24/7 Wall St. has tracked many lottery winnings over the years, and we have come up with a self-help guide of 12 Things Not to Do If You Win the Lottery. Again, it’s just too easy to go broke. The newly wealthy and those who have had wealth for a while need to keep one adage in mind: You should only have to become rich once!
The pitfalls for lottery winners are many, and they go above and
beyond deciding whether to take the lump-sum cash payment or take a
payout. Most people who win the lottery choose the lump-sum payment
rather than getting annual checks.
So what happens if you actually win the lottery? The first thing to remember is that you may be filthy rich, but this comes with the price of extreme responsibility. You now have to consider how this can affect your family and your relationships. Will you work, or will you just live the easy life of luxury for the rest of your days?
A few things have to take place immediately. Winners need to sign the winning lottery ticket and report it to the state. Before bragging to everyone you know, you might want to reconsider. You better go line up a solid financial advisor, and you better get some serious tax advice. Life is about to change drastically, but there are always limits. Thinking that you can live without a budget is a major pitfall. Before thinking that you need to be responsible after becoming filthy rich overnight, ask yourself this: If it is so easy after winning the lottery, then why do some people still go broke?
Some pitfalls will be very hard to avoid. Your family and friends may be asking for money all the time. You do not have to be their personal ATM, nor do you need bankroll all their extravagances. And you better avoid the trap of buying everything you ever wanted.
There are a lot of things to consider on the financial management side. Again, responsibility — and suitability. Ask yourself if you know about alternative investment vehicles outside of stocks and bonds. Have you ever heard of kidnap and ransom insurance? Did you know that your life could now be in jeopardy?
Many lottery winners are not sure how to spend and save, nor how to properly donate. Do you back all your friends and family business ideas? Do you buy everything for everyone, or give extravagant Gatsby parties? These are just some of the things that a lottery winner will have to consider.
The 1980s film “Brewster’s Millions” made it seem hard to blow $30 million in 30 days. Now you could do that in days or hours without even being that creative. The costs of owning and keeping up private jets or mega-yachts, living on a private island and keeping your own entourage add up quick. Mega-mansions, luxury cars, extravagant parties, private concerts, buying luxury goods or art and collectibles — these all sound great, until you factor in the ongoing costs for a lifetime of it. Any combination of those could go over $100 million, again without even being that creative.
24/7 Wall St. does not want to see any lottery winner go broke. Here are the 12 things not to do for any lucky lottery winner. Again, you should only need to get rich once!
So what happens if you actually win the lottery? The first thing to remember is that you may be filthy rich, but this comes with the price of extreme responsibility. You now have to consider how this can affect your family and your relationships. Will you work, or will you just live the easy life of luxury for the rest of your days?
A few things have to take place immediately. Winners need to sign the winning lottery ticket and report it to the state. Before bragging to everyone you know, you might want to reconsider. You better go line up a solid financial advisor, and you better get some serious tax advice. Life is about to change drastically, but there are always limits. Thinking that you can live without a budget is a major pitfall. Before thinking that you need to be responsible after becoming filthy rich overnight, ask yourself this: If it is so easy after winning the lottery, then why do some people still go broke?
Some pitfalls will be very hard to avoid. Your family and friends may be asking for money all the time. You do not have to be their personal ATM, nor do you need bankroll all their extravagances. And you better avoid the trap of buying everything you ever wanted.
There are a lot of things to consider on the financial management side. Again, responsibility — and suitability. Ask yourself if you know about alternative investment vehicles outside of stocks and bonds. Have you ever heard of kidnap and ransom insurance? Did you know that your life could now be in jeopardy?
Many lottery winners are not sure how to spend and save, nor how to properly donate. Do you back all your friends and family business ideas? Do you buy everything for everyone, or give extravagant Gatsby parties? These are just some of the things that a lottery winner will have to consider.
The 1980s film “Brewster’s Millions” made it seem hard to blow $30 million in 30 days. Now you could do that in days or hours without even being that creative. The costs of owning and keeping up private jets or mega-yachts, living on a private island and keeping your own entourage add up quick. Mega-mansions, luxury cars, extravagant parties, private concerts, buying luxury goods or art and collectibles — these all sound great, until you factor in the ongoing costs for a lifetime of it. Any combination of those could go over $100 million, again without even being that creative.
24/7 Wall St. does not want to see any lottery winner go broke. Here are the 12 things not to do for any lucky lottery winner. Again, you should only need to get rich once!
Do not forget to sign a ticket or report it to the state.
After doing some research, we found out that not signing a ticket or failing to report on time are the simplest and easiest error to make. Can you imagine losing a lottery ticket? Or imagine if you wait too long to surface.
Then imagine what can happen if someone else snags your ticket and
shows up to collect the prize. Fighting over this is no simple task and
disputes have arisen over who owns what ticket. In a way, lottery
tickets are almost considered the last form of bearer bonds that anyone
may collect on if they show up with the coupons and bonds.
Do not run out and tell everyone you know.
If you win millions of dollars, chances are pretty high that you will to want to brag about it and share some of your new joy. How could you not? The problem is that telling everyone you know before you collect your winning puts you in danger, and in more ways that just one. Everyone who has ever done anything for you now may come with their hands out asking for something, or worse.
You may have heard of kidnap and ransom insurance before. One recent lottery winner even became the victim of murder. If you can manage it, and if your state allows it, try to remain anonymous for as long as humanly possible. How you became vastly wealthy will be found out in time anyway, but there is no need to hurry that along.
Don’t just take the cash option without consideration.
Supposedly somewhere close to 70% of lottery winners end up broke again. Many of them end up broke within a couple or few years. Let’s say that you can choose to get a sum of more than $100 million up front, or you can choose to receive a payout slowly over the course of a lifetime. Most people choose the lump sum rather than the annuity payment. After all, it is instant empire-making money.
