We’re picking up where we left off, with our advice on how to manage your new status of lottery winner and multimillionaire. Today we’ll discuss the do’s and don’ts regarding your professional and financial future.
What to avoid:
Spending your money impulsively
According to the National Endowment for Financial Education, about 70% of people who suddenly come into a large sum of money squanders it in a few years. Here are 2 examples not to follow. The first is Evelyn Adams, from New Jersey, who won 2 consecutive years (1985 and 1986) a total of $ 5.4 million in the lottery. On a whim, she took her millions with her to Atlantic City where she bet everything ... and lost everything. Next we have Vivian Nicholson who was a shopaholic. In 1961, she earned £152,319, the equivalent of $4 million today and spent it on haute couture clothing, luxury cars and trips around the world. By 2007, she was looking for a job ...
Quitting any professional activity
Yes, you are rich, and if you have won the jackpot, you probably don’t need to earn more money. At the same time, the best way to always have money is to always be working, no matter what the work is.
In 1978 a scientific study published in the Journal of Personality and Social Psychology, proved that a year after winning the lottery, a jackpot winner may not be happier than a tetraplegic. Simply put, big winners aren’t fully content with the pleasures that their big sums of money bring. Having a job makes you feel as if you have a purpose in life and that will in turn make you happier than the average winner. Better yet, make your job something fun and helpful and your karma might even bring you a second win.
You now have the means to do what you want. Maybe you’ve always dreamt of a career as a painter? Now you can get started or take classes with the greatest artists in the world! You can even take finance courses, this will be very useful for you to manage your newfound fortune. In 2007, when Cynthia Stafford won $112 million at Mega Millions, she created a film production house. Sheelah Ryan created a foundation after winning $ 88 million in 1988. Two winners and 2 dreams fulfilled. Voila.
Come up with a game plan in case you win.
“Prepare to win”, that's the advice Cynthia Stafford would give you. In an interview with Marie-Claire, the $112 million winner at Mega Millions explained that she always knew one day, she would win. $112 million, no more and no less. She also knew that she would invest in a film production house.
Today her dream is a reality and Queen Nefertari Productions produces niche films and continues to grow.
Surround yourself with wealth management professionals
You now have enough money to enjoy the finer things in life combined with the delight of peace of mind. All of this will last until your money runs out. Since prevention is better than cure, we strongly advise you to use the services of a wealth management professional. With their expert understanding of the financial sector, they will give you advice on what it means to now classify as a millionaire and how to manage investments as well as deal with any financial necessities that your country requires:
- Changing banks: Camelot, the organizer of several British lotteries, employs advisors for winners of large sums of money. They steer their customers to appropriate financial institutions by recommending banks that have a department dedicated to lottery winners.
- Choosing a payout: when winning the lottery you’ll be presented with 2 options; annuity and a lump sum payout. When choosing a lump sum payout, you’ll enjoy the pro of receiving all your winnings in one payment, with the con of being heavily taxed. However, when choosing the annuity payment option. You’ll enjoy the pro of yearly instalment payouts for the next 30 years until your full amount is paid out. This option has the added bonus of knowing that you won’t be spending your money frivolously.
- Pay off your debts.
- Pay your taxes: every country has their own tax requirements, be sure to consult your wealth management professional to ensure you’re compliant with local laws. Don’t be Messi about it.
- How to invest: some bank portfolios are not taxed and as a result this interest will allow you to live like a King or Queen. Investment opportunities are fully suited to your preferences, whether it’s mining or fashion, no matter the sector, there is money to be made.
- Prepare a budget: more money does not mean more shopping. Make sure you’re spending your money wisely, by setting limits and rules to your spending habits.
- Insure your goods: now that you have financial opportunity to buy goods of high value, make sure that they’re insured.
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