Who wants to be a Millionaire?

... not least the dinky duet ‘Who wants to be a Millionaire?’.  Although the lyrics jokingly protest against it we all know we would love to have a big bundle of paper with the Presidents or Her Majesty’s face adorning them land on our laps.  “All my worries would be over” you might say. “I’d share it with my family and those who are most needy” too.  Yes, I’m sure you would, only a million pounds doesn’t go as far as it used to and you ought to consider how much is going to be left over to pamper yourself with.

The fact is that the going rate needed to lead a jet-set lifestyle these days is more like 10 million pounds. Actually, being a millionaire is not really something to write (or email) home about at all these days anyway, because there’s reckoned to be 250,000 of them in Britain alone and you need 70 million just to get in at the bottom of the 1,000 rich list.  By 2020 it’s thought that millionaires will be rather commonplace (most new ones today are professionals who’s savings and property has increased).

To be truly financial independent come 2020 we would need to become billionaires - I suggest the estimated 10,000 multi millionaires we have on this island start tightening their purse strings now!

So it’s not what it used to be, who cares, a million would still free you from the struggle of the daily 9-5 grind and paying the mortgage from hell. Yes, it would, but you’ve still got to be careful how you spend what you’ve got left over.  After all, while there are 50 new British millionaires each day there’s a fool born every minute – and we all know what happens to a fool and his money!

The first thing you should do after picking yourself up from the floor on having been told you had won a million on the lottery is to take some wise advice.  The Lottery Board had advisors on had as a first port of call for this, but independent counsel might be a good idea too – listen to family and friends by all means, but please get professional advice on how not waste that million.

Where Your Money Goes

It’s estimated that £85 million is spent on the British Lottery alone each and every week, all in the hope of becoming a millionaire.  Now let’s imagine that you actually are one of those lucky few who do win: what are you really going to spend it on? Without doubt you’ll be looking into purchasing your dream house and, naturally, the best way to go in search of it is in your new, expensive car.

That aside, there are alarming differences in the price of properties up and down the British Isles. The Northeast and Wales are the cheapest places to live, and London and the Southeast the most expensive. There can be as much as £20,000 per year difference in general living standards. Property experts says the North-South divide is now so great that many living down South may end up moving North to get a more affluent but comparatively cheaper lifestyle. Still, living abroad in Europe is even cheaper, not just the property but the actual cost of living there, so if you can afford not to work that’s a very cheerful option.  Nonetheless, an expensive home also can prohibit many a millionaire from retiring and living off their remaining assets – I know it sounds silly reading it, but it’s true. In real terms you may be looking at being able to invest £750,000 which will earn you an income of around £750 a week. That sounds a lot to most people but amazingly it’s not enough to go jetting of whenever you want to, especially when you consider that the value of your capital will fall over time. Thus, the best thing to do is put your money to work for you.

How to Invest your Winnings

Investing in the stock market sounds like the kind of thing most people would wisely opt for.  However, you would probably only earn an annual income of just under £25,000, although this would increase over time. To live off the income of a million pounds you need an investment strategy that’s highly sophisticated and works by investing our existing money across a range of shares, bonds saving accounts and possibly property.

It is imperative that your financial advisor – and by now I’m sure I’ve convinced you that you will need one if you hit the jackpot – makes you fully aware of all the tax-free schemes that are available to you. There’s no way you want the taxman to come out of it better than you. There are many advisors now specialising in investment portfolios for lottery winners who will protect your winnings against inflation and produce you a regular income.

A Silver Lining

So being a millionaire’s not all it’s made out to be. What is! Winning a million on the Lottery would still offer most of us a much more luxurious lifestyle than we could otherwise have imagined.  At the end of the day, when you’re tucked snug in the bed of your dream home with the jag doing the same in the garage, you’ll be able to rest easy.  Through some sound investing you’ll have the equivalent of an annual take-home income of £40,000 a year. That’s about what someone in professional circles earns as an accountant or a doctor in 6 months so if you’ve had to slave away in a factory it’s an even more fulfilling prospect. What’s more you’ll have the advantage of not having a mortgage hanging around your neck. Who cares if a million’s not what it was it would still suit me just fine and anyway – you might even end up winning even more than a million on the lottery!

If you wish to use this article please include the "About the Author" below.