A Hawke's Bay mother is $25.1 million richer after winning Lotto Powerball draw on 29 Feb 2020.
Published in Hawke’s Bay Today on 4 March 2020.
So you're the Hawke's Bay woman who's just won a $25.1 million Powerball prize?
Don't quit your job, and don't make any big decisions for three months, or risk becoming one of the numerous Lotto winners who unintentionally blew it all, a financial advisor warns.
The mother, who wished to remain anonymous, purchased her winning ticket from Auckland's Countdown Manukau City Mall, winning a share of the record $50m Powerball jackpot, as well as Lotto First Division.
Financial Adviser and executive director of Stewart Group, Nick Stewart, who joined the financial services industry in 1999, has warned the lucky woman away from splashing the cash on a "depreciating asset."
"Without a plan, millions can become thousands in no time," he said.
"It is best to take financial advice while you are in the strongest position to do so – start thinking about the future, yours and your loved ones.
"I would say put all the winnings spread across a couple of banks for three months in short-dated cash facilities, don't quit your job, sit back and think about what you want to do."
Hawke's Bay's newest multi-millionaire said she has already set her sights on what to spend her winnings on.
"I've mostly been scouring the internet for my dream car," she said. "I will definitely be buying a house, that's the first thing on my list.
"I would also like a new car. There'll be some travel in the future as well as some other fun stuff."
Stewart said he always warned those with new money to stay away from depreciating assets.
"Say you have a million dollars and spend $400k on a depreciating asset – a boat, for instance – that means a lot of money is spent on it each year to keep it up and running."
Over three quarters (81 per cent) of Powerball winners in 2019 bought a new house with their winnings, while 85 per cent of big winners kept working, remaining in the same job as before their win.
Stewart also said most wealthy people talk about their investments, not their spending.
"Lotto winners should think twice before spending large lump sums and focus on the long term," he said. "The best course of action is to quietly contemplate all options.
"I would suggest in time a globally diversified portfolio of low-cost investments within your risk tolerance. Choosing a globally diversified portfolio means you would benefit from the growth of the entire market over the long-term.
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Published in Hawke’s Bay Today on 4 March 2020.
The information provided, or any opinions expressed in this article, are of a general nature only and should not be construed or relied on as a recommendation to invest in a financial product or class of financial products. You should seek financial advice specific to your circumstances from an Authorised Financial Adviser before making any financial decisions. A disclosure statement can be obtained free of charge by calling 0800 878 961 or visit our website, www.stewartgroup.co.nz
