Everyone aspires to win the lottery. However, what do you do if your dreams come true?
Statistics show that 70 percent of all lottery winners go broke sometime soon after. Squandering millions isn’t a straightforward task. However, when you don’t have a plan to manage your winnings, you’re likely going to blow through it quicker than you expected.
Winning such a lucrative prize can be a life-changing experience. You’ll often notice things alter around you for better or worse. The reality is that with an influx of wealth comes great responsibility. If you aren’t in a position to manage your wealth appropriately, you’ll have a challenging time dealing with things. Hence, you need to develop a formidable foundation to be able to manage your lottery jackpot appropriately.
What to Do After You Win the Lottery?
Once you win the lottery, it’ll seem like life has flipped upside-down. Hence, you’ll need a well-crafted plan to ensure you don’t end up like most lottery winners – broke. Here are some tips to help you navigate this situation:
Protect Yourself Before You Claim Your Prize
Protecting yourself before you claim your prize is paramount. You’ll learn that several issues arise when you’ve won the lottery. You’ll be receiving significant attention that could make you a target for some people. You’ll need to ensure your safety by following particular steps. For starters, you’ll want to safeguard your lottery ticket. After all, if you lose your lottery ticket, you’ll be unable to prove you’re the rightful winner. Likewise, we recommend refraining from claiming your prize immediately. Media attention is usually at its peak immediately after the results have been announced. Consider taking a week or two before you claim your prize. We would also counsel you to continue at your job. Most people think about quitting their job since they’re financially set. However, doing so can attract unwanted attention as it signifies changing fortunes. Therefore, continue showing up to work like everything’s normal.
Hire Professionals
You’ll want to hire lawyers and accountants to assist you with your winnings. After all, you’ll have to face the tax implications of winning the lottery. Moreover, you’ll want to discuss whether you should take a lump-sum payment or collect your winnings in an annuity. You’ll have to sit down with your team of professionals to determine the best route forward.
Pay Off Debts
Coming across a sizable sum of money can be a life-changing experience for most people. Therefore, consider yourself fortunate and be sensible with your spending. It can be tempting to consider buying your dream car or your ideal house once you have your winnings. However, it’s time to pump the brakes. You’ll want to start by being financially prudent, meaning paying off your debts should be your priority.
However, there’s one exception to this rule. If you’ve got a house with a mortgage on it, you’ll want to continue paying the mortgage. Since your net worth will have substantially increased following your lottery win, the government will place you in a higher tax bracket. Therefore, itemizing your tax deductions could prove beneficial.
Start Investing
Think about it this way: you can invest your money to ensure you’ve got a respectable stream of income pouring in, or you can splurge on fancy cars, luxury watches, etc.
Now that you’ve won the lottery, you’ve got the chance to elevate your life. However, your goal should be deferred gratification instead of instant satisfaction. Consult with your hired professionals and invest wisely. We recommend diversifying your investments to hedge your bets to minimize risk.
Managing Your Money
Managing your fortune can be a challenging endeavor. Fortunately, we’ve partnered with Tuner Little, a wealth management firm, to help lottery winners. If you’ve recently acquired a sizable sum, Tuner Little can assist you with managing it appropriately so that you’ve got a passive income stream pouring in annually. Check it out here.
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