3 ways to stay forever rich from winning the lottery and why it's important
How do we keep the lottery cake - like these enormous Powerball wins - and eat it too?
Now you've won some lottery money, how do you keep it forever to enjoy?
How do we continue to keep the cash rolling in to pay for all the nice things in life? And how do we do it without eating into the lump sum we now have tucked away in the bank?
Many winners fail to have a long and happy financial life because they spend their win, bit by bit. Unfortunately, that's why most of them are broke after a couple of years.
All that stuff… the pickup truck you bought to haul wood, the vacations in Hawaii, the daily trips to the hairdresser, the His 'n Her Hummers - all add up.
It is very easy to spend large sums of money very quickly because many people find it easy to get used to a new level of spending.
That becomes a benchmark for the next level. The first-class cabin soon turns into a leased jet, and the expenses rocket sky high.
That overspending, according to many financial advisors, is why even executives on a million-dollar salary a year still have problems handling their money.
You can't have your cake and eat it too. Or can you?
So how should you use your lottery winnings to make more money - as well as spending it?
In an earlier post, I said you should put 90% of it in a term deposit (official words for putting it into a bank and getting some interest back).
After that expires and your head is clear again, you need to find a way to make this capital produce a stream of cash that never ends. Here are some ideas you can use even if you haven't got a big nest-egg:
#1. Invest the cash and live off the interest.
You need some serious funds for this... interest on a $100,000 win is not enough to live off. You may only get $5,000 a year ($100 a week) from it, and it is usually taxed as well. But for some people, this $100 a week may be enough to take care of a few bills. However, there are better ways to spend $100,000 such as the following franchise idea. Money is always better in circulation and growing.
#2. Buy a business that gives you an income.
Ideally, you should look at a franchise that guarantees an income... house maintenance, lawn mowing, home, window or car cleaning, healthcare, whiteware and tool rentals... anything that people need frequently and is ongoing.
A lawn mowing franchise, for example, may cost $20,000 to $30,000 to buy, but return you up to $2,000 a week. Some franchises will allow you to put in an owner-manager if you want to expand - or relax.
#3. Buy income-producing property.
Apartments, condos, car parks and retail space are some of the best ways to invest your money and grow it as well. Commercial property usually returns 10% of the valued purchase price, so if you invested $100,000 into one of these areas, it should return $10,000 a year, minus expenses.
That's if you pay cash for the property, which is not advised because the returns are low doing it this way.
Take a little more risk and use the power of leverage to pay a smaller deposit, and your returns will be greater.
There are many ways to produce an income stream, but very few that require no work.
Stay away from buying stocks and shares, or other white-collar methods of income - they only work for exceptionally gifted people who know the business inside out. Getting an advisor is a good idea here.
A lottery win is the largest amount you'll ever get - manage it wisely and you'll stay rich forever!