Winning the lottery is extremely good fortune. It’s the kind of fortune that even billionaires like Bill Gates would find incredible, let alone a man who bought a winning ticket on his way to buy tacos or a hotdog bun. A lottery win is a drastic change to your life, but for the better. It can be very overwhelming and you may not even know what steps to take after your win comes in, so we’ve put together a list of 6 important guidelines to take heed of after your win. Read further for the full story.
“A lottery win is a very hard thing to cope with if you’ve never really grown up around big sums of money like that, which most of us haven’t,” says Colleen O’Brien. Colleen is the vice president and branch manager for Charles Schwab.
To shed some more light on the subject of dealing with a lottery win efficiently, we asked her for her thoughts on a winner should do within the first year of winning to make sure that they don’t blow it all.
Tip #1: Don’t quit your day job.
This is probably one of the riskiest things to do for someone who’s just woken up to hundreds of millions of dollars richer. Don’t make knee-jerk decisions that can take you months to mull over under normal circumstances. Don’t think that the world works differently because you’re rich. The world works the same and you need to be aware that you always need a backup plan until you know your money is well-invested and safe.
So basically, it means keeping your job, at least for a while, and truly taking time to contemplate what this newfound wealth means to you and what you truly want to spend it on.
Tip#2: Don’t blab about it to everyone you know.
There was a story about a winner from South Carolina who chose to remain anonymous, and that was the wisest move he could have made, according to Colleen.
“What’s the first thing that happens? All the friends and family feel like it’s an open pool and the person who won feels an obligation to them,” she says. “I would try to get my ducks in a row, wrap my head around it. If you don’t tell anybody, it’s just you and your spouse who are dealing with it.”
There’s also another reason as to why Colleen recommends staying anonymous: Financial firms in your country will be beating on your front door to take your business. To them, you are the kind of cash cow that comes around once in a lifetime. They are so eager to milk you for all your lotto win is worth.
Tip #3: Hire a solid tax advisor
By choosing to stay anonymous, you have the power to quietly and methodically assemble a team of advisors who will definitely act only in your best interests. Your top priority after a win should be to find a solid tax advisor.
“Depending on your level of understanding, it can take at least a year to understand the different dynamics that go into taxation,” O’Brien says. “The tax planning process is so critical. You have to take that tax money and set it aside so it’s done and it’s out of the equation of your wealth.”
Another important factor to take into consideration is also to decide how you plan on taking your winnings as you may have to continue to count them as income for tax purposes.
Don’t do the rookie thing and start paging through Yellow Pages to find a CPA. First start by asking your circle of friends or acquaintances to see if they know someone they think can help you with managing your money well. Ask for a referral to their CPA and then take it from there.
Tip #4: Get your estate in order.
Depending on the size of your Jackpot win, the chances are you won’t plan on spending every dime of it in your lifetime. Finding an estate planner is a crucial step because they will help you figure out how to set aside money for family and friends correctly, but they will also help you manage charitable giving and other strategies to help you avoid taxation.
“I really believe...that when people have an estate planner they feel more secure about their wealth,” says O’Brien. “An attorney will help you draft your trust and other documents relating to how you want to pass your money on to loved ones at the time of your death.”
Having an estate plan in place means you already have a line of defence in case family members start to get pushy or make you feel guilty for not giving them how much they are asking for.
Tip #5: Start a budget with a financial planner
It may sound super boring, but keep in mind that even the extremely wealthy have just as much to gain from a budget as the rest of us do – especially if they have come into a large amount of wealth very quickly. So what does a financial planner do? They play the role of a coach, keeping you on track so that your cash doesn’t run out.
“If you want to retain your wealth, you have to have a certain kind of budget, “O’Brien says. “Ask yourself what are the things that are most important to you?...With a financial planner, then you figure out and scale it back to an element that allows you to have some of what you want but not everything you want in the first couple of years. Give yourself some time to get comfortable with the wealth. Then you can start to make bigger changes around your financial situation.”
Now, after reading that, it doesn’t mean letting your planner take the wheel completely. It would be foolish not to stay involved in the planning process and readjust your plan at least once a year.
Tip #6: Use your financial team as a defence against family and friends
One of the best things about assembling a team of financial experts is to help plan your management. You can blame them for everything when your friends and family drop by your house with their hands outstretched.
“If you put your professional team in place, they help guard you against manipulation a little bit,” says O’Brien. “I would start by saying, ‘I’ve got this money but it’s kind of restricted in how I can use it.’ If you lay it out there like that then that helps shift any of the manipulative behaviour that will be coming in.”
Basically, the bottom line is to give yourself some time to get used to your newfound wealth before you decide on spending it.
“In the first year, you’re going to have to settle in with what this is and not make a lot of decisions about spending it,” O’Brien says. “Make more decisions about taking care of your tax bill and planning for how you’re going to retain this wealth over time. Give investment a great deal of thought.”
So there you have it, folks. Straight from the horse’s mouth. Be extra careful with the steps you take after your online lotto win.
Take heed of this advice, and if you ever need any more, we are right here waiting for your questions on how to win big when you play lotto online.
Have a blissful Thursday!
We wish you the best of luck!
The PlayHugeLottos.com Team