What To Do If You Win The Lottery
Isn’t the thought of having to worry about what to do if you win the lottery an amazing one? For me it is, and it inspires me to keep trying to win! The question that looms in your thoughts as you imagine winning is this: what should I do with all that money? Well, before your pockets begin burning with cash and you get the itch to spend your money, there are many bad things you can do if you win the lottery, such as buy illegal things, blow it at a casino or get scammed out of it. Below we have compiled the most important things to consider, so you don’t have to wonder what to do if you win the lottery.
Choosing Lump Sums Or Payments | What To Do If You Win The Lottery
Deciding what to do if you win the lottery is ultimately you’re choice, however one thing is universally written in stone; that’s how to take the payout. This is the first and most important choice to get out of the way as most people choose the wrong path and cost themselves tax issues (not to mention millions in lost interest). When deciding on whether to take lump sums or yearly payments, consider this: $60k-$100k extra a year sure sounds nice, but the tax implications – added to your current income – would be astronomical as it would send you into a new tax bracket. Plus you have to realize this figure does not keep up with inflation! Even if you didn’t work, you’d end up paying taxes as an income. The best advice is to take that lump sum payment and run as far and fast out the front door as you can. Since this is still going to be more money than you had already, you may as well pay the taxes up front which, yes, are about 33%; did you have $10,000,000 when you walked in there to pick up your check? If you did, I doubt the lottery would be played at all by you. Eat the taxes and take your share home and avoid long-term payments that can come with heavier taxes and less enjoyment because the tax man would love to tell you what to do if you won the lottery.
Investments | What To Do If You Win The Lottery
I know you really want to go cash out on a new Jaguar or Porsche and are dying to get to the dealership, but stop off at Charles Schwab or Merrill Lynch first and get a huge chunk of money invested non-aggressively in an income-bearing Roth or something similar.
- Do not let an investor take your money and aggressive play with stocks.
- Put in around 67% (personally, I would shoot closer to 80%) into something that pays a monthly tax-free income.
- CD’s and retirement accounts tend to be the best bet for people with loads of cash.
- Talk to your potential broker and make sure to mention you do not want aggressive investments but rather something that will yield incremental income on a monthly or quarterly basis.
- Never let an investment firm tell you what to do if you win the lottery.
- Never take the money out. Live off the interest for the rest of your life and you will never have to worry about money again!
Personal Living | What To Do If You Win The Lottery
As I’m sure you’re aware of the crime rates after winning the lottery climbs through the ceiling, you should probably live a normal life for the time being. Keep enough in your personal savings to supplement a year’s pay while you are waiting for interest on your investments to kick in. Keep enough in your personal checking to live comfortably for a year as well, having the required funds to pay bills and eat. Of course, you can keep some out for the intricacies of life, yet splurging to the point it’s obvious is never a great idea. Never purchase exotic vehicles or mansions as this will leave you open for robberies; keep your significant other from begging for 4 carat rings as well unless you plan on deploying a personal body guard for her. It may even be a great idea to un-list your personal information from websites, phone directories, and any place else that has easy to find contact information as you don’t need to be pestered all day about loans, investments from friends, etc. Believe me, there are plenty of people who’d love to dictate what to do if you win the lottery.
Take That Vacation | What To Do If You Win The Lottery
Board up the house and head off to Hawaii or someplace secluded for a few weeks so you can get your head clear and relax. Many people within the first few weeks will come forward and claim to know you, claim you’re indebted to them, or make some other outlandish claim against you; ducking these frivolous acts is done best by simply taking the family – or yourself – on a much needed and well-deserved vacation somewhere secluded. Take the vacation time to handle your long term planning, how you are going to plan with these problems which will come up and what dream your about to live! Once your vacation is done, you can deal with hassles in a more calm, organized and level-headed manner.
Conclusion | What To Do If You Win The Lottery
No one can truly tell you what to do if you win the lottery as this is something you need to decide amongst yourself. However, you would definitely benefit from taking this advice as you can find many horror stories online of how people won the lottery and had terrible things happen to them due to greed. At the end of the day, before writing out a detailed financial plan, you first need to actually win the lottery! Click here for a more comprehensive guide on that before you figure out what to do if you win the lottery.