The Christmas lottery awarded €400,000 to every tenth of El Gordo. In the unlikely event that you’re one of the lucky ones, you’ve probably started dreaming about yachts, private jets or super sports cars. But wait a second. Before you spend your euros like there’s no tomorrow, you should stop and read our tips on how to invest online loto money or any other prize if you’ve just become a millionaire.
The first golden rule has nothing to do with the prize itself and everything to do with common sense: do absolutely nothing. Don’t say publicly that you’ve lucked into El Gordo or an important financial prize, and if you can resist the temptation, don’t tell anyone that you’ve just become a millionaire. No one. Even to your boss, to tell him that you will not be going to the office on Monday. Anonymity is not always possible, especially if you have just won 1.16 million euros at 10 online loto.
So how can you invest your earnings now? The most important thing is to keep your feet on the ground because, as the European Financial Planning and Advice Association (EFPA) explains, three out of four winners have much less money five years after winning the award.
If you don’t want to end up doing the same, you should take a pen and paper and, first of all, calculate what you actually have left after the Treasury bite. If you win money in the Christmas Lottery and the prize is more than €2,500, you’ll have to pay 20% taxes, so if you take a tenth of El Gordo you’ll be left with around €320,500.
But be careful, because if you become a millionaire with another type of prize, such as a television competition, the withholding and taxation in the form of income taxes next year will be much higher and even exceed 50% of the total prize amount.
Hire a lawyer (and financial advisor)
Once you regain your composure, the smartest thing you can do is hire a lawyer. You may wonder why. Very simple: you will need someone to help you avoid all the “traps” that you will encounter along the way in order to get the maximum benefit from the 400,000 euros first prize of the Christmas lottery if you bought the tenth. with first prize. The lawyer will also help you maintain anonymity, which is always a good thing when it comes to keeping your money safe.
A financial advisor can help you set profitability goals and plan your investments. If you choose to do nothing with your money, you will face greater risks, such as not being able to keep up with inflation. If we receive 320,000 euros and do not make any profit from it, then after 20 years and assuming an average annual inflation of 2% (the goal pursued by the European Central Bank), our money will be equivalent to less than 220.00 euros.
If you’ve won a significant amount of money, you’ll probably be terribly tempted to go out and celebrate, but the most immediate (and smart) thing to do is to eliminate all your existing debt in the short term. The first goal should be to eliminate very high-interest debts, such as credit cards or quick loans, to live up to the cliché of “filling the holes.”
Invest in yourself
Once your obligations are fulfilled, it’s time to pamper yourself a little. And the EFPA explains that it is good to distribute part of what we earn to ourselves. To perform a male asana in a bodily asana. Of course, about 10% of your earnings will be more than enough.
To buy a house
From here we need to decide how to invest the money we just received: in the lottery or in any other big prize. Of course, we follow the maxim that concentrating all the money in one place (be it a bank, investment funds, real estate or a yacht) entails more risks than benefits.
However, many choose long-term profitability options such as bank deposits. Here we will have to negotiate (a lot) with banks, since today the profitability of these products in practice is low. In fact, we can get more out of it if we invest in 10-year government bonds, which guarantee an annual return of around 1.5%, although this figure will drop significantly if we have to withdraw the money before the due date.
If we want more money, we will have to resort to slightly more “risky” options. This brings us to another classic option for investing the money you make with El Gordo from the Christmas lottery: buying a home. In this case, it is important not to rush, even if the market is not going through better times compared to what it was ten years ago; You have to be careful because real estate can lose value and does not provide immediate liquidity. That’s why more and more people buy a house to rent out and thus use it as soon as possible.
In any case, brick has its pros and cons. “It may not be the most convenient from a fiscal and financial point of view. Firstly, we will need to evaluate whether the profitability that the money invested gives us exceeds the cost of financing, because in this case it will not be interesting to pay off the mortgage,” they say from Abante Asesores.
Think about your future
Pensions and retirement plans
Another good investment alternative is pension funds. This concept may seem too far-fetched for some winners, but it is recommended for all those over thirty. In fact, young people have tax benefits when purchasing these products. In exchange, the invested money will remain frozen until retirement.
Higher profitability means higher risk
Bitcoins (TG)
Investment funds can offer us higher returns than all previous options, but here it is important to surround ourselves with good advisers and, as far as possible, study economics and finance so that we are not deceived. The range of options is quite wide, from variable income funds to exchange-traded funds, fixed income funds or money funds. A good option to enter this world is to split between several of these options, with the goal of spreading the money between more conservative products and other higher risk products.
Short-term returns may be high, but if we’re going to make a significant investment, the smart thing to do is soften them in the short term and go a little bolder in the long term. Remember this principle if you feel tempted to invest in Bitcoin or other cryptocurrencies, highly volatile products that can give you joy and nightmares in equal measure.
Become a patron
Crowdfunding
The options by no means end there. Of course, there will be those who use El Gordo’s money to start their own business, but there is another option that almost no one thinks about – becoming a patron and investing in other people’s projects, either through crowdfunding or as a business angel.
Share with others
And while it may sound like a cliché, it would be a good idea to invest the money (or at least part) of the El Gordo Christmas Lottery into solidarity, be it through solidarity initiatives that help the development of the most disadvantaged people or the sustainable development of our planet. . Spending your money ethically also has a double reward, as tax deductions on donations can be as high as 75 percent.
If you’re looking for sustainable and financially savvy ways to invest your lottery winnings, consider the following additions to your investment strategy:
Solar Panels and Renewable Energy Projects
Utilizing a part of your lottery winnings to install solar panels in your new home can significantly reduce electricity costs and increase property value. Solar energy not only promotes environmental sustainability but also offers long-term savings on utility bills. Furthermore, you could explore starting a business focused on renewable energy. This could involve selling solar energy back to the grid or providing eco-friendly solutions to businesses and households. Investing in renewable energy projects can yield substantial returns over time, driven by the growing demand for clean energy solutions worldwide.
