“When I win the lottery I’ll….” or “If I win the jackpot I’ll…” is something that most of us have said – or at least thought – but what should you really do?
There are many stories out there of people who have won millions and have mistakenly wasted their fortune ending up bankrupt sleeping in a tiny apartment having blown the lot.
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We heard even worse stories of people who’ve still got their money but have lost friends and partners and made many enemies because of it. Michael Carroll is a good example of a lucky man who won the UK National Jackpot of $ 13.5 Million in 2002 at the age of 19. He spent all his fortune in partying, buying expensive jewellery and luxury vehicles. By 2010, Carroll was so hard up he was forced to return to his former minimum wage job to make ends meet.
To avoid becoming a rags-to-riches-to-rags-again, consider these tips on how to make the most of your winnings without squandering them along the way and keep also your friends.
Double check before claiming the prize
Once you calmed down after hitting the big prize, it’s obvious that you’ll want to get all that money instantly. Not so fast. “Relax, take a deep breath, and make sure that you have won the jackpot or the lucky numbers before you get too hot and get ashamed after publicizing the false winning.
Now that we are all sure you have won the big prize, follow the next professional advice:
$1$
Hire competent advisers
“Acquiring a massive amount of money may increase your stress which, in turn, leads to poor decision-making. Often, lottery or jackpot winners have no experience handling this kind of money, so it’s crucial to seek out financial planning assistance from a trained professional.”
Some have experience managing their regular income, but when the net worth boosts suddenly to some exponents, it’s a whole new ballgame — and you’ll want a few strategic plans.
The best thing that someone can do if they win the jackpot prize is to first identify an attorney, an accountant, and a reputable financial adviser. It’s best to have all of these advisers in the same room together, so that they can work together to structure the best strategies for claiming your prize and long-term management of your prize.”
$2$
Try to remain anonymous
Strangely a woman in New Hampshire remained anonymous after winning the $560 million Powerball Jackpot. Her decision about winner’s privacy increased the public’s interest in knowing her identity.
Your lawyer should investigate of claiming your prize remaining anonymous. Otherwise, you’ll have every person you’ve ever met (and some you haven’t) banging down your door looking for a payday.
The more people that know how much money you’ve won, the more requests for handouts you can expect. “Additionally, letting everyone know how lucky you are putting a target on your back. Scammers, thieves, and worse could suddenly want to track you down to make your luck their own.”
That’s the reason why more people are betting online to avoid disclosing publicly their identity.
$3$
Hang onto your job… for now
Many of us dream of winning the jackpot so we can have the longing moment and tell our bosses to take this job and shove it.
Drastic changes may lead to a disaster; therefore, you should keep your job until you have a clear idea of what you’re doing with your time and your money.
Remember that humans need a routine to feel secure, and until you don’t have a good plan, it’s better to stay where you are although you may not be happy.
$4$
Cash your prize and keep it save
The sooner you cash the prize the sooner you will secure your money. Don’t wait until your heirs could be stuck claiming and paying massive taxes.
The more you spread the winnings to different banks the better to secure your fortune at least temporary, until you have a good plan.
$5$Pay off all your debts
Before you go on that lottery-winning shopping spree, practice smart personal finance and pay off all your debts. Credit cards, vehicles, school loans, and mortgages should all have a zero balance if you can afford it. You’ve literally won the opportunity to start over and you can only do that once you clear the proverbial slate of what you already owe.
If you are already debt-free, you can make the smart money moves you’ve always wished you could, like buying an investment property in a developing area, improving your skills with an MBA, do some savings plan for your kids, or opening a mutual fund.
$6$Save enough cash to run the future
After your existing debts are covered, focus to planning. Set up a retirement investment account with at least a $1 million, if your winnings allow it. If your jackpot wasn’t in the millions, I recommend putting away 50 percent of whatever’s left over after zeroing out your balances. At least this way you’ll have a safety net if things don’t go according to plan down the road.
Add up your basic expenses and create a ‘personal pension’ to at least meet those expenses,” he says. “Imagine when you retire and know that, no matter how long you live, your basic needs are always covered. How do you know you are in an optimal situation? The risks in retirement are neutralized.
$7$Create a budget to manage the money
The secret to staying rich — as plenty of rich people will tell you — is watching what you spend while minding your budget. You may think you have more money than you could ever blow through, but lottery winners end up bankrupt regularly because they had no structure when the dollar signs filled their eyes.
Even though you’ve gained an influx of money, it’s still essential to develop a foundation and stick to a budget. Determine how much can be spent on monthly expenses, how much to save and how much can be allocated to discretionary funds. Creating and maintaining a budget is one way to have success and ensure that the money lasts longer than the excitement of when it came into your life.
$8$Avoid fake friends looking to suck your money
Moving to a new neighbourhood, make phone numbers private, and increase the security on social media accounts, that’s what I would do if I were a jackpot winner. I’d also cut out all those toxic people who were never around much but suddenly show their faces when I’m rolling in dough. No thank you.
Frequent people that have your best interests in mind. With an increased net worth, all types of people can come out of the woodwork to ‘support’ you, however not everyone will, and some people may even want to take advantage of you.
$9$Pack your bags and get out of Dodge
You’ve had a lot going on the past few weeks, what with winning the lottery, quitting your job, straightening up your finances, and dodging all the money grubbers, and now it’s time to relax.
Pick the one place you’ve always wanted to go, turn off your phone, hop on a plane (first-class, of course), and chill. All the chaos you left will be there when you get back, but for now just enjoy the lemonade that life has handed you.
$10$Change a loved one’s life
I’ve always maintained that if I won the lottery, I would gather up about 10 of my friends and family and hand them checks that will change their lives.
I’d make them all sign legal documents that dictate how they’d spend it — paying off all their debt, setting up retirement and college funds, and making at least one long-term investment — but whatever is left, they can do what they want. Like send me a thank-you note.
$11$Go shopping and treat yourself — but don’t go crazy
It’s easy to shop ’til you drop after claiming all that cash, but it’s a trap — a fool’s game that will only satisfy your impulses while making a sizable dent in your winnings. Treat yourself to a few things that have been on your most-wanted list — mine is a jet ski — but try to quell your desire to own all the junk money can buy.
It might help to consult a confidant when you feel the urge to shop. One person you trust to tell you to “stop being an idiot, you don’t need this or that, and to put it back before I punch you.” If you don’t have one friend like that, get one. They’re great to have around, lottery winner or not.
$12$Open your heart to local charities for donations
A perfect world is where everyone has at least the basic needs covered. Why not to set aside some regular donations to those charities, preferably near you, but make sure to select the more reliable.
Think about investing in your own community — like providing to the local animal shelter or food bank or helping fund a project that will enhance the quality of living for residents — where you can see your money in action.
The one who gives to charity, receives more (happiness).
$13$ Plan your lasting legacy
As we just leave in this world temporary, you should think of your legacy. As a jackpot winner, you have the chance to make a real impact — money makes the world go ’round, after all — so try to live your best life with the luck you’ve been given. Share the wealth, too.
Not with everyone, but at least set up your immediate family — children and grandchildren, specifically — for success through inheritances and trust funds. No obligation, though. If you’ve got six months to live and you want to go out with a bang — and zero dollars in the bank — you do you. Maybe your luck will rub off on those poor suckers, but at least you enjoyed the ride.
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