Save
Financial planner reveals what lotto winners should do with $50m
The three lucky recipients of last night’s $150 million jackpot have been warned to do very little with their money until they can take the emotion out of last night’s result.
Financial planner reveals what lotto winners should do with $50m
The three lucky recipients of last night’s $150 million jackpot have been warned to do very little with their money until they can take the emotion out of last night’s result.
Speaking to nestegg, financial planner Adele Martin has explained that winners of such large windfalls need to get themselves a good team around them that includes accountants, lawyers, financial advisers and, potentially, life coaches.
“If you’ve suddenly have this wealth and you haven’t created it along the way, you might not necessarily have the skills,” Ms Martin said.
And while the rest of us only dream of what we could do with such a large amount of money, she advised that despite not being the most interesting way to spend $50 million, recipients could simply put money into a bank account and live off the interest.
“You don’t necessarily have to go and invest it. When you win the lotto often, it can be about protecting the capital,” the financial planner argued.
As a word of caution, Ms Martin cited a US statistic that around a third of lottery winners end up in a worse financial position after winning the lotto than they were in previously.
Plan and set targets
Ms Martin said planning and setting targets would ensure last night’s winners protect the capital they have luckily won.
To ensure the capital remains, Ms Martin advised setting a target “for how much you can give each year or put away”.
And while an immediate resignation is what many people dream of, the financial planner also advised winners to continue on with daily life, until they have set up their plans.
For her clients who have suddenly found themselves responsible for large windfalls, she advises: “Don’t rush in, don’t make any big decisions straight away.
“Take your time, still turn up to work and keep everything normal and really think about this before rush[ing] into doing anything.”
What should winners do with the money?
Despite three winners last night, Ms Martin explains if one person had won the money, they would likely be eligible for $3 million in interest a year just by banking the money, meaning they do not need to invest the money.
She said that “this is where lotto winners get in so much trouble”.
“They go out and they do these development or start these businesses and they split it to all these investments thinking it’s what they have to do and they don’t.
“If you won the $150 million and you could get 2 per cent a year from it, you’d get $3 million a year from it in interest before tax.”
The financial planner concluded: “They should have a proportion to play with and have a large majority of capital protected because you could just live off the interest.”
About the author
Join the nestegg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
About the author
Join The Nest Egg community
We Translate Complicated Financial Jargon Into Easy-To-Understand Information For Australians
Your email address will be shared with nestegg and subject to our Privacy Policy
Here’s how Gen Z is changing the finance game
How to budget on JobKeeper and JobSeeker payments
How to safeguard your finances through the pandemic
Why cash flow is king during COVID-19
4 financial changes to prepare for in 2020
Setting achievable financial goals in 2020
Deck the halls with budgeting and savings
How can I save money for a holiday fast?
How to budget
Here’s how Gen Z is changing the finance game
Generation Zers – those born between 1995 and 2012 – are leading the way when it comes to money responsibility and a more flexible view of finance, according to new research. ...Read more
How to budget
How to budget on JobKeeper and JobSeeker payments
With more than 3 million Australians likely to be on either JobSeeker or JobKeeper payments during the COVID-19 pandemic, many are wondering how they can survive off government assistance. ...Read more
How to budget
How to safeguard your finances through the pandemic
Australians are ill-prepared for any major setback financially, with one in five Aussies needing credit to get through unforeseen financial expenses, new research has found. ...Read more
How to budget
Why cash flow is king during COVID-19
Cash flow has never been so important, according to a chartered accountant. ...Read more
How to budget
4 financial changes to prepare for in 2020
From neobanks to rate changes and insurance hikes – a number of changes are set to take place in the coming year that could have both positive and negative ramifications for the financial position o...Read more
How to budget
Setting achievable financial goals in 2020
The beginning of each year is the perfect time to recalibrate and find your financial feet. Whether it’s an all-encompassing dream of living by the beach, a resolution to save 5 percent of your sal...Read more
How to budget
Deck the halls with budgeting and savings
Aussies are being urged to use their holiday period to reconsider their financial and savings requirements to better position themselves in the new year. ...Read more
How to budget
How can I save money for a holiday fast?
Unless your monthly salary is very large that it’s easy to produce your travel fund, it may take time to plan and save for your dream holiday. But there’s no need to panic even if your holiday is ...Read more
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.