Mega Moolah jackpot tops £4 million: How much is it worth in gold?
What would you do if you were the lucky player who managed to win the Mega Moolah jackpot, which today, topped the £4 million mark?
Regardless of the currency you won your prize in, 4 million Dollars, Euros, Pounds, Swiss Francs, Canadian Dollars or New Zealand Dollars, is a staggering amount of money and after the initial shock and elation of victory, you would likely find yourself looking at ways you can use your money wisely.
Now for some, a £4 million windfall would result in them quitting their job, selling their current home and car and opting to purchase something a little more ostentatious. However once you had done that, helped out family and friends, gone on a lovely holiday to bask in your new-found wealth and paid off all your debts, you would still be left with a huge amount of money which would just be sitting there.
Spend or invest?
A sensible approach with the rest of your cash would be deciding whether to spend some of it in a way in which you can retain the value of the cash, or indeed increase it. With interest rates running at a low rate still, there's not a great return for investors looking for a high interest savings account (although you could put a chunk of your cash into one to serve as your 'pension pot' by living off the interest earned).
A 2 percent annual return on say, 4 million in savings would see you earn £80,000 a year in interest alone, which is the equivalent of around £6,666 a month to live on. That sounds like a decent amount, but if you have invested in a much larger home, take more holidays, have no other line of income and have an expensive car to run, then that cash can be eaten through quite quickly.
An alternative is to seek to invest your winnings in other assets. You can use any number of different banks or building societies to help you with this, or there are other ways you can invest your cash by using brokers. Investing in stocks and shares for example though is a gamble. The value of your stocks and shares can go up, but they can also decrease in value and if that happens, you can lose out on a lot of money.
Others have decided that a better way to invest their cash is to become something of a property developer and owner. Although property prices remain relatively stable for the time being, there is no guarantee that the value of your property will continue to rise and should another price crash occur, then similar to the price of stocks and shares plummeting, then the value of your investment in real terms could also be affected negatively.
So as you can see, even if you have won a huge amount of money, you would need to take careful advice on how best to use your windfall to ensure that you are set up for life, especially if you plan to give up work and start to enjoy the fruits of your success.
However, if there is one area of investment that has proven to be relatively reliable in terms of its value over the years, then it is the area of precious stones and metals, in particular the price of gold and, to a lesser extent, the price of silver.
The value of gold soars
From 1970, through to around 2008, there was a slow but steady increase in the price of gold. Back in 1970, one ounce of gold would cost you around £14.50, using British Pounds as the base currency, but by 1975, that value had increased to around £75 an ounce. There followed a sharp rise at the start of the 1980s where its value hit £287 an ounce, which shows that in ten years, gold had increased in value by almost 20x.
From 1980 through to 2007, the value of gold remained pretty constant around the £200 - £250 per ounce mark but by 2006, the value had increased to over £300 and this was the start of a rapid climb in the value of gold.
By the end of 2008, it had reached over £500 and in 2010, an ounce of gold would cost you around £750. It reached its highest ever price, so far, in September 2011, when one ounce of gold would cost you £1,160. The price of gold then dipped between 2013 and 2016, dropping down to around £700 per ounce, but by September 2016, its value had increased once again to around the £1,000 per ounce mark and, by and large, it has remained around that value ever since.
Today, one ounce of gold would cost you £1139.77. That's nearly an 8000 percent increase in value from the initial price of gold back in 1970.
If you wanted to buy your own gold bar as an investment, then a kilogram of gold would set you back £36,644.54, which means if you wanted to spend all your £4 million in this way, you could buy around 109 kilograms worth of gold.
Another option would be to invest in silver, which has seen its value starting to catch up to gold's recent rise. One ounce will set you back around £12.95 and a kilogram of silver would cost you just under £416 at today's prices, which means you could buy 9,615 kilograms of silver for a £4 million investment.
Of course, investing all your winnings in either gold or silver, or both, is not a wisest of moves, but there is a good case for investing at least 10 percent of your winnings in the precious metals as they tend to hold their value really well and longer term offers you the chance of a decent windfall should you decide to sell at some point in the future.
Listen to expert advice
When someone strikes it big on the Mega Moolah, then their casino will contact the lucky winner and inform them of the next steps to take. You may seek advice from a financial expert, or two, about what to do with your cash, or at least invest it wisely so that you can live the life you want to lead in the future. Just remember, those expert advisors are there to make money from you.
There are a number of examples of people winning large amounts of money and then blowing all of it due to mismanagement and poor decisions. By taking a sensible, level-headed approach to your win, the good news is that it is relatively easy to avoid these pitfalls.
By investing in physical gold and silver and holding it at a bullion vault such as Bullionstar.com or Silverbullion.com.sg is one of the best ways protect your future, and your family's future, from economic shocks.
Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.