I won a small amount on a lottery -but I know nothing about money

[fuggles]

Hello. I am from the UK, England.

I won a small fortune on the lottery, yes, I know doing the lottery is really dumb and is a bad thing to do for your character, but forgive me.

I won approxmiately 198 thousand pounds. Wow. I know.

This was a few months ago. I haven't touched the money at all. I am 22, live with my parents. I have no expenses really.
Just basic food bill I give my parents, sometimes I give them petrol money, the most basic of things that my job pays for anyway - I work as a kitchen porter.


Since I won the amount, about 4 months ago, I have started reading self help books, motivational books,
Brian Tracy, Jim Rohn etc, and been watching the youtube videos of them, goal setting, etc.
Richest man in babylon, think and grow rich, as a man thinketh, etc

My questions are , what should I do with my money , if anything ? I have no qualifications or experience, and left school with no grades except a basic maths and english GCSE. I am 22.

Should I try and use this money to make even more money ?
What does invest mean, and should I do it ?

 

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[townhaus]

Welcome to the forum!

Id ignore the woo woo self help guru stuff to be honest. Im a 20 year old kid in the UK, and not a millionaire (can i say 'yet'???) so take my advice with a pinch of salt.

If you want to learn about making money, learn from those who have done it. Get yourself a mentor if you know any (rich uncles? employer? family friends?) but if not, try reaching out online or read books.

Id swap the self help books for more practical- no BS by those that have achieved what you want to achieve.

Read the millionaire fastlane first if you havnt already, then 'how to get rich' by felix dennis (billionaire, owns maxim magazine and others) and perhaps 'the education of millionaires' (dont think it was written by an actual millionaire though). Dont get caught up in reading/analysis paralysis, those should be enough to set you up with what you need to know and start taking action.

About investing. I cant speak about real estate cos i havnt looked into it to much- but when it comes to the stocks, currencies, commodities etc- basically gambling so i wouldnt go there. Especially if your not a maths whiz. Almost all the guys that are succesful at that game studied maths/stats/computer science at a high level- though there are other ways of going about it like rickson9 on this forum. Even still, no easy- then again making money isnt easy or everyone would be doing it.
Im studying maths and economics and looking to get involved in that game but if i could go back 4 or 5 years id tell myself to focus on something else. Also £200,000k isnt really enough to live off of and trade (20%+ annual returns are considered exceptional) so youll have to bring in some money from somewhere else and im guessing the uni->good job route isnt your 1st choice?

Id focus starting a business online- thats what most of us on here are trying to do for a good reason. Youve probably already realised this, but MJs book will fill you in some more.

Good luck!

 

[andviv]

Welcome to the forum.

And congrats on your winnings.

I work as a kitchen porter.

Well, if you have no idea what to do next, do nothing. Do not touch the money yet. And get back to work.

Give yourself more time to think about this.

And start asking yourself questions like this:

At work, how can XYZ could be done better?
What service/product would make clients want to pay more and get more?
If I were the owner of this business, what would I change right away to make it better?
What aspects of this business I have no clue about?

Try to understand this business from an owner perspective.
Change your way of looking at things.
Think as a producer and provider, not as consumer or user.

I hope that helps.

 

[The-J]

That's awesome. But if you're going to start a business, know that you haven't skipped the hard parts just because you have some 198k pounds. And 198k pounds will not get you passive investment income, either.

If you don't want to start a business (and I can understand full well if you don't), learn investing and keep your job. But... LEARN investing. Don't even touch your money until you can invest confidently. Your goal with investing is to maximize your wealth so that in 10 years or so, you're a millionaire.

The Slowlane isn't all bad, if you leverage Fastlane strategies.

 

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[Knowledge Kick]

Welcome and congrats!

 

[fuggles]

That's awesome. But if you're going to start a business, know that you haven't skipped the hard parts just because you have some 198k pounds. And 198k pounds will not get you passive investment income, either.

If you don't want to start a business (and I can understand full well if you don't), learn investing and keep your job. But... LEARN investing. Don't even touch your money until you can invest confidently. Your goal with investing is to maximize your wealth so that in 10 years or so, you're a millionaire.

The Slowlane isn't all bad, if you leverage Fastlane strategies.

where do I learn about investing ? what is it ? How do I do it ?

Also, how would I start a business, I have an idea. what do I do next ?

 

[Skys]

Also, how would I start a business, I have an idea. what do I do next ?

Read it (again)

 

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[The-J]

where do I learn about investing ? what is it ? How do I do it ?

Also, how would I start a business, I have an idea. what do I do next ?

Start with the book "The Intelligent Investor" by Benjamin Graham. It teaches very simple and effective investment strategies, mainly about value investing. Ben Graham made Warren Buffett a billionaire.

Also, read MJ's book "The Millionaire Fastlane ". It's essentially an entrepreneurship 101 book and if you read it with the same mind that you read "Intelligent Investor", you'll get the idea of which companies will be good buys and which ones are creating no value at all.

