In a recent Ask Me thread on Reddit, a site user named Ididwinit shares what he did with his $2 million Australian lottery jackpot.Rather than blow it on coke and hookers, he actually put it toward paying off debt and saving up for retirement.
Stoked to see a lottery winner not serve as a cautionary tale for a change, we highlighted his smart money moves and what they can teach us about managing windfalls.
He paid off debt first. Rather than live it up, Ididwinit decided to end his debt cycle for good to free up his money to save and invest. When he won, he had around $400,000 in debt from car loans and a mortgage. Today, he’s completely debt-free and has money to spare.
He kept the same lifestyle. Some workers are tempted to upgrade their lifestyle with every pay raise, but Ididwinit knew the only way he’d stay afloat was if he maintained the modest lifestyle he’d had prior to winning. “We do have nice holidays,” he wrote on Reddit, “but most of the remaining money is now invested.”
He invested the rest. Anyone with a $1,000 lying around can start investing, even if they don’t have a clue how to do it. Ididwinit must have gotten the memo that the best way to plan for retirement is to invest and start saving as early as possible.
He kept the jackpot to himself. “Not many people outside our direct family know,” Ididwinit wrote on Reddit. “We kept it quiet and have ever since.” This was smart for several reasons: Nosy, untrustworthy friends couldn’t ask for a handout, and Ididwinit didn’t risk alienating anyone. As we’ve written before, it’s hard to root for the newly rich when you feel they flaunt their wealth.