What is the First Thing You Do When You Win the Lottery?
Even though the chances of winning the lottery are 1 in 292 million there are a few lucky people that manage to get the winning numbers and claim life-changing amounts of money.
So, winning billions from the lottery means that you don’t have to worry about money ever again, right?
Wrong. A Study shows that most people that have won a lot of money through gambling have made the same mistake of suddenly changing their lifestyle, and spending more money than they should which will eventually lead to bankruptcy.
We all think that winning the lottery or a crypto jackpot can have a huge positive impact on our lives, but most people forget how important is to manage their finances and pay attention to the details that might come back to haunt them in the future.
Let’s go through some of the things you need to do after winning the lottery.
Things to Consider After Winning a Lottery
Even though this might sound selfish, the amount of drama that will circle around you as soon as people find out your identity can negatively impact your life.
Ever since people will find out that you are suddenly wealthy, you’ll be bombarded with requests for handouts from everyone from charities, to a long list of relatives and friends.
So, before you reveal your identity, check the state rules whether or not you can avoid identifying yourself publicly and remain anonymous. For example, last month a man in China went to pick up the lottery prize dressed in a silly cartoon costume. The reason? To avoid being recognized by friends and family.
This doesn’t mean that you shouldn’t help out your close friends and family, but staying private will help you tune down the drama.
See a Tax Professional Before You Cash Your Ticket
Most people rush to cash in the billions they’ve won through the lottery without worrying about taxes. There are different methods by which you can get your money and it all depends on the lottery format and government rules.
For example, some lottery winnings can be collected at once or having it paid out in 30 installments over 29 years. Getting a lump sum payment requires you to pay the taxes on the entire amount, and splitting the payment into multiple sections means that you’ll have to pay the taxes on the money you receive annually.
This is why it is important to schedule an appointment with a tax consultant and browse through all the options just to see which one works best for you.
Avoid Changing Your Lifestyle Suddenly
It is very hard to have billions in your bank account and live the same lifestyle as before, but it is really important. The best way to approach this is to let your head cool down from all the excitement and leave the money in your bank for six months.
You should avoid making sudden decisions right after winning the lottery such as quitting your job, buying a multi-million-dollar home, or traveling the world.
The best way is to save the big purchases for later and work on your financial plan at the moment.
Pay Off Your Debts
Even though a debt that can be managed properly is not a bad thing, paying off all your debts will help you sleep well at night. The high-interest rates on your loan mean that you’ll be charged more and more as time goes by, especially if you miss out on any payments.
So, remember to pay off your debts first before you think of buying a supercar.
Get a Team of Legal and Financial Advisers
Being wealthy means that you’ll need to deal with many people in order to stay on top of your finances.
So, with all that money to spare, your best choice is to assemble a team of professionals that will guide you through the process, find the best ways to keep your money and earn interest, and possibly advise you where to invest your money.
When you have a lot of money you can make more serious mistakes with your finances, which is why it is really important to hire professionals that will take care of your financial situation.