On Tuesday evening, I stopped at the garage to fill up my car. I was standing there, looking in the garage window and saw those little digital screens telling me how much the Lottery and Euro millions jackpots were. €175 million for the Euro millions!!! I have to get a ticket. Later than evening my wife gets a text from her friend telling her the ticket was sold in Ireland. To be honest, I knew I didn’t win, so only checked the ticket when I went to bed that evening and saw pretty quickly I didn’t have the winning numbers (or even a match two). It’s a great conversation to have with people, discussing what you would do if you won the lottery, who you would help out, what house you would buy, the holidays you will go on. That is what the lottery is based on, making people rich beyond their dreams. But it will only happen to a very small number of people. But what about the thousands of people who come into money every year? A decent lump sum but not enough to retire on, or change your life forever. What do you do with that?
Unless you are Monty Brewster, there’s no hurry to spend it. Take your time and plan on what you want to do with it. Depending on how much money you have, you can spend it over months or years. But don’t feel you need to have it allocated and spent within a few weeks. It may even form part of your retirement income.
If you have come into money, make it count. Don’t look back in later life and see a load of obsolete shiny objects and ugly ornaments that were the must have at the time. With planning and thought about what you want from life, you can look back on what you did with your money with fondness and not regret.
Look at paying down debt. A mortgage is the biggest outgoing for most people and it lasts for decades. Imagine being in a position where you didn’t have to make that payment every month?
A mortgage for €300,000 over 30 years at 3.5% interest will cost you €1,343 per month. Over the lifetime of the mortgage, you will pay the bank €183,480 in interest. That’s over 60% of the value of the mortgage over that period. What you could do with an extra €183,480!
If part of your plan is to use the money over a longer period of time, get it working for you. Capital markets will help your money grow over the long term without you having to do anything. You can use this extra money to have even greater experiences or share it with others.
When people who have come into money talk to me, I always advise them to keep some money to splash out and enjoy it. You don’t have to be completely sensible with 100% of the money you get, just most of it. Always keep a portion to do something that’s really fun or buy something you always wanted but couldn’t justify the cost of it to yourself.
If you came into money, what would you do with it that would make a difference to your life? Let me know by dropping me an email to steven@bluewaterfp.ie