Imagine playing the lottery one day, and then receiving a notification days later, saying that you’ve won. What will you do with the lottery winnings? Climb up the stairs and scream on top your lungs? Or sit in the corner until you process the shock?
See nobody can predict what will happen to them, and they can’t predict even less what will happen with the lottery winnings. Is it real? Or is it a prank from your family or close friends. All thoughts are going through your head right now, all thoughts besides how will you manage that money. Isn’t that right? You’re already thinking about that house on top of the hills, but you’re not thinking about which stocks you’re investing in.
A few seconds later when you finally realize that you’ve really won the jackpot, you finally feel the blood circulating again and your heart pumping with excitement. You’re probably running to your phone now, so you can call your significant other, mother or best friend. But wait!
Don’t make any decisions. Any small decision can affect you in the future. And that is why we came up with a list of the best things to do with lottery winnings. So you can avoid making mistakes like others before you did.
Process your win before claiming it
The first thing you need to and the best thing you will is to actually calm down. Knowing that you’ve hit the jackpot is a life-changing event, it doesn’t happen every two days, and it’s certainly such a big of a responsibility.
So before you make any rash and bad decisions, you need to relax, and take a deep breath, and accept your lottery winnings. Winning the lottery is an event that will either make you rich for life or broke for life. And I bet you’ll do your best to avoid the latter one because you’ve bought a ticket just to change your life and become rich.
The stress of having so much money now will make you commit so many mistakes and so many regrettable choices. So the next best decision you’ll make is to actually admit how you can’t handle all of this money yourself and hire financial advisors.
Hire the best team you can
As it’s been said, the next best decision you’ll want to make is to hire financial advisors. So what kind of team should you hire? You’ve got attorneys, financial advisors & accountants. Why? Well, just after you win, you’ll want to pay your taxes and start investing.
If you’ve never been good with money you’ll want someone to guide you along the way and show you what decisions to make. That’s what financial advisors are for. They’re there to show you the way, calculate the risk, see the best options you have and make the best decisions they can.
Accountants will be crucial once you start investing and making money, you’ll want someone to do your accounting correctly so as to get taxed the legal amount you have. Without any cheating. And attorneys are there to save you in case you make any mistakes. They’ll guide you through the initial steps of taking the lottery winning, and will be there for any legal advising or there to help you set up your business.
So is it clear now why you should hire a team? But before you do, make sure you chose the best people on the market or the most recommended one and honest ones. You wouldn’t want scammers or employees that will stab your back. You’d want employees that will be there for you for life.
Avoid sudden lifestyle changes
Getting a check for one millions of dollars will certainly change your life, and sometimes it’s not for the better. So what will happen when now all your surroundings and everywhere you go seem like temptation? Will you give in or will you be patient?
Lottery winners often have sudden lifestyle changes and start living a new life they’re not used to. And that’s the biggest mistake you’ll commit if you ever win the lottery. Sudden life changes can be hectic and stressful.
Get out of this toxic cycle of spending money and living the luxury and think about the aspects of your current life that you love most. The things you do, your routine and the people that are a part of your life.
Think about every single little thing, and then put a list of the people and the things you want to keep in your life. This way you wouldn’t have to change everything about how you’re living. You’ll get to keep the best things in life and still change it at the same time for the better.
But all you need to keep in mind is to avoid is mindless spending because it’ll be the end of your wealth if you don’t control yourself.
Meet a tax pro before you do anything
When you go to cash out your money, you’re left with two options, either take a lump sum or take 30 instalments over 29 years as a form of an annuity. If you take the lump sum payment then you’re left with one option. To pay the whole tax immediately.
There’s no going left or right. Once you cash out your whole prize, the state will be there looking for you and for their taxes money. But financial advisors actually recommend taking the lump sum only if you’re good with money and can make reasonable choices and invest your cash really well.
But for those out there who are no good with money and all they can think about is buying a Ferrari and signature outfits, maybe the annuities are better for you. But the annuity isn’t all sunshine as well.
Most of the people who take annuities need to consider life insurance because in case the person dies, life insurance will cover the estate tax bill. So that’s how it goes.
If you’re not sure about which decision to make, then you’ve got 60 days in total to think about what to do and list down the pros and cons of each one. This way you won’t regret the decision you make.
Protect your assets
Now if you start investing and creating your own company, you’ll need to protect your assets as well. People who are worth millions and billions always need to protect themselves against losing assets. Every time scammers or greedy people hear or smell a sign of money, they’ll do anything to taste it.
They will be waiting for you to do anything so they can sue you. “oh you touched me with your car? I’ll sue you.”. “Oh, yesterday you were so noisy, I’ll sue you”. And the list is long. So make sure you’re not an easy target for everyone.
Protecting your assets can be done in many different ways, mainly by securing your money in the bank and not giving anyone access to your credit cards, hiring attorneys that will protect you at any given moment, creating limited liability companies, and so many other different things. So make sure to speak with your attorney before doing anything, as they’re most suitable for giving out this kind of pieces of advice and strategies.
What do you guys think of this article on what to do with your lottery winnings? Do you have any other strategies in mind that I forgot?
