They call it the day of illusion. That is none other than the December 22th, when the Christmas Lottery draw is held. Neither more nor less than a total of 2,590 million euros in prizes are at stake. For the most common of mortals, the one who has a tenth (whose cost is 20 euros), the prize that can fall into their hands if they win the jackpot is 400,000 euros (of that amount, the Treasury keeps 72,000 euros ).
Finish paying the mortgage, buy a car, take the trip of your dreams… these are some of the wishes that those who participate in the raffle have in mind if they are finally awarded the first prize. Decisions that are not always fortunate and that can turn a day of joy into sadness.
So that this does not happen, we tell you How you can get the most out of your prize moneywhat taxes you will have to pay, and how to ‘distribute’ the money: investments, amortizations, help to family members…
What to do at first?
There is a very Spanish saying that says that “money does not buy happiness.” To which many people add that “it doesn’t bring happiness, but it helps.” The truth is that receiving a large amount of money unexpectedly produces euphoria. But in the long run, if not managed well, it can become a nightmare.
A data: 70% of Christmas Lottery winners have much less money five years later having won the award, according to a study by the European Financial Planning Association (EFPA).
[Estos son los errores más comunes cuando jugamos a la Lotería de Navidad según ChatGPT]
To ensure that this is not the case, the financial entity Abante has prepared a document with a series of recommendations. And the first of them is “do nothing with the prize money for a period of several months to get used to living with that extra amount.” Why?
The end is none other than “avoid making hasty decisions”. Driven by euphoria, “it is very common to get carried away by emotions, want to treat yourself and end up making a bad investment.”
Why is it good to determine the risk level?
Paying off the mortgage or even leaving your job are recurring thoughts. But before spending or investing, you must keep in mind that the prize is not that large (if we mention the first three), because the Treasury will keep a part of them.
With this reservation made, Spaniards tend to have a conservative profile in terms of investment and savings. Checking accounts, deposits and even Treasury Bills have been the favorite products. But beyond security, other aspects such as taxation or inflation must be analyzed. Therefore, think about whether or not the profitability of the product exceeds said inflation. An example: if the 328,000 euros of the first prize are not invested, after two decades, and with an inflation of 2%, that money would be equivalent to about 220,734 euros today.
Christmas Lottery Tickets.
“The first step is to set the financial objective that is needed and that is marked by the difference between what one has and what is needed,” they explain from Abante. “That’s what’s going to happen. determine what level of risk can be assumed and what portfolio or what financial asset is the most appropriate depending on each particular case and the overall picture at the asset, financial and tax level.”
A decision that depends on the person’s liquidity needs, the term available, their risk profile and their financial objectives: private equityinvestment in real estate or listed assets.
Diversified portfolios or mortgage?
If you opt for listed assets, to maximize the prize money it is important to have diversified portfolios “both by geographical distribution, as well as by sectors and type of assets.” This is what Abante believes, and they also point out that, if you have a long investment time horizon, “you can take on more risk.” And that will translate into greater final capital.
For example, according to Abante, if you want to beat inflation by 2 points (that is, achieve an average annual return of 4%) you would have to invest in a portfolio with 50% of the investment in variable income: “An option that allows diversification, that has tax benefits and that allows access to professional management are investment funds.”
[La recomendación que tienes que seguir para comprar un décimo online de forma segura]
And what to do with the mortgage? Is amortizing a good option? “It doesn’t have to be the most appropriate,” they point out. And they argue it in the following way: “You always have to do an analysis of the particular situation to see If the return on the money invested is greater than the cost of financing because, in that case, it would not be interesting to amortize and it would be better to invest that money.”
And they add another interesting point: “Also, it must be taken into account that, if the habitual residence was purchased before 2013, There is a tax advantage in personal income tax (the law allows 15% to be deducted each year from a maximum fee of 9,040 euros) which may not be worth losing.”
[¿Qué juego de azar es más fácil de ganar: el Gordo, la Primitiva o los Euromillones?]
In conclusion, it is advisable to put all finances in perspective and evaluate the most appropriate options for each person from a financial and fiscal point of view. “And always taking into account personal objectives,” they conclude from Abante.
Follow the topics that interest you
2023-12-17 15:52:44
#steps #Gordo #Navidad
