Source: The Mercury, 31 March, 2001, p.??
PUNTERS fortunate enough to come away with a win have two choices. Blow the cash on some short-term fun or put it to good use and jump on the fast track to riches. We all dream about what we would do with if we hit the jackpot -take a trip, buy a car, pay off the mortgage or even quit work. But the Financial Planning Association says most people are not capable of coping with a big win. Financial planner Ken Taylor says the first thing to be wary of is making a quick decision. With all the excitement and emotion people can get carried away and waste the opportunity, he says. It's important to enjoy your good fortune and treat yourself but then you should map out a strategy to get the most out of your winnings. Careful planning is necessary to get the most out of the lump sum. How you invest your money will depend on your stage in life and how much you need to live on. The Financial Planning Association makes the following suggestions: If you win $1000 · Pay off existing personal debts such as credit cards and make a commitment to change poor spending habits. · Open a cash management account or trust and commit to a savings plan to top it up each month. · Develop a comprehensive, written financial plan with a financial adviser to set some investment and savings goals. If you win $10,000 · Make a home loan payment and consider re-drawing funds for long- term investments. · Open a cash management trust for upcoming commitments. · Top up your superannuation or make a spouse contribution. · Invest in a managed fund or unit trust. If you win $50,000 · Put the money towards your home loan and consider re-directing a portion of your funds to long-term investments. · Make a deposit on an investment property. · Buy shares in telecommunications, banking and media in $5000 parcels. · Get a margin loan for shares or managed funds. · With managed funds, consider international share exposure. If you win $250,000 · Consider direct share investments and managed funds with international exposure. · Pay off your existing mortgage or buy an investment property.
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