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by Last Chance on March 20th, 2004

Last Chance

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What should you do to secure your money if you win the lottery?

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  • by HungryGuy on October 30th, 2005

    HungryGuy

    Keep it to yourself until the ticket is turned in and your money is in the bank. Then diversify your investments, about a third in a traditional bank account, about a third in one or two low risk mutual funds (such as bonds), and about a third in a high-risk mutual fund (stocks).

    Note: High risk does NOT mean you are risking your money. High risk means the the stock market is highly volatile. It may jump way up one day, and way down the next. Over the long run (several years, at least), the stock market will outperform almost any other security investment. But if you put your investment in stocks and constantly take out and put in like a savings account, your principal will probably lose out faster than a low risk investment. There are also stiff tax penalties (short term capital gains) for playing the stock market fast and loose.

    One of the best investments you can make is real estate, such as rental property. But you need a large percentage down payment so that your mortgate payment will be less than the rent you collect. Plus, managing and maintaining rental properties can be a full-time job in itself. Oh, and don't believe those no-down-payment schemes. They're scams. If someone had the "secret" to wealth, they'd be using it rather than running infomercials and selling tickets to seminars.

    Most important: TRY NOT TO SPLURGE OR CHANGE YOUR LIFESTYLE. Once your money is safely banked away, don't touch the principal. Just draw on the interest each year to increase your standard of living slightly more than it would otherwise be.


    At least this is my advice :-)

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