Although the other thread was closed because it was a number limited competition, the reference to a lottery winner reminded me of some sobering statistics about them. About half of them have nothing in a few years after they win the lottery.
I have had friends, clients and associates who have come into a lot of money suddenly. Mostly from inheritances, sometimes lucky business deals, or more rarely lottery wins.
There are a few things, that I think if this happens to you, you should take into account:
- *everyone* you ever knew, met, or who can find you will crawl out of the woodwork and ask for money. Relatives you never knew you had will appear saying 'you have 10 mil, why can't you give me 500k?' Don't be suckered. You don't pay other people's bills, its your money and they can jam it.
- if you are to be generous, do it in a very limited way - remember who your friends are. True friends will never put the hard word on you for money. One of my best friends is an extremely wealthy guy in Australia, but I have never asked him for a cent. Nor would I ever do so.
- if you are not a financial whiz (and few of us are) go to one of the big accounting firms for financial advice - like KPMG or Deloittes Touche Tomatsu. Do not go to your cousin's friend Dodgy Bros and Co. Many 'investment advisers' make their money from kickbacks for getting suckers to invest in pushed stock. They don't care whether you make money or not.
- disappear. You will get calls from *everyone* who you dont even know. Don't give out your address, email whatever to anybody.
- Never - boast about your money. Boast about your girlfriend, hot wife, prowess in bed whatever. But never about how much cash you have. People will forget you won the lottery in time perhaps. No need to keep reminding the criminals you have money. It is the quickest way for the more unscrupulous elements to appear. There was a famous case in Australia where someone one the lottery and their son was kidnapped, held for ransom and killed.
- Buy something like property outright. So if everything falls apart, you have a place to live. And invest the rest in something very secure like blue chip stock. Most of the big banks, like Goldman Sachs have private client services that can pick and manage a basket of blue chip stocks for you. There is risk for sure still, but a lot less than the risk associated with the 'Tow an Iceberg' type scheme seen in the movie 'Brewsters Millions'.
- make yourself 'family law' proof. You can take strategic advice to structure your assets so your significant other, or potential significant other does not leave you in the poor house. Ie marries you, then divorces you takes your house, your business and your cash, while living with another guy in the place that you bought, often with you still paying the mortage. Pre-nups can mean jack once children are involved. Big accounting firms and law firms can help you structure your assets properly to minimise this risk.
But - above all - have fun. Just make sure that the fun does not come to a screaming halt because you have bought 10 million in stock from a 2 dollar company that the mob was pushing.....
I have had friends, clients and associates who have come into a lot of money suddenly. Mostly from inheritances, sometimes lucky business deals, or more rarely lottery wins.
There are a few things, that I think if this happens to you, you should take into account:
- *everyone* you ever knew, met, or who can find you will crawl out of the woodwork and ask for money. Relatives you never knew you had will appear saying 'you have 10 mil, why can't you give me 500k?' Don't be suckered. You don't pay other people's bills, its your money and they can jam it.
- if you are to be generous, do it in a very limited way - remember who your friends are. True friends will never put the hard word on you for money. One of my best friends is an extremely wealthy guy in Australia, but I have never asked him for a cent. Nor would I ever do so.
- if you are not a financial whiz (and few of us are) go to one of the big accounting firms for financial advice - like KPMG or Deloittes Touche Tomatsu. Do not go to your cousin's friend Dodgy Bros and Co. Many 'investment advisers' make their money from kickbacks for getting suckers to invest in pushed stock. They don't care whether you make money or not.
- disappear. You will get calls from *everyone* who you dont even know. Don't give out your address, email whatever to anybody.
- Never - boast about your money. Boast about your girlfriend, hot wife, prowess in bed whatever. But never about how much cash you have. People will forget you won the lottery in time perhaps. No need to keep reminding the criminals you have money. It is the quickest way for the more unscrupulous elements to appear. There was a famous case in Australia where someone one the lottery and their son was kidnapped, held for ransom and killed.
- Buy something like property outright. So if everything falls apart, you have a place to live. And invest the rest in something very secure like blue chip stock. Most of the big banks, like Goldman Sachs have private client services that can pick and manage a basket of blue chip stocks for you. There is risk for sure still, but a lot less than the risk associated with the 'Tow an Iceberg' type scheme seen in the movie 'Brewsters Millions'.
- make yourself 'family law' proof. You can take strategic advice to structure your assets so your significant other, or potential significant other does not leave you in the poor house. Ie marries you, then divorces you takes your house, your business and your cash, while living with another guy in the place that you bought, often with you still paying the mortage. Pre-nups can mean jack once children are involved. Big accounting firms and law firms can help you structure your assets properly to minimise this risk.
But - above all - have fun. Just make sure that the fun does not come to a screaming halt because you have bought 10 million in stock from a 2 dollar company that the mob was pushing.....
