I would never win. Why? I would never play. Only fools play the lottery. This is evidenced by the fact that you never hear of a lottery winner going on to massively increase their wealth (that is, through wise investments). And, more often than not, they end up losing everything within a couple of years.
Anyway, if I were to win £50m, after taxes, in the national lottery, I would:
- Divide my money into three sections: short-term (basically, for immediate use), medium-term (10-20 years), long-term (20years+, retirement, etc).
- £5m in the short term
- £35m in the medium term
- £10m in the long term
- I'd use the short term money to finance my migration to the USA (looking for a state with a the best weather/liberty mixture... if we're pretending I've won the lottery, let's also pretend Southern California has become a state), buy a plot of land, build my dream house, and live the life of riley.
- The medium term money will be used to finance a few medium sized businesses, whose profits will let me maintain my life of riley lifestyle into the future, whilst also creating jobs, and generating growth (both of which will be very satisfying outcomes). A few of these businesses that I would set up include: an "alternate" sports store - selling gear and promoting niche sports, such as lacrosse, and also extreme sports (surfing, skating, etc); introduce a chain of restaurants, loosely based on the family-friendly British pub, but Americanized (kinda like what Starbucks is to coffee... without the bad reputation); some kind of alternate energy research company; and, finally, I'd set aside around 5% of my medium-term money on micro-investments.
Micro-investments are, in my mind, a far better way of improving people's lives when compared to welfare and charity: basically, investing small amounts of money in high-risk, low return businesses, that can promote entrepreneurship in some of the poorest parts of the world. Rather than making people dependant on welfare, or charity, micro-investments give them the means to depend on themselves.
- Finally, the long term money, I will probably hire a couple of investers to manage: keeping it in shares, bonds, metals, various savings accounts, whatever. This section will be the slowest growing, but should also be the least risky, hence why it's long term.
The idea will be, that both the medium and long term portions of money will grow with time. The long term portion should grow a couple of percentage points above inflation - any returns greater than that will move into the medium portion. The medium portion should hopefully continue to grow at a fairly nice rate. The medium portion will be my bread and butter: as a high percentage of the returns will be going into my short term portion, to keep it topped up to the £5m level (+inflation) as a long-term average.
All-in-all, I think this system would allow me to have a very comfortable life, with persistant growth of my wealth, and also a nice, safe fund for me to retire into.
