What you do if you found out that you won the lottery? Would you call everyone that you know and share the news? Would you hold a press conference so that the whole world would know that you won? Many lottery winners have done just that and unfortunately this has been to their detriment. Everybody dreams of winning the lottery and now there is even a television show called “How the Lottery Changed My Life.” What people don’t talk about is how to win the lottery and make the money last forever. You probably think that I’m going to give a step by step instructional article on what to do if you win the lottery. Instead I think it’s better to discuss what not to do.
- Don’t tell anyone you’ve won. Until you decide what you are going to do and how you are going to handle this windfall, keep it to yourself. The moment that everyone knows that you’ve won your life will never be the same.
- Don’t claim the money yourself. If you are in one of the states that allow you to remain anonymous, you should. If you are from other states, have a trust set up and let the trust claim the money on your behalf.
- Don’t continue to live in the same house. If the word is out about you winnings; your home could become a very dangerous place. Pack up your things, take your family, and get out of there for a while. You can then clear your head and figure out if you need to move away permanently. There have been some scary situations involving lottery winner and people wanting in on the action.
- Don’t spoil your kids. Kids need to know what it’s like to work for the things that are important to them. This keeps them humble and appreciative of what they have. If you give them everything they may end up spoiled and lazy.
- Don’t invest in things you don’t understand. Many lottery winners have lost their fortunes investing in real estate, stocks, business ventures and other investments that they didn’t understand. Do your homework before you hand over your money to anyone claiming to be able to make you a fortune. As the saying goes “If it sounds too good to be true, it probably is.”
- Don’t overspend. Sometimes due to the economic background of the lottery winner that spend money uncontrollably. After buying 15 cars and 3 houses you could find yourself back where you started or worse.
- Don’t hire any Financial Advisor, Lawyer or Accountant that calls you. Although there are many great professionals in all of these areas. You need to know who you are dealing with. Many of the ones that call on you may not be looking out for your best interest but their interest instead. You need to find your own team to support you and get you moving in the right direction.
- Don’t take the lump sum. This one is controversial because many people want all of their money upfront. The lump sum is great if you know how to handle your money but if not this is a bad idea. With the annual payments, if you spend the entire installment and make financial mistakes you get to start over next year. Hopefully, you will have learned from the first year and get better as the time goes by or get some financial assistance to manage your money. Once the lump sum is gone it’s gone. Take some time and carefully think this one through.
Although, the lottery can be a great shot in the arm for a family that is in need, be careful. It can quickly turn into an albatross if not handled properly. And remember, to whom much is given much is expected. Dream big and play responsibly.