So, you popped to the local shop last night to pick up a paper, and on this occasion you decided to buy a lottery ticket too. You’ve then woken up this morning to discover that you are one of two lucky winners and are set to come into a windfall of around £30 million. It’s not something you can ever prepare for, so what do you do now?
Perhaps you’d like to help friends and family, treat yourself to something nice, or just spend it all!
Is it worth putting a plan into place? After all, can you really spend that amount of money?
The hard reality is that money is, whether we’ve won the lottery or not, hard to come by and very easy to spend. How many times have you gone out for dinner and the bill has come to more than you had envisioned? Money has a habit of slipping through our hands.
It may not sound possible, but it is entirely possible to run out of money. Take for instance Mike Tyson. He earned a staggering $400 million over the course of his 20 year boxing career. His earnings didn’t exactly last him, though, as the former heavyweight champion filed for bankruptcy in 2003, with a total of $23 million in debt. His debts included a $9 million divorce settlement, $13.4 million owed to the IRS, and $4 million to the British tax authorities.
The idea that crops up most frequently after a big win, is have a little celebration, or a holiday. That’s not really going to make a big hole in your new winnings now is it? It’s quite easy to spend £50,000 for you and your family to go on a five star all-inclusive luxury holiday, because of course even if you haven’t spoken to some of your extended family for some time, it would be mean not to invite them, right? You don’t want to be known as a penny-pinching millionaire, so the mere suggestion of them digging into their own pockets would be out of the question.
Except now you’ve entered the realms of contrast theory. You may have heard of the soon-to-be model ex-wife of a Saudi billionaire who recently said that she needs £250 million from him to start her new life in their divorce settlement. This includes £6.5 million a year for overall living expenses, £1 million for five cars, £26,000 a year for mobile phone expenses, and £80,000 for a new ball gown. All of this is to meet her own personal reasonable needs only to maintain the life she has become accustomed to, and is a perfect example of contrast theory. What it means is, once we do something once we get used to it and this becomes the new norm.
You might not have won the lottery, but might have received an unexpected windfall. Talking to a financial advisor is a good first step in financial planning for your future. As the saying goes, ‘if you fail to plan, you are planning to fail’.
Questions you might be asking yourself are:
How much can I allow myself each year?
Where and how should I be investing my savings?
How can I be sure who to trust with my finances?
Beaumont Financial Planners have been established since 2000 with many of our clients having been with us for over 10 years, which is reflected in our retention rate of 97%. We cover everything from first savings plans through to pension planning, capital gains tax to income protection and all the aspects in between. You can rest easy knowing your finances are in the safe hands of an advisor you trust.