Winning the lottery can be truly life-changing and is something many of us can only dream of. However, there have been many high-profile examples of massive jackpot wins around the world of late, proving that dreams really can come true.
But should you win big, is it really financially viable to buy anything your heart desires, such as the most expensive mansions and the fastest supercars? And do you need to worry about financial management when you seemingly have more money than you know what to do with? Or, is it in fact the case that looking after your finances becomes all the more important with the more money you have at your disposal?
Recent lottery wins
Lottery jackpots have been big news of late, with a number of lucky players winning astronomical amounts on the game. A record $1.6 billion (£1.1 billion) jackpot was shared in the US Powerball game in January, while a 48-year-old woman made headlines in the UK when she recently claimed she had one of two winning lottery tickets to claim half of a £66 million prize - but had put the ticket through the washing machine. Lottery organisers Camelot decided the badly-damaged ticket was not in fact a winner, and the story bore similarities to a recent incident in Austria, which saw an 85-year-old woman shredding almost €1 million in an ultimately unsuccessful attempt to prevent her legal heirs getting hold of the money. In contrast to Camelot, Austria's central bank upheld the heir's claim and replaced the shredded money.
It goes to show that it's certainly not unheard of for people to win big and get rich quick. Indeed, as the slogan famously used to say: It could be you. Many of us like to think about what we would do with a big cash injection, but would it really allow us to buy absolutely anything we want? Or might the money disappear much quicker than we'd anticipate? Our infographic below looks at how outlandish spending compares to everyday outgoings.
View a full, high resolution, printable version of the infographic by clicking here. Once the infographic has opened in the new tab, simply click the image to zoom in.
Obviously, it is very difficult to make such comparisons as there are so many variables at play. We highly doubt anyone who wins the lottery is going to go on such an extravagant spending spree within just one week, and they will unlikely be going for the world's most expensive big ticket items, such as houses and cars. However, the comparisons are useful because they demonstrate that we may need to think twice before splashing the cash at will - money management is imperative no matter our assets and we have to think constantly about how to best safeguard what we have.
As mentioned in the infographic, the comparisons are firmly tongue in cheek and we have deliberately used extreme examples to get our point across. Our calculations are based on numerous sources and various assumptions and we know that the cost of certain items will differ in certain places, and will fluctuate over time. Having said that, the fact remains that if you choose to flitter away your money with scant regard for how this will affect your bank balance, your cash can dwindle almost as quickly as it ballooned following your win.
What else could you spend your money on?
Most people who suddenly come into a lot of money will not begrudge themselves some fancy purchases. But rather than spending all your money on things you may not particularly need, how could big sums be better used?
The cost of altruism is something we have touched on in the infographic. With such a huge win to your name, is it possible do things like setting up a charity, building housing for those in need or constructing a hospital? Well, our research suggests it is far from impossible. You only need an initial £5,000 to establish a charity, while the cost of a home can vary widely - ranging from the tens to the hundreds of thousands. Likewise, it will cost a pretty penny to construct a hospital, especially considering the cost of some of the more recently designed buildings that are pushing the £1 billion mark. However, much smaller hospitals can be made more cheaply, and you may even get change from the £68 million needed to buy one of the world's biggest mansions!
Looking after your wealth
There are many ways to spend your money, and it is entirely up to you and your preference as to what you choose to do with it. What applies to everyone, however, is the need to continually manage your wealth effectively. You could be forgiven for thinking you needn't think so much about your money when you have so much of it, but you will likely find the opposite to be true. You need to protect your wealth and even increase it through various means - such as investments - to ensure you make the most of your lottery win. After all, none of us would want to lose it all in the space of a week...
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