Winning a lottery is perhaps one of the most exhilarating experiences that one can have. But did you know that these new winnings can also make new issues to arise in your life? Thankfully, proper spending and management of your wealth can help you enjoy the most of it over time.
Getting to know how to manage your winnings can also help you avoid tax bundles and other legal issues. You, therefore, need to spend your lottery wisely and make your money work for you. Here is what you need to do if you hit a 55 million jackpot and how to spend it.
What you should do before claiming your jackpot?
- Keep quiet
Before claiming your prize money, it’s recommended that you keep quiet about it. Although with the current world of social media, it’s hard to keep your winning as secret, you should not necessarily go broadcasting it to everybody. Plus, it’s a good idea to come up with media plan whether that means staying in a hotel or hiring a spokesperson to avoid reports and other people who may be bombarding you with questions before you cash I your winnings.
- Consider going the annuity way
Since winnings can either with lump sum or small payments/annuity, you need to go the annuity way. This is because if you make a mistake and blow out your first annuity you still have another chance to spend the rest of the money well.
- Look for a trusted financial planner
Instead of dealing with the cash windfall alone it’s important to hire a financial planner. When it comes to spending that large amount of cash your situation can get complicated. Your tax situation will not only get complicated but you may easily become subjects to very higher rates of taxes. Remember, you have new tax obligations to look into that you weren’t even aware of before. It’s, therefore, advisable to look for a certified public accountant. You may also get in touch with an attorney to help you with the process and gifting and planning your winnings.
- Enjoy the cash but take note of lifestyle inflation
Although it’s not a bad idea to enjoy yourself a little bit, it’s very important to come with a concrete plan before doing anything. You need to know the amount of money that you want to give out and to which organizations and charities. In general, apart from donation, you should be saving a huge chunk of that money. Remember, if you get used to a lifestyle of enjoying the money you might even forget that the money will never get finished.
- Learn how to say no
It’s a common joke that when you win a lottery you get new cousins and friends that you’ve never even meet before. Chances are families and friends are likely to come to you in droves. Since you risk being called stingy or selfish, it’s going to be rather difficult. You should be very careful with whom you lend money to.
- What to do with 55 million
So, you made the necessary arrangements before claiming your winnings and you’ve decides how you want to get paid. What next? How should you spend the 55 million prize?
- Talk to those whom you hired
If you hired the right lawyers and financial advisers you need to talk to them as often as possible. But if you realize that you don’t trust them anymore you need to get new people. Because this kind of wealth can be overwhelming if you are not used to it, look for professional help and use them to make informed decisions.
- Pay off debt
Whether it’s left over student loans, auto loans or credit cards you need to pay off all the debts that you’ve carried throughout the year. You may also want to maintain your main mortgage as long as it has a low interest. This is because the more money you have the higher the taxes you’ll be required to pay. Either way, you need to do way with all the debts that you have so that you can be debt free.
- Set aside some emergency fund
Did you know that even millionaires can sometimes run into debts that are bigger than even some of us? Starting an emergency fund is, therefore, one of the best decisions that you can ever make. To be on the safe aside, you may set aside enough money to pay for up to 6 months of your expenses if at all something happens.
- Set up some trust money for your kids
If you have small kids you may also set aside some trust money and invest it in a bond fund. Assuming that the money will be earning some interest every year you will have a lot of money to take care of your kids needs in future. This money will also keep them motivated while studying knowing very well that school fee will not be an issue.
- Keep away some money for retirement
It’s also very important to allocate some of the money for retirement purposes such as annuity. One of the worst things that can ever happen is going back to work at 80 years when you were previously a jackpot winner.
- Give money to charities
One of the most fulfilling actions is giving. As a lottery winner, you also need to give out the money to charities such as mental illness organizations, Cancer research, doctors without borders, human Society Organizations among others. You may also create your won foundation so you know exactly where the money is going to.
- Invest your winnings
Although saving your winnings will protect them after sometime they are likely to get depleted. If you invest your winnings wisely, you’ll allow them to grow and earn you more than your initial investment. Some investments can even provide you with a livable income and enable you to live off your winnings well. One of the best places to invest in is mutual stocks. Apart from the mutual stocks, you may also choose to invest in your own stocks.
- Buy assets
Apart from investing you may also decide to use your winnings to purchase assets. Buying assets can be a good way to protect your winnings over time. Since assets such as land will appreciate in value over time you will ultimately increase you total wealth.
- Consider donating some money
If you are willing and able you should to consider donating part of your winnings to a worthy cause. This is one of the best ways to ensure that your winnings work for the good of others. With some donations and charities, you may also enjoy tax relief.
Summary
Winning 55 million in lottery can actually be like a dream come true since in almost 200 million people only one person usually emerges as the winner. Although the odds are quite rare, the truth is some people actually win the lottery but do not have an idea what to do after their winnings. If you’ve won 55 million in the lottery, you need to consider the above tips. By carefully thinking about them you’ll know what to do with your 55 million cash.
