If there is ever a time when you win a lottery or inherit money during a period of hardship, one of the major things you would worry about is what next to do in order not to misuse the funds. If you intend to keep it for paying bills like rent, fees and electricity, the money will run out some day and it’s back to square one. But there are certainly ways you can make the money yield more cash for you for a long time. The only thing is to come up with an investment strategy that will make a chunk of money you take out to grow exponentially.
Investing such large sums go a long way in preserving the money for you for a lifetime. There are industries – like the stock exchange market, real estate, oil and gas, gold and even agriculture – where you will make mega profits. To enable you decide, here are tips on what to do with inherited money or lottery winnings.
Start your own Business
If you win the lottery at your old age or get a share of a family member’s inheritance when you can’t even work any longer, you still need to get busy so you don’t waste your winnings on frivolous things. If you have always wanted to start a restaurant, a football club or your own tech hub, this is probably the right time to – as you now have the funds to begin with.
If you are a young person who probably has never worked in his/her life, perhaps you don’t need to take orders from anyone anymore. You can commence your own startup company and hire those who will run it excellently for you. However, you need to keep in mind that businesses dont just become big overnight. There are other expenses that are involved for easy running. Even if you decide to buy out a company that provides the same products and services similar to what you plan to go into, there are changes you will make that involves additional expenses – like hiring new staff, purchasing upgraded equipment and tax related payments. Talking of tax, you have a chance to reduce your tax liability when you invest a lottery winning as your main capital and source of income.
On the other hand, you can create a retirement plan for yourself so you can have some money to yourself for when you can no longer work. In the US for example, the solo 401(k) is a self-employed plan for those who run their own business and want to save towards retirement.
You can also make a substantial amount of money from selling the business years later. Since it’s a business you have passion for, you will tend to put in all effort into making sure it’s successful. When you have made a lot of profit and already have a retirement account, you can sell the business to someone shares the same dreams as yours. That’s like winning a lottery twice!
Invest in real estate or oil and gas
In as much as there has been some serious changes in the real estate market that seemed to have made the industry sought after as compared to decades ago, property investment still remains one of the most profitable ventures for anyone with lots of free cash at hand. There are different segments of real estate that will fetch you a reasonable income regularly when you put a percentage of your money – from buy-to-lets to buying and selling or even renting holiday homes to tourists. Property also tends to rise in value as years to by, so your money’s worth will definitely increase.
In real estate, rental is pretty much the easiest way to make some income from real estate investment. You can purchase a property that is split into various flats – in a residential area. If the area is sought after, you are guaranteed that it will always be occupied at all times. This means that you are assured of monthly income for a very long time.
If you want to invest in a high end area or a commercial area where you can rent out stores to prospective clients, you need to know what it takes to avoid losing money to scammers and paying twice the amount the property is worth. However, there are trusts that can help mitigate the risk involved in putting money into such investments. Through them, you just have to sit and reap the dividends of investment rather than handling the process all by yourself.
The oil and gas sector is filled with people who have cash to put in at a specific time. Whether they ran into a windfall of money or saved some over the years, the opportunities that lie in investing in the oil and gas sector is tremendous. You must not purchase your own oil bloc, you can either buy shares from an oil company or go into partnership with brands in the sector to either supply, service or refine oil.
Purchase a life insurance policy plan
Before you won the lottery or got the inheritance, you probably had expenses and uncovered bills that needed to be sorted. Having life insurance helps you pay them off. Therefore it’s important to buy life insurance – but go for one that provides living benefits or pay dividends. This can be done by buying a permanent life insurance policy or whole life insurance plan. Since you are a member of the plan, you get paid from time to time. This is because the company you are buying the plan from will always make money from policy plan as it increases in cash value over time.
Lastly, keep in mind that this isn’t an exhaustive list of what you can do when you come to a windfall of money. Money is bound to undergo inflation. You need to find ways to still be in possession of the money but not in cash. Investing in precious metals like gold is also a great idea. You can buy stocks as well. What matters is making sure that the money becomes a source of wealth accumulation.