Walking through a dream scenario….
After trying for several years, your ship is finally anchored on the port as you bag the $1 million or maybe the multi-million lottery jackpot.
Your first reaction is complete bewilderment and the second, exhilaration!
You start checking your numbers not once but twice, thrice, and yes that’s your legit lottery win! It’s time to sip your favorite win and celebrate.
And soon, you will have to decide, how and what exactly you need to do with the winnings you just bagged.
After all, you don’t want to extinguish all that has come up to you and make rash decisions pertaining to anonymity, financial advisors, planning up the resources, and a gazillion other things before and after claiming the jackpot!
There have been stats floating in the air, that have suggested, that lottery winners are more likely to declare bankruptcy than non-winners and that winning the lottery and spending that money leaves the winners dissatisfied and eventually depressed. This is what can happen if you do not plan your winnings, and fall of the cliff financially after taking wrong post lottery winning decisions.
Don’t let this happen to you! Instead, take the following steps and learn not only how to protect your newfound wealth but also make it grow for long!
#1 Protect The Winning Ticket
The most important step! Before doing anything else, protect your winning ticket by signing the back of your ticket and authorizing it as your own! If you lose it, you can’t prove its authorization and will have to land back, from where it all started. The least you can do is make paper and digital copies of your ticket and keep them safe in a bank or home safe or in encrypted cloud storage.
#2 Don’t Rush To Claim The Prize
Don’t rush to claim your prize as soon as you have secured the lottery ticket. This is because if your prize is big enough to attract the media attention and if you decide on claiming it, just after the announcement, it definitely will create a buzz all around you. And if you take a little time of approximately a week or so, you have ample time to plan the winnings appropriately. The majority of lottery games offer a span of 180 to 365 days, to claim the winnings, but this doesn’t mean you will lose track of the time. Keep a sharp eye on the clock!
#3 Don’t Spread The News Or Quit Your Job
As exciting it may sound, winning millions and quitting your job even before claiming it is never a good idea. In fact, you should not spread the good news everywhere, but keep it to your immediate family only. Holding on this time smartly can turn out to be very beneficial in the long run. Perhaps, you are holding the wrong ticket or have checked the digits wrongly! So be mindful of all these aspects.
#4 Hire Financial Advisors
You are probably not a licensed accountant or an expert tax attorney. When you win a lottery and bag a whopping amount you need to get your hands on a tax attorney, estate planning attorney, family lawyer, financial advisor, and a certified public accountant, to minimize the tax liabilities, customized estate planning, take care of wills, trusts and prenuptial agreements. They are specialized in managing your wealth appropriately and guide you through a complicated annual tax process.
#5 Pay Off The Debts
Finish any type of loan, be it student loan, credit cards, auto loans, a second mortgage, personal loans — it really doesn’t matter. Not that you have bagged millions, there’s absolutely no reason that you can’t pay off your debts, prioritizing the debts with the highest interest. But if you have a home mortgage with a low rate of interest or you decide to upgrade to a house with a bigger mortgage, keep paying the installments. The wealthier you are, the higher is your income tax bracket, and the more you can save up by itemizing your tax deductions.
#6 Put Some For Retirement
Winning a huge sum comes with huge responsibilities. Allocate a part of your winnings to tax-advantaged retirement plans. Saving up something for your retirement will definitely benefit you in the future. In case, you have spent the remaining winnings unwisely at least you have something left to cater to your needs in old age.
#7 Get Insurance
If you don’t choose to remain anonymous, you can be targeted by unscrupulous organizations and individuals that may hound you with lawsuits with the only aim of grabbing some amount from your newfound wealth. This is why it is always a good idea to hire a team of financial attorneys to protect your assets and wealth from this kind of lawsuit.
Playing a lottery is much easier these days than it was before. But with changing times, how we manage this sudden windfall after winning matters the most. You can browse through various winning tools and techniques but the actual process starts after you have matched all the winning numbers in the correct order. It is very important that you safeguard and utilize your newfound wealth so that you do not fall from riches to rags.