There are tons of other books to read, but read those first. After reading Fastlane, decide whether running a business is right for you. Entrepreneurship is a lot of hard work, whereas investing isn't really work at all if you know what you're doing.

Here's some non-affiliate links to the books (I expect you're in the UK?)

http://www.amazon.co.uk/The-Million...8102/ref=sr_1_1?ie=UTF8&qid=1342027558&sr=8-1

http://www.amazon.co.uk/Intelligent...=sr_1_1?s=books&ie=UTF8&qid=1342027579&sr=1-1

 

[JEdwards]

I would Buy the new Bentley SUV and roll it on 24's...

but that is just me..

 

[The-J]

I would Buy the new Bentey SUV and roll it on 24's...

but that is just me..

He's 22 and lives with his parents. What does he need an SUV for?

Get a Ferrari instead.

 

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[CryptO]

Whatever you do. Don't lose it.

 

[JEdwards]

He's 22 and lives with his parents. What does he need an SUV for?

Get a Ferrari instead.

It's tough to roll a Ferrari on 24's...

 

[The-J]

It's tough to roll a Ferrari on 24's...

Sounds like you speak from experience... :smxF:

 

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[townhaus]

where do I learn about investing ? what is it ? How do I do it ?

I have been studying trading/investing for years. Its a rabbit hole. Im not convinced that value investing works.
Look at the top performing hedge funds in the world (professional investment firms)- They invariable employ quantitative strategies and are run by team of PhD scientists and mathematicians (P.S im studying maths and economics for this reason)- I see very few well performing value funds (some are bound to do well due to randomness). I dont think benjamin graham died rich either. Warren Buffet is exceptional at what he does- perhaps you are the next buffet but odds are against you (then again- you defied the odds with that lottery win lol!)

Id suggest earning enough to be able to invest in a hedge fund (theres laws surrounding this) and leave it to the pros. Theres only one I would trust with my money- Winton Capital.

Other than that- Google these: CXO advisory, Stockbee(highly recommend) and CANSLIM(William O'neal) and also look into Rickson9's strategy on this forum- interesting strategy and has a good track record. Perhaps he can chip in with some advice?

Theres a lot of information out there on trading and investing and a lot of bullshit. Good luck separating the wheat from the chaff if you have no idea where to begin.

Last piece of advice- if you do stumble on a strategy- test it on a demo account for 3 years before investing any real money on it. Do you have the patience and discipline?

 

[The-J]

Value investing requires a type of personal intuition that not everyone develops. So it's technically a safer bet to leave it to equations and past patterns. That's why hedge funds use them.

 

[Mike39]

Here's what you should do, send all of the money to me, continue daily life knowing you made someone very happy, just PM me

 

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[Kak]

You read all of those books and still know nothing about money? You trade it for value. Decide on what you want that value to be. Your own business, stocks, futures, or a lambo. Thing is it would probably be your last lambo if you went that route.

Just make sure that you bust your a$$ on the specifics and learn all you can about what you choose.

 

[andviv]

You trade it for value.

If that is the case then buying a flat or a house makes sense... at least they get some rent money, or they can move in there themselves if needed.

But again, without the right education/learning, I see no good investment can come out of this unless you are lucky. (--and I don't mean college-type of education, simply learning about a specific investment vehicle, be it RE, e-commerce, stocks market, etc etc etc)

 

[Milkanic]

Put it in a high yield saving account for now and start reading.

The 99 Best Business Books - Recommended Reading List

 

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[911Carrera]

No one here can tell you any guaranteed way to grow that money. Put that money away, read some good entrepreneurship and business books until you understand them, look for ways to provide value to people and start a business. A business is the only way you're going to grow that money. No business is guaranteed to succeed because there are too many valuables involved in what makes a business succeed including the personality, intelligence, drive, work ethic of the people running the business, and the timing of your business. So there you have it. Taking anyone's advice on which business to start will set you up to fail. Educate yourself and make your decisions. You can live with the results if you do your due diligence.

 

[devil 2000]

First, sorry for bad english.

DO NOT SPEND THIS MONEY ON INVESTMENTS !!!!!!!
It is the most common mistake of lottery winners.
There is no safe bet, or safe investment, that you can do with 22.Period.

First read some articles about lottery millionaires who lost all their money on investments they don't understood.

The best you can do is to leave it in the bank, in pounds, with annual percentage income.

This is small amount of money to call yourself a rich man, but a large sum if you want to make savings.

In bank, you will get about 5% annualy, which is about 800 pounds a month, which isn't much, but it is nice addition to your monthly income.

 

[Kak]

First, sorry for bad english.

DO NOT SPEND THIS MONEY ON INVESTMENTS !!!!!!!
It is the most common mistake of lottery winners.
There is no safe bet, or safe investment, that you can do with 22.Period.

First read some articles about lottery millionaires who lost all their money on investments they don't understood.

The best you can do is to leave it in the bank, in pounds, with annual percentage income.

