Are lottery tickets a good investment?
Ask a few financial advisors for their personal opinions on the investment wisdom of lottery tickets. You may be surprised at their response. Before we get into this article, let’s make it clear. No financial professional is going to advise you to sink all of your money into lottery tickets as a financial investment. But, laying down 2£ for a chance at winning millions is not a bad deal.
When you go to an online site, you see the various lotteries that are available. Their high-powered computer calculates the chances of winning the lottery, and lists the odds of each game. At that point you will see where the big money is. Making a small wager puts you in the running for a major win. The investment price versus the money won makes this a slight chance of winning a good investment. Okay, so there is a little more to it than that.
When a person thinks of winning the lottery, they think of all the things they can buy and the places they can go. They have a dream. Former writer for Forbes Magazine and investor Robert Pagiarini explains that the “lottery dream” gets the ball rolling for some people. If you are considering making your dreams come true, dropping a few pounds is a fun way to chase them. But, you have a good chance of losing. So, if you lose the lottery, do you give up your dream? There are other ways to make your dreams come true.
Looking at what you would do with a windfall to invest may give you the courage to build on your dreams. Then, with the help of your financial advisor, you can learn how to save money and make money with your current income, which will help build your “windfall” investment. It will not be as fast as winning the lottery, but you can still find ways to make a little money and turn it into more money for investments.
Rules to follow if you win!
Let’s say you do win the lottery. Or, if you receive a large settlement or inheritance, would you know what to do with the money? Financial experts agree on some basic rules you should follow:
- 1% It
This is your mad money. Take 1% of your chunk of money and spend it on whatever you want. Buy the fancy car, the diamond watch, or go on your dream vacation. But do not touch the 99%. The 99% is working cash. That is the money that will be put to work for you.
- Pay your bills
Pay off everything! Pay off every bill you owe from your credit cards to your third mortgage. Get completely out of debt, so you have nothing holding you back.
- Safety net
Put a minimum of six-month worth of your expenses including food, housing, transportation, and an emergency fund in a high-interest savings account for the future. This money will never be touched unless there is a major emergency.
- Future plans
Take a serious look at your future and prepare for it. Do you need money for retirement, education, or relocation? Take the money and put it away while you have it. Tomorrow is just around the corner. You prepare now and it is taken care of.
- Hire professionals
You need experts in the financial field. Financial advisors, accountants, attorneys, realtors, and others who work in the field can lead you to make wise choices. Those choices are what make you money. It is important that you have good people leading you. Check them out carefully and go with people you can trust.
- Honeymoon period
You need a honeymoon period. Do not rush into the seas of finance without your life-vest. It is a good idea to wait at least six-months or better yet, a year, before making any big decisions. Do not let people talk you into making their dreams come true. It is common for lottery winners to suddenly hear a lot about “great opportunities” from friends who just need someone to back them. You will also be asked for donations. While some donations are tax-credits, only an expert can tell you if this will pay off for you. There will always be more causes than you have money for. You must take care of your financial life first before you consider gifting money.
Conclusion
Winning the lottery is a great investment for the one who actually wins. For the others it is still fun to try and it can put us in the right frame of mind to make other financial matters happen in our lives. Windfalls are usually once in a lifetime events. If you are lucky enough to get one, use it wisely and stay on the winning side.
