Financial planning and Investment

What to do when you win the Lotto

Oliver O'Connor Oliver O'Connor

You have just won the Lotto or some other large lump sum amount that you did not anticipate!  What do you do now?

  1. Confirm: I know it might sound obvious but the first thing to do is to make sure that your numbers have indeed come up! After you have checked and checked again, be sure to sign and put your ticket in a safe place immediately.
  2. Contact: Make contact with the relevant agency as soon as practically possible to confirm your details.
  3. Collect: The earlier that you go collect your new money the better.  Once you have collected and lodged to your own account you can begin to adjust to your new financial circumstances.
  4. Nothing: Once you are confirmed and you have received the lump sum it is now a time to do absolutely nothing! Of course you will want to spend some of your wealth on yourself and that is fine but do not invest anything for at least 3 months.  Advisors will be very interested in meeting you and outlining the latest product offering.
  5. Plan: The creation of a financial plan might sound quite boring if you are after winning an enormous amount of money you never anticipated but by completing a structured financial plan for yourself, you will avoid many pitfalls in future years.
  6. Seek Advice: Spending money is a very easy exercise! Investing money, appropriately, is not. Do you know whether a particular investment is suitable for you? How? Why? If you are not an investment professional, you should seek appropriate advice from advisors who are not “pushing” their own product offering.
  7.  Tax: Tax may not have been something that has crossed your mind too much up to now, given that all taxes due were deducted at source. However, with new wealth it is important to think of the tax consequences that it brings. As with investing, it is time to seek advice from tax professionals to make sure you are optimising your new financial situation.
  8. Diversify: Do not, under any circumstance, invest all that you have won in one particular asset class. In an Irish context this generally means do not spend all the money on property assets!
  9.  Keep: While you will most likely wish to remain the same type of person as you were before winning the money it is most likely that you will wish to spend some money on item that you wouldn’t have considered previously. Therefore, maintaining a readily accessible cash flow should be a part of the overall financial plan.
  10. Review: Regularly reviewing, at least twice yearly, the performance and appropriateness of the investments made is as crucial as the time taken to make the initial investments (do not underestimate that). Not alone do investment markets go down as well as up, so does your appetite for risk and what may have been appropriate at the outset may not be to your choosing when you review matters.