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Opinion: You’ve just won €175m in the euro millions - don't buy the yacht just yet

‘Research from Harvard has shown that money can, in fact, buy you happiness but not in the way you think’, writes Eoin McGee.

Eoin McGee

THERE IS ONE fun question that lots of Irish people are asking themselves today – what would you do with all that money?

It might seem a bit daunting or even as scary as hell, so just in case it happens, here is some straight up financial advice to make sure that you don’t make a mess of it. 

Firstly, the numbers. If you put €175 million in a bank account and got an interest rate of 0.25% – you would get an income before tax of €36,458 per month and you would not be eating into your money.

If, however, you were a bit more clever about it and you invested it in a long-term investment portfolio, which generated 4% per annum, you could be looking at an income of around €583,333 per month or €7 million a year, again without touching your own dough.

Tax is an issue so you need to decide who you want to share this money with.

The Lotto frown on it, but if you are planning on giving big chunks of the money away, you need to get the people who you want to gift money to, to sign the ticket too.

Because the people who sign the ticket don’t pay any tax on the money they get.

But a word of warning, the amount of money you win is divided equally by all the people who have their name on the ticket.
So you might want to think long and hard on whether or not you invite your brother-in-law to share in your big win.

Your next steps are up to you – but my suggestion would be that whether or not you intend to keep working, do take some time off.

Be resolute now that you are making no decision that costs more than €10,000 in the next eight weeks – ie until the dust settles a little. 

That means that you are not buying anything, clearing any debt, gifting money or donating to charity until the eight weeks is up and the euphoria and media interest have died down.

When it comes to taking time off, you might want to do a staycation in Ireland and stay in a lovely suite in a nice hotel, or a villa in Europe, or maybe a private yacht in the Bahamas. But remember the €10,000 rule – don’t try to buy the yacht yet. 

You have a decision to make, but one thing that you have got in abundance now is time.

You have plenty of time to sit back and think about what you want to do with your life now.

Don’t rush that – remember this money will either make you or destroy you.

People you haven’t heard from for years, who were gone from your life, will be back in touch. They may be genuinely wishing you well or they may be fishing for some cash. The problem is, particularly in the early days you, won’t be able to figure out who is who.

You may get the feeling that everyone just wants a piece of your pot and nobody is interested in you anymore.

This feeling is inevitable and, in time, you can get advice on a strategic plan about how to gift to people in your life and to the charities that are important to you. Make no decisions and no promises in the early days. 

If you have been happy in your life up to now this does not have to change, but it will if you don’t remember to keep doing the things you have always done that make you happy.

I speak to clients who have suddenly come into a lot of money (usually they have won money, inherited money or sold their business). Once the dust settles, they all come out with the same things.

Money bought them the ability to do what they want but time with the people important to them, having experiences that they enjoy, is what life is all about.

Research from Harvard has shown that money can, in fact, buy you happiness but not in the way you think.

They found that buying material objects for yourself makes little difference to your happiness levels, buying experiences like holidays or sporting events has more of a positive impact – but if you really want to buy happiness the best bang for your buck is to buy things for other people or gift money to a charity.

It’s not me saying it – that is the findings of the Harvard research. Wouldn’t it be nice to have €175 million for yourself to test out that theory in practice?

Eoin McGee is a financial planner and principal of Prosperous Financial Planning. 

He offered financial advice on two RTE TV shows recently, How to be Good With Money and This Crowded House. 

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