, which will cover a financial shortfall when an unanticipated expense crops up. This backup fund can be used if and when you find yourself short because even tycoons get into monetary snags, and sometimes more often than other people.
- Put away money for retirement
Lastly, depending on circumstances and existing job provisions, one may consider using some of the money to invest in a pension. You could assign a fraction of the million to retirement fund accounts, such as an annuity and build up nice retirement savings.
Of course, the most sensible option would be to invest in a well-diversified, balanced portfolio depending on age and risk tolerance. However, having a million dollars, one isn’t in a hurry to start a retirement scheme or fund. Better to enjoy, go for a luxurious holiday, buy a yacht or at least have a toast with champagne among friends and family to celebrate this strike of incredible luck.