A few weeks ago in New Zealand the national lottery which is called Lotto had one of it's biggest ever prize pools. The Big Wednesday game had a NZ$27 million prize along with international travel, a holiday home and a couple of cars. That kind of money got me thinking about how I would use NZ$27 million. Then I came across this article from the stuff.co.nz website. The article talks about certain celebrities and how they have stuffed up their finances. They have come into a big windfall and then blown it all on material objects and have gone back to square one. Hopefully they have learned things from their ventures and that they would be a lot better for the experience.
Anyway, back to the subject if I got NZ$27 million, what would I do with it?
1. My first thought would be how can I double this money? How can I use the capital (NZ$27 million) to live on? For me I would be wanting to use the interest from the capital to pay for all of those toys that you would really want. I would keep the cars and holiday home as I want these things anyway, so why dip into your capital?
2. Some family members have asked me the big 'if' question and would I give them any money. I think I put their noses out of joint when I said no. Why should I just give them $500,000? I would invest it for them and pay them the income from the investment. Doesn't that sound good? It is the gift that keeps on giving. Just giving them $500,000 is not going to solve any problems.
3. I would hire an adviser who I have on an annual retainer to help me manage the money. Of course you don't want to hire any old person and be careful about what someone tells you at the bar. Do your due diligence and find people that you can trust.
4. An accountant needs to be in your management team too. You don't want to stuck with massive tax bills at he end of the year. That would erode your capital very quickly.
5. If you decide to go into business or make investments, do get advice but go into businesses and investments that you understand. This is the secret to Warren Buffett's success.
6. It seems, judging from the article that a few of the celebrities think that just their name will get them through but they forget that it takes a lot of hard work. So if you get all of this money don't think that life is going to be sitting besides the pool sipping on a Pina colada, of course you can have this at times but you will still need to manage your investments and have meetings etc.
7. Help out people who have helped you in the past. Like I said before I would help out family and friends. For example if a friend wanted a house, I would help them with the mortgage. Remember you don't have to go through a bank, they could go through me and charge less interest and so everyone is a winner.
8. As the article says make sure you have your will all up to date. As it could cause a big problem when you pass into the next world.
9. Try an protect yourself as best you can. There will be a whole host of scams out there. Be wary.
10. Have fun. You are in a very fortunate position. You can do whatever you want but if you play it correctly then not only yourself but friends and family will be able to live your lifestyle for generations to come.
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