Lottery winners are making it to the news every year for losing multimillion dollars because they weren’t all that ready to handle their newfound wealth and all the expectations that came with it. But let me ask you…if you win the lottery, what would you do with the money?
If the first thing that came to mind was to splurge on luxuries, then you might be the next one-day millionaire someday. Winning the lottery requires preparation and the right mindset, which most lottery winners didn’t have then.
You’re lucky to be here, though! It’s time to learn what you should do in case you win the lottery. You’ll learn the things to do before claiming your prize, during the prize-claiming process, and once the money tap starts rushing.
1. Protect Your Privacy
For sure, it’s pretty hard to contain yourself and your excitement right after the news broke out that you’ve become a multimillionaire overnight. You might want to scream at the top of your lungs and tell everyone about the coming fortune.
However, protecting privacy should come first. You should keep yourself anonymous to keep your lottery winnings safe away from people who desire them — may it be from bad actors or from relatives who want to take advantage of your riches.
For instance, you find yourself watching the latest lottery draw, and you find yourself becoming the new winner. If the word goes out, there’s a big chance that you’ll be flooded by financial requests from friends, co-workers, neighbors, and acquaintances who have heard the news. It’s never bad to give, but make sure that the people who you” give money to will not take advantage of your kindness and generosity.
Remain anonymous if your region can permit it.
2. Think Before You Act
If you have ever fantasized about winning a lottery, you must have had a luxury dream inside your head. However, before spending the money on hundreds of thousands of dollars, extravagant mansions, and tropical vacations— think before you act.
The shift from someone penniless to a multimillionaire can get overwhelming, so it’s better to sit back and meditate on what the future may be if you spend all your money in one go. Force yourself to control the exciting chaos that chaos happening in your brain.
3. Assemble A Legal Financial Team
Since what you’re getting is a massive amount of money, you will need to seek out help from professionals on how you should handle it smartly. Without a legal or financial team, it would be so easy for you to splurge your winnings on things that don’t really matter, like extravagant dinners, vacations, clothes, and night-outs.
By having professionals by your side, you can make wiser decisions and investments that your future self will thank you for. Select good lawyers and accountants, and attempt to create a reliable team. Be cautious in handpicking them because you need someone whom you can trust fully in your journey to a millionaire lifestyle.
Once you have selected a team, you can begin brainstorming on potential investments, retirement plans, and even college funds for your little kids. Go for financial plans that correspond to the goal you have for yourself.
4. Invest
Shark Tank stars Mark Cuban and Kevin O’Leary have opposing views when it comes to securing cash prizes. According to O’Leary, “Invest in low volatility dividend-paying stocks. You’ve won financial freedom. Don’t screw it up!”
On the other hand, Cuban believes that money should be placed in a bank because a lottery winner isn’t an investor to begin with, and he could just end up losing his money if he invests without knowing what he is doing. “You don’t become a smart investor when you win the lottery. Don’t make investments. You can put it in the bank and live comfortably forever. You will sleep a lot better knowing you won’t lose money,” Cuban said.
5. Divide Your Lottery Winnings
Many people aren’t aware of this, but lottery winners actually have an option between getting the complete amount in one go with a lump sum or by dividing earnings into 30 installments either yearly or every decade.
Instead of getting the lump sum which is pretty overwhelming to manage, you could go for the annual option instead. This way, you will have a good amount of money coming into your household every single year. Moreover, the tax becomes less significant to pay when you get the lottery money in installments.
6. Don’t Quit Your Job Yet.
Winning the lottery means having the capacity to buy luxury items, but aside from that, it also allows winners to retire anytime they want. It’s a great chance to break out from the never-ending and tiring 9-5 job. However, don’t get too caught up with the moment, and don’t rush into quitting your job just yet.
It takes time to invest, protect, and secure your assets properly, so resigning from your job immediately isn’t a feasible idea. Before completely quitting your job, make sure you have already laid out a plan for your future.
7. Pay Off Your Mortgage
If you would ask any mortgage holder what they would want to do if they win the lottery, they would probably answer that they’ll completely pay off their mortgage. A completely paid mortgage can help ease the mind from big financial obligations.
Paying off mortgage debt in full can help get rid of the yearly or monthly interest rates, saving you so much money you can set aside for savings or investments. Explore through your provincial real estate and see if there’s an available property that could become your second home.
Since housing is always on-demand, you can rent out one of them to make some extra bucks on the side. This way, you could receive passive income every month.
8. Protect Your Assets
Legal troubles surround people with a lot of money. For instance, your ex-spouse is looking for a large divorce settlement. Even a complete stranger can sue you for the tiniest things to benefit you financially, so you really need to protect your assets.
Millions of dollars are at stake, so you need to take precautions by having superstar lawyers, master accountants, and even 24-hour security.
9. Secure A Future For Your Family
The lottery jackpot is enough to last a lifetime, but if you want to secure the future of your family, you need to make it last several lifetimes. Historically, rich families who didn’t think of securing their wealth that far ended up broke after several generations.
If you don’t want your kids to suffer the same fate, you need to create generational wealth that can support your children and the children of your children.
