The thought of winning the lottery is something we all can relate to. Every time the Mega Millions or Powerball jackpots reach $100 million, $200 million or more, most of us start fantasizing about what we could do with that kind of wealth. (And at that point, even those who swear that they never buy lottery tickets may find themselves getting in line to do so.) But have you ever thought about what it really means to have that kind of money? Not just spending it, but actually managing and maintaining it?
Oddly enough, while people can quite easily imagine what they would spend a lottery windfall all, not many devote much time to the notion of saving and investing it. After all - and as many lottery winners will attest - even hundreds of millions of dollars can vanish rather quickly if you aren't a good steward of your wealth. Thus, you have to start off your life as a lottery millionaire by being responsible. That means paying your taxes (yes, they tax your winnings) and settling your debts. You should avoid any spending sprees until those things are taken care of.
After becoming debt-free (which is a wonderful feeling), you should consider investing. If you're like a lot of people who come into large sums of money, you'll probably get the urge to "fire" your boss (i.e., quit). But your job is how you actually earn money. Yes, you have your winnings, but that money needs to be producing income. In other words, you need to invest.
For instance, let's say you're earning $50,000 per year when you hit the jackpot. The money you won needs to earn at least that much if you plan to "call in rich." Investing $1 million in AT&T stock is one way you could get it. AT&T currently has a 5.1% dividend yield. That means that every million dollars invested in that stock will give you $51,000 in dividends year in and year out. (So if you want $100,000 every year, you'll have to invest $2 million, and so on in terms of increasing your annual income.)
Looking back, with your financial obligations taken care of and some sound investments giving you a nice annual income, you can start having a little fun with your money. You can buy some of those things you've been wishing for, or take that exotic vacation you never thought you could afford. You can kick back and enjoy life, but remember to share the wealth with friends and family.
Oddly enough, while people can quite easily imagine what they would spend a lottery windfall all, not many devote much time to the notion of saving and investing it. After all - and as many lottery winners will attest - even hundreds of millions of dollars can vanish rather quickly if you aren't a good steward of your wealth. Thus, you have to start off your life as a lottery millionaire by being responsible. That means paying your taxes (yes, they tax your winnings) and settling your debts. You should avoid any spending sprees until those things are taken care of.
After becoming debt-free (which is a wonderful feeling), you should consider investing. If you're like a lot of people who come into large sums of money, you'll probably get the urge to "fire" your boss (i.e., quit). But your job is how you actually earn money. Yes, you have your winnings, but that money needs to be producing income. In other words, you need to invest.
For instance, let's say you're earning $50,000 per year when you hit the jackpot. The money you won needs to earn at least that much if you plan to "call in rich." Investing $1 million in AT&T stock is one way you could get it. AT&T currently has a 5.1% dividend yield. That means that every million dollars invested in that stock will give you $51,000 in dividends year in and year out. (So if you want $100,000 every year, you'll have to invest $2 million, and so on in terms of increasing your annual income.)
Looking back, with your financial obligations taken care of and some sound investments giving you a nice annual income, you can start having a little fun with your money. You can buy some of those things you've been wishing for, or take that exotic vacation you never thought you could afford. You can kick back and enjoy life, but remember to share the wealth with friends and family.
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