What to do when I win a lottery? What risks come after winning? How to get security and what to remember? These are the questions that you can not take lightly.
Powerball, Mega Millions, Eurojackpot or other national lotteries might make us multimillionaires fast. But the winnings are not just a great joy, they’re also a great responsibility. There are pitfalls along the way that are easy to run into. Instead of jumping right into the spending frenzy, it’s better to take several wise measures.
1. Remain anonymous
The temptation to share the news on winning with others might be very strong. After all, it’s just so wonderful to know! It’s just hard to keep it to yourself. The family, friends, acquaintances, neighbors, mailman – they all should know (plus they’re all invited to the after-party)! Not so fast, though. Lack of anonymity means lower safety level. There’s a reason why celebrities cover their faces and hang their heads low when walking down the street. You, as a brand newmillionaire, shouldn’t stand out either. Wait until you get secured. Those who are meant to know will find out in their own time. Not too fast.
2. Seek psychological supervision
Sounds weird? After all, you visit a psychologist when you have problems, not lottery winnings. And yet those who came into possession of fortunes very fast might have serious problems. Psychology refers to this as the sudden wealth syndrome. Lotterywinners tend to become depressed, apathetic, lose the meaning of life or quite the opposite – they descend into madness like Gollum in “Lord of the Rings”, who went mad over the precious ring. Huge money may bring happiness, but it may also take it away. Psychological supervision is a must.
3. Hire professional advisors
It might seem that money management is no big deal. I can manage my home budget so I will also manage millionsin lottery winnings. Well, you won’t. Having a fortune is significantly different from the classic model of “an account for ongoing transactions plus one saving account”. This is where we need a lawyer, accountant and qualified financial advisor. That’s like switching from managing a local sports team to managing a large international club. We can’t do it alone. There’s too much stress and too much risk of financial losses.
4. Pay your debts
Take it easy, as a newly made fortune owner you have plenty of time to travel and enjoy all those luxuries that used to be out of your reach. First pay all of your obligations. Mortgage, car loan, consumer credit, student loan, money borrowed from friends or even that digital camera you’re paying for in installments – pay it quick, right away. Get in the black again before you start your new life. Don’t jump into it until you take care of all the financial obligations.
5. Don’t quit your job just yet
How many years have you been waiting for the moment when you barge into your boss’s office and happily announce: I quit! Winning the lottery makes a great opportunity for that. Nothing is keeping you in the office anymore, after all. Remember, though, that plenty of things may happen. Your win might turn out to be a mistake – wait until you see the money on your bank account. Or something might happen along the way and one year from now you may have to get your job back after all. And then what? Your bridges are burned. You got a bad fame about you and now nobody wants to hire you. That’s why it’s better not to make rushed decisions, and quit your job with dignity and reason.
6. Watch out for leeches
Now that you are filthy rich, it might turn out you owe someone some amount, someone else borrowed you money the other day, and then there’s someonewho simply deserves it. Expect lawsuits even from your family members. It’s better to check your family tree to learn the potential claimants for shares in the winnings.
Better invest in a good lawyer right away, because as soon as you win the lottery you will find out there’s plenty of people who want something out of you and honestly believe they are entitled to it.
7. Only spend the profits
A shopping frenzy after hitting the jackpot might seem like a great idea. And the most obvious one, too. Finally you have money for all that neat stuff!
On one hand, it is true. On the other, our assets might vanish very fast if we get caught in a spending spree. That’s exactly how plenty of people end up in the red in a year or few after winning. Be wiser than that – start living off the residual income. If you let your millions work for themselves, the monthly profits will be enough to finance all those spendings anyway.
8. Don’t invest in something you don’t understand
Real estate? Safety deposits? Boring! Winning the lottery causes temptation to put the money in something unorthodox. Buying a whole cellar of old wines or investing in that great new financial instrument that is meant to generate record profits. The phone calls just keep coming, there’s always another interesting offer.
Be careful. It’s better not to invest in something you don’t know and don’t understand, because it’s easier to lose than to gain this way. During the first few months, go for the “boring” reliable options – apartments, properties or bank deposits.
