Don’t we all dream of winning the lottery? Winning millions of cash and never having to work again? But, does winning the lottery means you’ll be rich forever? In some cases, it does but in some… It really doesn’t. 1/3 lottery winners go bankrupt. Why is that? It’s because of poor money management, winning millions of dollars without shedding some sweat can be considered as easy money. And easy money can be quickly squandered all over the place for trivial things. So, what can you do with your money after winning the lottery? That’s the question that’ll be answered with this guide.
Becoming a millionaire overnight is a responsibility. And if you think that spending millions in a couple of years is impossible, then you’ll quickly find out that you’re wrong once you’ve got the cash in your hands.
Don’t tell anyone
If you think it’s a good idea to go around telling people that you’ve won the lottery. Then you’re going to have a bad time. You’ll have to keep it for yourself and yourself only. Don’t tell the press, don’t tell your cousins, don’t tell your kids, and especially don’t tell your boss.
You can tell your partner if they’re trustworthy enough and can keep the secret. There are a lot of cases where lottery winners risked kidnapping, robbery and so many things just because they couldn’t keep their mouth shut.
So if you don’t want to risk your life or your money, it’s better to stay quiet.
Stay anonymous if your state allows it
In some states, lottery winners names are put on the public record. When this happens, suddenly all people want to be their friends. Their uncles need loans. Charities need money. Their families have a family project where their investment is needed, and the list is long.
Not only this but there a lot of managers and financial experts that live off of a scam. They’ll pretend to know best when all they care about is money and are driven by greed. So if your state permits it, stay anonymous to avoid all this.
If it’s not possible, then you can set up a trust or a limited liability company to handle and receive the prize for you. This way you’ll be able to guard your anonymity and keep your money.
Financial advisers and attorneys are your new best friends
The reason why 1/3 lottery winners go bankrupt is that they have bad habits and because they weren’t wise enough to hire a team of legal and financial advisers. When you’ve got a lot of money, a lot of people will try to befriend you to feed off of your money.
So that’s why you’ll have to pick a lawyer, a financial advisor, an accountant by yourself, and ask them to work together. This way you’ll be able to know if any one of them tries to make a bad decision that’ll hurt you.
Make sure to check their history, if they’re recommended by a lot of people and if they have any complaints. You can hire a private investigator to make sure they’re clean and that they’ll do your best to make sure you’ll handle your money right.
Talk with a tax pro
Before you cash the ticket, you’ll need to talk with a tax pro to help you decide. When cashing out your ticket you’ll find out that you have two options.
You either can take all the money at once which is called a lump sum payment or you can have it paid out in the form of an annuity for 29 years.
Each one has its advantages and disadvantages, for example for the lump sum you’ll immediately pay your taxes on the entire amount, and if you choose the annuity just remember that because of inflation money loses its value.
So most advisors recommend taking the lump sum and then with the right investment and financial advising you’ll have more than what you won originally.
Pay your debts
You can’t just go on in life if you’ve got debts. Whether it’s mortgage or credit card debt, the best way to invest in this case is getting rid of it.
There’s never a reason for you to stay in debt if you’ve got enough money to buy it. At least if you’ve got bad money habits and end up spending all of it you’ll at least be relieved that you’ve got rid of the debts you’ve had.
Don’t change your habits
If you want to avoid bankruptcy, then avoid changing your lifestyle. Don’t quit your job, don’t buy things you don’t need. Don’t buy any liability like luxury cars, or buying luxury clothes and handbags…etc.
You can celebrate your winning for once but then you’ll have to act as if you didn’t win the lottery. This is why getting financial advisors are important. They’ll be the one guiding you throughout this to make sure you handle your money wisely and don’t spend it on liabilities.
For now, you’ll have to live on a budget until you process the fact that you’ve won the lottery and got used to having millions in your bank account. That’s why it’s better to keep your old lifestyle and not spending vigorously until you plan something with your money.
Invest wisely
Before you start investing in properties or anything that requires a big sum of money. Make sure you start a short-term investment that doesn’t require a hefty amount. This way you’ll see if you can make the right decisions which generate back money or not.
Before you do any investment, make sure to do your researches and understand what you’re going to do and where you’re going in with your money. By doing this you’ll have higher chances of making the right decision and not losing your money.
You’ll have to diversify your investments to have different income streams; you invest in stocks, properties, projects and so on.
If you follow these steps one by one, then you’ll make sure to protect your money and generate other income that will help you protect this millionaire new lifestyle, if you don’t, then you’ll probably regret it since money is easy to spend.
