Every year people around the world become overnight millionaires. Think about that for a moment. Lotteries go on all the time, and it is not uncommon for lotteries to reach hundreds of millions. Then, just like that, someone has the right numbers, and their lives are changed forever! If you are a lottery player, you have probably thought about the lifestyle a lottery win will afford you. But, don’t stop there. Think a bit deeper. Once you win the lottery, you want to ensure you always have money. That means money has to come in to replace money going out. Read on for some more professional ideas to help you manage your newly found wealth.
Firstly, seek financial advice from the professionals
Get professional help. You are talking about a lot of money, your future, and the future of your family. This is not something your next-door neighbour or your buddy with a “great idea” should advise you on. You may decide to throw some money around. You might want to give your buddy a try. But first, you need to secure the majority of your money into something secure. This is why you need a pro. We suggest hiring a financial adviser, a tax professional, and an accountant. You may find someone who can hold more than one position.
According to experts in the field, here are the first few things you should do when you have hit the lottery:
Do the work
Look up the companies you are considering doing business with. Do this yourself, do not hire someone to do it for you. How long have they been in business? What are the pros and cons of the investment required? Do they have complaints filed against them from past clients? After you have researched the company and the investment opportunity, discuss it with your financial advisor.
Pay off all your debts
When you come into money, your debts may seem small. Companies will bend over backwards to do business with you. Everyone wants some of your winnings. But be smart. Pay off everything you owe. This clears up your assets and improves your credit score. Simply, having no debt and significant cash gives you more investment opportunities and power.
Determine your goals
What do you want to accomplish? Do you dream of world travel? Do you want to live in a penthouse in London? Is your dream to live in the country and raise alpacas? Before you can plan investments to give you the financial backing to afford you the lifestyle you want, you have to determine your lifestyle. Then you can create goals to make that lifestyle your reality.
Wait, wait, then wait
Farnoosh Torabi is just one of several experts who advise going really slow especially if you are considering investing some of your newfound fortunes. The world of finance and investing is new to you. Even professionals can win or lose a fortune investing. Do the research, talk to people who know the industry. Think about the risk. Are you willing to walk away if things go bad? This is one of those situations where everything may turn out fantastic or everything may fail. Can you handle it either way? Farnoosh also suggests keeping the news private and not telling anyone for a while. This way you can gather your own thoughts about how you want to use the money and not be bombarded with ideas from family and friends and ultimately their own personal ideas.
Don’t hurt yourself
Some people have too much heart. They just want to give to every cause and gifts to every person. This is where you need your tax pro. Many winners have gone through their jackpots in record time, dividing it among family and friends. They do not check the tax laws in their area first. In some places, there are gift taxes. So that 10 million you gave the “best friend ever” may not seem to be such a good idea when the taxman comes knocking on your door. Also, be careful not to become the family ATM machine. Lottery winners sometimes lose sight of the fact that small withdrawals add up over time. With multiple hands in your pocket, it is easy to lose track of how much money is going out. You may consider not letting people know about your big win.
Pay yourself a salary (annuity)
If you choose to take the cash payout on your lottery prize, Don’t give yourself full access to it all at once. Deposit it and invest it. Determine how much you want to spend and pay yourself a salary. This way, you can balance your outflow with interest and incoming money. It gives you a clear picture of your finances and keeps you from blowing huge amounts of cash spontaneously.
Winning the lottery opens a world of opportunity for you. You want to make the most of this gift. Use your money wisely and you’ll be financially secure for the rest of your life.
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