How best to invest your lottery winnings
Winning the jackpot on the lottery means you will now have a lot of money to save, spend, or give away. If you are very much a common sense type of person, then the majority of the money is going to be placed into accounts such as savings or other financial investments. Now, most of us would simply place all our newfound wealth into a bank account or GIC with a bank that we trust. However, the old adage “Never put your eggs in one basket” particularly applies here.
Placing all your money into one account or investment is a double-edged sword. Yes, any return on that money through interest or other returns would be very large and bring you in a sizeable income However, if all of your money is in one account only, then should anything happen to that bank or investment account, then all of your money will be gone. In order to keep as much of your jackpot as possible, you will need to spread your money around to break it up and keep any issues that would eat away at your money limited to a small amount.
If you do decide to put the money in the bank, the first thing you need to do is ask the bank the maximum amount of funds within the account that is insured by the government in case anything happens. For instance, if the maximum insured amount for each account is say $50,000, then anything that may happen, bank going under, bank being robbed, etc, the government would pay you back your $50,000. If your balance in the account were $60,000, then you would be out ten thousand dollars.
You have to spread your money out into many different savings or GIC accounts, or any other interest bearing accounts the bank provides, but you have to limit each account to a maximum of the government-insured amount. This way, if all your money is in these accounts and something happens with the bank, then all your money is still guaranteed and you won’t be out a penny.
If you are going for stocks, mutual funds, or other types of investments, don’t put it all in one or two of them. Spread out the money into various stocks, various mutual funds, and an assortment of other investments. With this strategy, if any of the investments tank, you will lose only a portion of your jackpot and will still be financially viable.
Some people do not trust banks or investments, or the financial community in general, and will hide a portion of their jackpot inside their homes. If you do this, you will not gain any interest or other income on the amount stashed away, but on the other hand that money won’t vanish if accounts or investments have issues or go bust.
To keep as much of your jackpot money as possible, don’t hoard the entire amount. Spread it out as wide as possible and keep as much of it safe as possible. You became the lucky winner in the lottery and won a jackpot that will do you for the rest of your life. Do what you can to ensure that it actually stays with you all lifelong.