So, you finally got your golden ticket wielding the winning numbers to your lottery winnings, and are heading towards the state lottery board to pick up your check while wondering what to do if you win the lottery.. The only question that looms in your thoughts as you imagine futuristic scenarios is this: what options are available to me? 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 or blow it at a casino; below we have composed some meaningful uses to give you a clue what to do if you win the lottery and have no direction in which to spend your money.
Choosing Lump Sums Or Payments
This is the first quandary to get out of the way as most people choose the wrong path and cost themselves tax issues which are hard to fix. 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. The taxes are much more egregious than your flexible loans could ever be! 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.
Since you really want a new Jaguar or Porsche and are dying to get to the dealership, you may as well 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; simply put around 67% of what you just won (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 in any casual conversation before you even purchase the ticket.
As I’m sure you’re aware of the crime rates after lottery winnings 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
It would definitely be a great idea to 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. Once your vacation is done, you can deal with hassles in a more calm, organized and level-headed manner.
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. If you wish to know more and want a more comprehensive guide on strategies and tips on what to do if you win the lottery, we’d love to oblige your wishes.