Thousands of people all around the globe win lotteries annually but there are very few people who make the correct investment decisions and multiply their wealth manifolds. So, what is their secret? Here in this article, we have pointed out the avenues in which a jackpot winner can invest prize money to ensure that they keep growing.
Invest Prize Money in Treasury Bills
The US Treasury bill is considered as one of the safest investment options. They are risk-free investment vehicles and provide lowest return on your investment as the repayment is guaranteed by US Treasury, the FED. You can contact your banker and instruct them to invest a portion of your prize money that’s in your account in the US Treasury bills.
Invest Prize Money in a Mutual Fund
After investing in the T-Bills you should also invest some amount in a tax-free mutual fund. The units of these funds are listed on stock and can be purchased by contacting a broker. They can then again be sold on the stock exchange to lock in a capital gain. If you yourself aren’t aware of investing in the stock market, then investing in a mutual fund is the safest option because your money will be managed by capital market professionals.
Certificate of Deposit
If you are ready to invest some amount of prize money for a fixed time period and give up your liquidity, then a certificate of deposits (CDs) is a good option for you. These CDs generally pay a higher rate than the Treasury Bills and are considered a safe investment. The only negative thing about them is that if you decide to liquidate them before the maturity date, the bank will levy some penalty on you.
Be a Seed Capital Provider
With huge jackpot winnings in your hand, you can decide to invest in someone else’s business. As a matter of fact, you will be looked as a venture capitalist that provides seed capital to a local small but rapidly growing business. This is risky as if the business fails your capital will be lost as you were a partner in the business. However, the profits in providing seed capital and acquiring a certain percentage of ownership are humongous if the business turns out to be a success.