What should I do If I win the Mega Moolah's top progressive jackpot prize?
For the majority of progressive jackpot slot players, or those that enter National Lottery-type games, the carrot dangling at the end of the stick which inspires them to play is that chance that one spin of the reels could result in them winning a life-changing amount of money.
It is hard to underestimate how attractive this is to punters, especially those who perhaps do not have the financial resources available to them as some other players. That promise of being able to have anything you want, whenever you want seems to be a one-way ticket to paradise.
Only, that is not always the case as there are a number of cautionary stories in the public domain of people who have won a fortune, yet somehow ended up penniless just a few years later.
One of the most famous examples of this is the 'lotto lout' Michael Carroll, who won a £9.7 million prize on the British lottery. Carroll however squandered his fortune on a series of ill-informed and poorly judged investments and within five years, he had spent his entire windfall and not only that, spent time in jail before having to find a factory job to make ends meet.
He is not alone, the youngest ever winner of the British lottery, Callie Rogers, won a £1.9 million prize in 2003 and frittered it away on expensive holidays, wild parties, outlandish gifts and cosmetic surgery. With all her prize-winnings now spent, Rogers had to sell up, move to a smaller three-bedroom home and was in training to become a nurse.
It's not just British players that have squandered millions. In countries around the globe you will find similar tales of seemingly fortunate people to have won a huge amount of money, only to then blow it all within a few years and end up back where they began, or perhaps in an even worse position.
So if you were ever fortunate enough to be in a position where you had won a large amount of money, say by landing the Mega Moolah jackpot; are you sure you'd be able to avoid squandering your windfall and ensure that your win serves you well for life?
What do the financial experts suggest?
As strange as it may seem, landing a massive progressive jackpot prize or other big value cash win, can cause people to make rash decisions. In the euphoria after the win, people have decided to make decisions with their cash that they later regret. This is why many online casinos will offer a big winner the services of a financial advisory team to help them ensure they get the most from their good fortune.
So, if you were to win big, what would be the advice of a financial advisor to you regarding your win? Here are some of the key strategies they would suggest a big winner would use to ensure they maximise the benefit of their windfall.
- Take time to collect your thoughts
Although this seems a silly notion to some, it is actually the best piece of advice you could give any big jackpot winner. We have already seen that making poor choices with your cash can cost you in the longer term, so once you have cracked open a bottle of bubbly to celebrate and have sat down to let the win sink in, now is the time you need to think more clearly about what is best to do with your money in future.
Of course, this is not something that you can decide to do in the space of a few moments. Some financial advisors even suggest to big money winners that they take a two-week holiday in the immediate time after a win to get away from home (where you will have plenty of people telling you what you should be doing with your cash) and to allow the news to think in and also take the next step in the process.
- Devise a detailed strategic plan of what you are going to do with your cash
Of course, what you do with your cash does depend to an extent on how much you win, but for the purposes of this article I am assuming that the lucky winner has banked at least a seven-figure win.
For most people, the first thing they want to do with their money is clear their debts. Many assume that once they are debt free, that they will then be financially set for life and the money side of things will take care of itself. That is not true, you need to spend time thinking about how you spend and invest your winnings to ensure your future is a bright and fruitful one.
For the standard person, even with the usual credit card, personal loan and mortgage debts, this would only take up a very small proportion of say, a 5,000,000 win. So once these debts are paid off (and let's assume that they amount to around 300,000 - even though for some people it is considerably less than this), you now need to focus on what to do with the rest of your money.
There are essentially two options available to you: Spend or Invest and in truth, a bit of both is likely the best scenario.
Once you are debt free and assuming you still have plenty left of your winnings, you can now start to treat yourself to things that you may have always wanted. A bigger house perhaps, a new car, perhaps even a holiday home somewhere exotic.
It is worth remembering though that spending money on items doesn't necessarily have to be a drain on finances. Spend your cash wisely on a lovely house with lands, which you can develop further and your spend could actually be seen as an investment as the value of your new home will increase.
Similarly, if you elect to buy an expensive car brand new, as soon as you drive it off the forecourt of the dealership, you have lost a significant amount of money through depreciation. However, buy an old classic that appreciates in value over time (and there are several cars that do this) and your car can not only be fabulous, but also increase in value.
It is also sensible to set yourself a budget for your spending each month. How much that is depends on lots of factors, such as whether you decide to give up work, or continue and crucially, how much of your windfall you decide to invest and where you decide to invest your cash.
If you land a 2,000,000 win, pay off 200,000 of debt and then set a budget of 100,000 a month to spend, if you don't invest wisely then you have a year and half of living life to the full before your cash runs out. However, a more modest budget of 10,000 a month would mean that you would spend through your entire win in 15 years (assuming you don't have any income, which if you invest wisely, you should).
Buying things is nice and makes life more enjoyable in the immediate time, but if you land a big win, then you can secure your family's financial future for a long time to come. The key to this is investing your money, but what should you invest in?
There are any number of options available to you and in truth, the key factors in your decision making should be what the risk is of your investment and how easily you would like access to the funds invested should you need them.
With interest rates generally low, putting your money in a high-interest bank account is perhaps the safest option, but may only generate a small return. However, if you win 5,000,000 and put half of that amount into a high interest account that generates around 8% per annum in interest. That is still 400,000 in interest you will earn each year. That would mean you would have around 33,333 per month to spend and you would not need to touch the 2.5 million in your account if you can keep within that budget. Plus of course, you would have the other 2.5 million to spend.
Other options include investing your money in property (which can be lucrative in terms of the value of your assets, but not that easy to get your hands on the money quickly if you cannot sell a property you have purchased). Another option is stocks and shares. Both these options can increase the value of your investment, but you can also lose on your investment on both, which is why it is more of a gamble and you should take plentiful expert advice from several qualified people before you even consider investing in either.
This is where this initial advice of a team of financial advisors just after your win can be so beneficial. They can explain the best ways to spend and invest your cash to ensure that not only do you see the immediate benefit, but also secure a long term, financially secure future for you and your loved ones.
What is interesting is that people can burn through even very large wins if they don't plan what to do with their winnings sensibly, so a bit of time thinking about this now will give you a plan of action to follow should you ever be lucky enough to hit spin and then land a win of a lifetime!
Byline: This article was published by Mega Moolah expert Henry. Media and other enquiries.