This is small amount of money to call yourself a rich man, but a large sum if you want to make savings.

In bank, you will get about 5% annualy, which is about 800 pounds a month, which isn't much, but it is nice addition to your monthly income.

If I could get 5% annually in a bank I could retire. Not gonna happen buddy. I got 6% last year from a good investment firm.

Sent from my HTC PH39100 using Tapatalk 2

 

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[The-J]

First, sorry for bad english.

DO NOT SPEND THIS MONEY ON INVESTMENTS !!!!!!!
It is the most common mistake of lottery winners.
There is no safe bet, or safe investment, that you can do with 22.Period.

First read some articles about lottery millionaires who lost all their money on investments they don't understood.

The best you can do is to leave it in the bank, in pounds, with annual percentage income.

This is small amount of money to call yourself a rich man, but a large sum if you want to make savings.

In bank, you will get about 5% annualy, which is about 800 pounds a month, which isn't much, but it is nice addition to your monthly income.

Find me a bank that can give me 5% annually and you'll have found me the bank I use for the rest of my life.

Bank savings accounts give somewhere in the range of ~0.1% or so, in most developed countries. CDs typically go around 1%. I don't know where you're from, but 5% is ridiculous for a bank savings account.

You have a good point though: many people find themselves with a lump sum and then they try to invest it all, but fail. The only way to not fail is to not invest. 198k pounds is a damn nice savings at 22. But he can learn to invest wisely.

 

[EastWind]

Keep doing what you are doing, keep reading, keep learning. Beware of hungry wolves out to get you under the guise of helping you. When it's time for you to do what you have to do, you will know. Keep learning. Don't just read about money. What are you good at? Nothing? build up your skill set. Might be time to take a class or few to study that thing you wish to do.

 

[deepestblue]

If you start a business, start SMALLLLLLLL (think, under $200), and only grow it when you see results i.e. PAYING CUSTOMERS. Grow only as the existing cash flow warrants and be profitable all the time. Alot of people who "talk big" re: business have never once in their lives stuck their necks out on the line and are living their entire lives thanks to other people's money and risks others have taken. Also wonderful to see that you are reading from success mentors such as Jim Rohn: This tells me you have your head on straight and will do fine no matter what. People like Mr. Rohn and Brian Tracy are straight shooting advisors who teach you what are the underpinnings of a successful life. Do you know how many in their 20s would have blown through 1/2 or all of that money already? Good work, keep it up.

 

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[PHD]

If I could get 5% annually in a bank I could retire. Not gonna happen buddy. I got 6% last year from a good investment firm.

Most banks in Australia will give you 5% annually, as long as the account is under (most commonly) $500 000 - $1 000 000, not helpful for fastlaners I guess but handy for someone who came into a lump sum of money. I know this is not useful information for the OP but I just thought I would mention it as I was shocked to recently discover the low rates offered by banks in the States, UK etc are. Obviously the cost of living is lower in other developed nations.

 

[Pat]

Read a lot of books.

Personally I would put it into gold/silver right now instead of a savings account. I don't like whats happening to our fiat currencies at the moment.

But don't invest in anything that you don't have a clue about. And diversify.

 

[danoodle]

Find me a bank that can give me 5% annually and you'll have found me the bank I use for the rest of my life.

Bank savings accounts give somewhere in the range of ~0.1% or so, in most developed countries. CDs typically go around 1%. I don't know where you're from, but 5% is ridiculous for a bank savings account.

You have a good point though: many people find themselves with a lump sum and then they try to invest it all, but fail. The only way to not fail is to not invest. 198k pounds is a damn nice savings at 22. But he can learn to invest wisely.

I believe the bank of mongolia offers over 10% returns in a savings account. Kinda insane, I know but check them out. Just google bank of mongolia to go the official site. Also, the mongolian togrog was the best performing currency in the world in 2010 apparently. From what I have read, Mongolia is an up-and-coming country with a vast amount of natural resources and would potentially be a great place to invest in.

This is all just my opinion based on what I have read so DYODD. I'd be curious to hear what GlobalWealth would have to say on the issue...

 

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[The-J]

I believe the bank of mongolia offers over 10% returns in a savings account. Kinda insane, I know but check them out. Just google bank of mongolia to go the official site. Also, the mongolian togrog was the best performing currency in the world in 2010 apparently. From what I have read, Mongolia is an up-and-coming country with a vast amount of natural resources and would potentially be a great place to invest in.

This is all just my opinion based on what I have read so DYODD. I'd be curious to hear what GlobalWealth would have to say on the issue...

I'm reading 1% monthly, so comes out to ~16% annually. I also saw that one of Mongolia's banks was offering 9% savings accounts to Kiva clients.

Damn... now I'm curious... by the time I make my money, I don't know if Mongolia will still be offering the same rates, and even if they were, they probably wouldn't be offering them for very long.

 

[theag]

Seems like Mongolia has a greate climate for entrepreneurs right now.