Trending
To you buy a lottery ticket as the jackpot approaches a billion dollars? I do. Spending $2.00 seems acceptable when the payoff is so huge. Your clients likely do the same. You start planning ahead before the drawing: “What would I do if I won the lottery?” The drawing takes place. You don’t wine. You are disappointed. Your client feels the same way, unless they are the lucky one who eventually wines. As a professional, this can be an opportunity to talk a little about financial planning.
Why is your client upset? Their dreams are shattered. They were going to do all this cool stuff. Now it is not going to happen. Start by asking them what they would have done if they won the lottery? This leads into how they can still do some of the cool stuff, although not on a grand scale.
If I won the lottery I would:
1. Pay down all my outstanding debt. If your client mentioned this objective, congratulate yourself on having done a good job as their financial advisor! This is an issue you can help them achieve. Start by looking at how much debt they have and how it is accumulating. See what you can do to stop making the hole deeper. What are they paying in interest to service the debt? What can they do to lower this expense? Are there cheaper credit cards out there? Does prudent use of a home equity loan make sense? Can they continue making the same payments, yet take advantage of lower interest rates, using the excess to reduce the outstanding principal? Where is their annual bonus going? You know where it should go.
2. Buy a Caribbean island. You would not be the first wealthy person with this dream. How often would you visit your island? Probably less than you might imagine. You can still have the experience by renting a house on an island or staying at a small resort. This might be done in the shoulder season when the weather is still good and airfares are cheaper.
3. Tour the world. I have heard an urban legend on this subject. When the UK first introduced the National Lottery, newspapers interviewed people, asking what they would do if they won. Fly on Concorde and book a world cruise on the QE2 were among the most popular answers. Your client can research “round the world” airfares. They can be quite a good deal if they have the leisure time and keep flying in the same direction. The world cruise on Cunard’s Queen Mary 2 or Queen Anne start at about $17,000 per person for the 100+ day voyage.
4. Become a philanthropist. You might want to give away a lot of money, but you could start with giving away smaller amounts and work your way up. As a financial professional, you know about Donor Advised Funds. You and your client could set one up. In many cases you can even name it. They put in money and direct where some or all of it goes. As They get wealthier, the amount they give to charity can grow.
5. Buy an exotic car. You might have always wanted a Ferrari. Perhaps you are a Rolls Royce fan. You always wanted to own one. These cars have been around for a long time. You might rent one and enjoy it for a weekend. If you really liked the experience, you might consider purchasing a used one. This becomes your new hobby. They can be surprisingly inexpensive because the maintenance costs are high. Still, it’s your new hobby.
Your client does not need to feel depressed about not winning the lottery. They can still realize their dreams, although on a smaller scale. This can be an excellent beginning of new conversations about financial planning.