So You Just Won the Lottery… Now What?
With the Powerball jackpot now creeping into the billion-dollar range, I’m sure many of us will be spending our workday daydreaming about how we’ll spend our winnings.
But how certain are you that you’ll actually be able to maintain your fortune? While a billion dollars may seem like a lot of money, many lottery winners eventually find themselves broke and in debt. So, to help make sure your winnings don’t lead you to financial ruin, here are some tips on what you should do after hitting the jackpot.
1. Lay Low and Stay Calm
While you’ll probably feel compelled to jump for joy and shout from the rooftops, it’s important to keep a level head amidst all the excitement. While you might want to brag about your recent windfall, doing so carelessly can put you into serious danger. Not only will you have countless friends and family members crawling out of the woodwork looking for a handout, but you’ll be a hot target for scammers and thieves as well. Do your best to stay anonymous for as long as you can and focus putting together a team of professionals to help you manage your money.
2. Assemble Your Team
Seek out a trusted lawyer, financial advisor, and certified public accountant to help you make sense of your newfound fortune. Believe me, you’re going to want help when considering investment choices, navigating your tax situation, and avoiding scams. It’s best to piece together your financial posse before going to claim your winnings. Having a stable team of trusted professionals in place before you even collect a single cent can make the transition to being a millionaire significantly easier.
3. Decide: Cash Upfront or Over Time
Lottery winners have a choice of taking their winnings in a lump sum or over a 30 year period. While it might be tempting to get your money as soon as possible you should consider the fact that many lotto winners wind up broke, many within only a few years after receiving their winnings. Make sure you talk over the options with your team of professional advisors so they can help you determine the best choice for you.
4. Take Care of Your Financial Needs Before Your Wants
While it might be tempting to immediately buy a house in the Hamptons or your own private yacht, you can’t let the sudden influx of money interfere with your ability to make smart financial decisions. Before indulging, you’re going to want to consider your financial needs. How prepared are you for retirement? Do you have any outstanding debt? How’s that emergency fund looking? Tackling your financial needs before satisfying your wants is a sure way to remain financially stable. Ignoring those needs however (even when you’re sitting on close to a billion dollars) is a sure way to send yourself spiraling back into fiscal chaos.
5. Budget. Budget. Budget.
Yes, even when you’re rolling in dough, you’re still going to need a budget. While not every millionaire may employ a well-built budget, those that do tend to experience a greater degree of financial stability. Budgeting, alongside solid advisement and smart money habits, can help you maintain and even build upon your wealth.
Once you’ve completed building your financial team, taken care of your financial needs, and built yourself a suitable budget it’s time to enjoy your winnings! While it’s important to make sure to ensure your finances in order, there’s nothing wrong with treating yourself from time to time, especially if you’re the recipient of a hundred-million dollar windfall! So get out there and buy yourself a $5,000 hamburger or that $900 Japanese toilet seat. You’ve earned it!