On Christmas night, 2002, a man named Jack Whittaker won the $314 million Powerball jackpot. At the time, it was the largest single prize in lotto history.
After squandering his fortune on strippers and gambling, he found himself at the receiving end of a lawsuit from a casino. He was bankrupt.
Even worse, his granddaughter died of a drug overdose two years after his win. Shortly after, her mother was murdered.
We all fantasize about winning the big prize, but if we’re foolish, a cash prize can be a curse.
That doesn’t mean you should hang up your hopes of winning. The grand prize can be a blessing—IF you know what do if you win the lottery.
Don’t be reckless with your money. Follow these tips instead.
Don’t Quit Your Job—Yet
When you find out you’ve won the big prize, you might want to make two phone calls: one to a travel agent to take a six-month vacation, then another to your boss to tell him where to stick it.
But just because you’ve won a fortune doesn’t mean you don’t need money in the short term. It might take several months to get your winnings into your hands.
In the meantime, you’ll still have bills to pay. Putting it all on a credit card to pay off when you get your money can cause runaway debt beyond your prize.
So hang tight—keep working at your day job for a bit.
Hire A Team
Most people have no idea what they would do with several million dollars. So when they win the lottery, they end up in a lot of trouble.
Put together a team of experts to help you manage it. Hire a lawyer, an accountant, and a financial adviser. They’ll make sure that you make the right decisions.
Nobody likes taxes. But the unfortunate truth is that it’s a part of life.
And when you win a huge prize in the lottery or on a game show, taxes are an even bigger nuisance.
We don’t want to think about how much we owe to the government. We just want to think about all the money we just won.
But if you forget about the taxes you owe, you could find yourself spending more than you’re actually receiving.
Luckily, if you hired a team of experts, they’ll make sure taxes are taken care of.
Don’t Take the Lump Sum
When you win the lottery, you can usually choose to receive your winnings in a lump sum or in annuities, or yearly payments.
As human beings, we like instant gratification. We don’t like to wait for things. Many winners choose to take the lump sum, even though they will receive less money over time.
If you choose to collect your winnings in annuities, not only will you receive more money, but you will be less likely to squander your fortune.
Make a Budget
“Budget” is not usually a word we associate with unfathomable wealth. Budgets are for when you don’t have a lot of money.
But a budget is just a plan to tell your money where to go. And if you have a lot of money, it’s even more important to make a plan for it.
Designate funds to savings accounts, investments, charities, and bills. A budget doesn’t mean you can’t spend money on big purchases either. You can add an item in your budget for “blow money” and treat yourself without ruining your finances.
Don’t Flaunt It
When you win the big prize, you’ll probably want to let everyone know.
It’s common for prize winners to buy flashy cars, fancy clothes, and drop huge chunks of cash so everyone knows how rich and important we are.
We want people to respect us, and we think that if everyone knows how much money we have, they will.
But if you’re loose-lipped about our winnings, you could find yourself at a never-ending stream of harassment. People ask you for money nonstop. You might even invite theft and crime.
However, the most successful millionaires in the world don’t flaunt their money. In fact, you might not even guess how wealthy these people might be!
As far as you’re able, keep your winnings a secret.
Set Up a Giving Plan
No matter how secretive you are about your winnings, someone will know about it. Friends and family and neighbors will call you at all hours asking for help—or a handout.
And yes, generosity is important. But that doesn’t mean you need to entertain each and every request for money.
Set up a giving plan with your financial advisor. You can make recurring donations to the charities of your choice, or direct individual requests to your advisor.
If your prize is particularly large, you can set up a non-profit to manage these donations for you, all while enjoying a lavish lifestyle
Knowing What To Do If You Win The Lottery
Too much of a good thing is a bad thing—and that can include money. But if you’re smart about what to do if you win the lottery, that prize money can be a huge blessing.
And not just for yourself, but for those around you too. You can use your lotto winnings to make your community a better place for years to come.
For many of us, this is just a pipedream. But if you want to try for a chance yourself, click here to get your registered KBC lottery number. You might just win!