What To Do If You Win The Lottery
Imagine that you have just finished triple and quadruple checking your winning ticket, and pinching yourself once just to be sure. You have just won the lottery, which means that all of your troubles are now over forever.
The answer is maybe.
If you make a few smart decisions with your lottery winnings right away, then you will be spending the rest of your life on “Easy Street”. However, a few bad decisions could see you ending up right back where you started before you won the lottery, if not in an even worse position.
Here are the smart investment steps to take to ensure that you end up making the most of your winning lottery ticket.
Talk to a Tax Advisor Before Cashing In
One of the biggest issues that you will need to deal with is taxes, and making some smart tax decisions could mean saving as much as half of your winnings from the taxman.
The first person you should call after winning is a professional tax adviser who will provide you with the guidance on how and when to cash in your ticket to maximize the amount that you get to keep because when you win you have the choice of taking one large lump sum or having it paid out over a period of time like an annuity.
Pay Down Your Debts
The best way to start saving money is to stop wasting it on debt payments. Paying down all your debts is one of the easiest ways to save for your future because the rate of return is always large and it is guaranteed.
Start with the debt that has the highest rate of interest first, such as credit card debt and personal loans, and then work your way down to the low interest debt last, such as your mortgage. Not paying interest each month is the most efficient way to put your lottery winnings toward your own future.
Set a Budget
You are obviously going to want to indulge yourself and learn to enjoy life a little more now that you have won the lottery, but that does not mean that you can suddenly start flying around the world every weekend and feeding your cats filet mignon.
Decide how you want to realistically spend all your days, and then set aside the necessary amount of your lottery winnings to meet that lifestyle. It is always far too easy to spend money, and you may find that your indulgences are rapidly depleting your winnings in an unsustainable way.
The final step to making the most of your lottery winnings is to set up a smart investment plan for your remaining capital, so it is not just sitting in your bank account gaining interest. A good portfolio will have a mix of stocks, bonds, gold and real estate but if you don’t know how to set up a portfolio then you may want to reach out to a financial adviser.
You can even invest in yourself, your family and your friends by putting money into businesses that will grow. The key to smart investing is to know your goals and how you intend to get there, and then hold your wealth in a diversified portfolio of assets and sources of income so that your wealth will be able to weather any storm.
Winning the Lottery Is Great, Now Don’t Blow It
Winning the lottery is one of the greatest feelings in the world. I wouldn’t know for certain because I’ve never won, but I can only imagine!
Now all you need to do is make a few smart choices about how to manage your winnings going forward, and the rest of your life will truly be a dream. Too often do you hear about a person winning millions of dollars in the lottery only to find out a few years later they are filing bankruptcy. Don’t be one of those winners/losers!