The idea of winning the lottery or some huge jackpot in a casino is one that many people dream of. Falling into a life-changing amount of money seems like your chance to live a life of luxury and never have to work again.
The thing is, not everyone who wins the lottery handles their earnings particularly well. In fact, many people end up ruining their lives only a few years after winning, becoming broke and finding themselves back at square one.
We’re going to talk about what to do when you win the lottery, hopefully helping you to set yourself up for a lifetime of financial freedom.
What to Do When You Win the Lottery
If you have the great fortune of matching your numbers when you’re looking at the lottery results, the first thing you have to do is sign your ticket.
Signing your lottery ticket solidifies the fact that it is yours. If you’re walking down the street and the ticket blows out of your hand, someone could easily pick it up and claim the winnings if you hadn’t yet signed it.
It would be pretty hard to come back from a blunder like that. So, in the midst of the great excitement of winning the lottery, be sure that sign the back of your ticket and put it somewhere safe. Most states require you to return the ticket and claim the prize within 3 months to a year of the numbers getting listed.
Upon cashing in your ticket, consider the following tips to make your life a little smoother on your sudden jump into fortune.
1. Stay as Anonymous as Possible
Naturally, everyone in your immediate circle will know whether you tell them or not. Your financial situation will be starkly different in the blink of an eye, and you’ll likely spread the love to your friends and family in one way or another.
That said, try to make it known that you don’t want everyone you have ever known to know that you now have an incredible sum of money. You’ll start to be on the shortlist for anyone who needs money in any situation.
It isn’t as though everyone will take advantage of you, and it’s important to use your new position for good when you can, but know that some people will be naturally inclined to orbit you with selfish intentions.
Some states require that lottery winners list their names publicly. If your state allows you to remain anonymous, though, we highly recommend that you do so.
If you release your name to the public, you’ll receive calls from charities, “business experts,” people you are barely acquainted with, and more.
2. Consult with a Financial Advisor Immediately
It’s important that you consult with a financial advisor before you even cash the ticket. You’ll be given options on how your money is distributed, and those options will have significant effects on how you’re taxed and when you get the money.
For example, you have the option of getting the money in installments over long periods of time. This would effectively set you up with a high yearly income for the next 30 years instead of receiving 100 million dollars all at once.
Additionally, you’ll be in a new tax bracket and have to deal with all of the loopholes of the new financial realm you’ll be in. There are a lot of opportunities to make missteps or misunderstand the documents, and with so much money riding on the result, you could lose a lot of money in the process.
You should also have someone to help you understand what will happen to your estate if you should pass away before it’s all distributed, and much more.
3. Ease into Lifestyle Changes
It’s entirely natural to spend a chunk of your winnings to celebrate. Going on a family vacation for a month or renting out a mansion to celebrate in is totally understandable.
You might also want to get all of the things you need and have been saving for. Don’t go out and change your life drastically right away, though.
For example, it might be unwise to buy a luxurious mansion in cash without putting any thought into the long-term financial reality of it. Similarly, buying expensive cars and blowing large sums of money like they’re nothing is unwise as well.
Those large purchases are investments that will come back to bite you when your (once-massive) winnings dwindle. It’s important to remember that most people who are financially successful without winning the lottery get that way because they make calculated financial decisions and utilize their foresight.
Instead of thinking about your fortune as a fixed amount of money to spend and enjoy, consider using that wealth as a way to solidify you and your family with smart investments.
If you intelligently invest parts of your winnings and make savvy financial decisions with the help of an advisor, your jackpot winnings could set your family up with financial freedom and comfort for generations to come.
Now, would you rather make sure your great-grandchildren are taken care of or buy three Lamborghinis?
4. Uplift Your Community
Newfound wealth could be your opportunity to benefit your community with collaboration and investments that improve the quality of life in your town.
It may be a good idea to consult with community leaders and discuss potential ways that you could donate to them or work with them to finance projects that could benefit all of the people in your life.
When we horde and spend all of our money on ourselves, we find that it is a particularly lonely way to live. Giving back to the community is an excellent way to establish connections to the people in your life instead of separating from them.
Additionally, donating provides a great number of tax benefits.
Interested in Digging Deeper?
Knowing what to do when you win the lottery is important if you want to use your good fortune to improve your life and the lives of others around you.
If you want to learn about finances, earnings, winnings, and more explore our site for the information you need.