Go see a reputable and visible tax professional and a reputable investment advisor at a top money management firm with a widely recognized company name and a long corporate history. This theme of “reputable and visible” will echo throughout. Do this before you automatically make the decision about a lump-sum or annuity option.
Do not think that you are suddenly the smartest person to manage your money and finances.
If you go from living paycheck to paycheck, does it sound right that you will know the best things to invest in and the best tax and asset protection strategies? There are many ways to invest and protect that fortune, and that might not include just buying some stocks and bonds and letting it ride.
Your drinking buddy might also not be the best choice as an advisor and expert. Having a solid and respectable team of advisors and managers in place will act as your buffer that protects your assets now and in the future.
Hear this! Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated? Here is a hint – If you answered yes, you probably did not bother playing the lottery.
After doing some research, we found out that not signing a ticket or failing to report on time are the simplest and easiest error to make. Can you imagine losing a lottery ticket? Or imagine if you wait too long to surface.
Do not run out and tell everyone you know.
If you win millions of dollars, chances are pretty high that you will to want to brag about it and share some of your new joy. How could you not? The problem is that telling everyone you know before you collect your winning puts you in danger, and in more ways that just one. Everyone who has ever done anything for you now may come with their hands out asking for something, or worse.
You may have heard of kidnap and ransom insurance before. One recent lottery winner even became the victim of murder. If you can manage it, and if your state allows it, try to remain anonymous for as long as humanly possible. How you became vastly wealthy will be found out in time anyway, but there is no need to hurry that along.
Don’t just take the cash option without consideration.Supposedly somewhere close to 70% of lottery winners end up broke again. Many of them end up broke within a couple or few years. Let’s say that you can choose to get a sum of more than $100 million up front, or you can choose to receive a payout slowly over the course of a lifetime. Most people choose the lump sum rather than the annuity payment. After all, it is instant empire-making money.
Go see a reputable and visible tax professional and a reputable investment advisor at a top money management firm with a widely recognized company name and a long corporate history. This theme of “reputable and visible” will echo throughout. Do this before you automatically make the decision about a lump-sum or annuity option.
Do not think that you are suddenly the smartest person to manage your money and finances.
If you go from living paycheck to paycheck, does it sound right that you will know the best things to invest in and the best tax and asset protection strategies? There are many ways to invest and protect that fortune, and that might not include just buying some stocks and bonds and letting it ride.
Your drinking buddy might also not be the best choice as an advisor and expert. Having a solid and respectable team of advisors and managers in place will act as your buffer that protects your assets now and in the future.
Hear this! Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated? Here is a hint – If you answered yes, you probably did not bother playing the lottery.
Do not allow your old debts to remain in place.
If you get the bug in your head of “I’m rich and don’t have to pay anymore” you are dooming yourself. One lottery winner in California was reportedly strapped with debt from property purchases. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future and distant future, then something is seriously wrong. For that matter, you should not have a single debt ever again.
If you manage to go broke down the road and still have a mortgage,
car payments, student loans, credit card debt and personal bills, all of
your friends and family members should get to spank or ridicule you
every day for the rest of your life.
Don’t become the generous high-roller, living the big life.
If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars (or more) per week, what do you think happens to your expectations in life ahead? Chances are high that you will want more of the same.
If you start gambling in Las Vegas and are not happy until you are gambling with hundreds of thousands of dollars (or more) per play, you are dooming yourself. Wait until the real con men find you. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast. Having an entourage generally only works for people who keep making more money.
Don’t run out and buy everything for everyone, nor even for yourself.
Do not go out and buy dozens of cars, followed by houses and whatever else, for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department.
If you start buying everything for everyone, chances are high that they might expect that to last forever. The other end of the story is that you do not have to be a cheapskate either. Still, after hearing a real life personal story of one lucky winner buying more than 30 cars and multiple houses in three months it is just crazy.
Absolutely do not say to hell with a budget.
Maybe it sounds crazy that you have to live within means when you get empire-making money. After all, you are now wealthier than everyone you know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money. Chances are very high that you will make some serious purchases and your lifestyle will be changed forever.
Without setting limits for yourself and for what you do with others is a recipe for disaster. Again, many lottery winners go broke. If they went broke in a very short period, what do you think the reflection about wishing for a proper budget would be?
If you get the bug in your head of “I’m rich and don’t have to pay anymore” you are dooming yourself. One lottery winner in California was reportedly strapped with debt from property purchases. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future and distant future, then something is seriously wrong. For that matter, you should not have a single debt ever again.
Don’t become the generous high-roller, living the big life.
If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars (or more) per week, what do you think happens to your expectations in life ahead? Chances are high that you will want more of the same.
If you start gambling in Las Vegas and are not happy until you are gambling with hundreds of thousands of dollars (or more) per play, you are dooming yourself. Wait until the real con men find you. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast. Having an entourage generally only works for people who keep making more money.
Don’t run out and buy everything for everyone, nor even for yourself.Do not go out and buy dozens of cars, followed by houses and whatever else, for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department.
If you start buying everything for everyone, chances are high that they might expect that to last forever. The other end of the story is that you do not have to be a cheapskate either. Still, after hearing a real life personal story of one lucky winner buying more than 30 cars and multiple houses in three months it is just crazy.
Absolutely do not say to hell with a budget.
Maybe it sounds crazy that you have to live within means when you get empire-making money. After all, you are now wealthier than everyone you know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money. Chances are very high that you will make some serious purchases and your lifestyle will be changed forever.
Without setting limits for yourself and for what you do with others is a recipe for disaster. Again, many lottery winners go broke. If they went broke in a very short period, what do you think the reflection about wishing for a proper budget would be?
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