Winning the lottery is unlikely, but if it happens to you, it’s probably one of the most exciting things that will happen during your life.
Unfortunately, many people who win the lottery go from rags to riches, and right back again. This is because they either have no idea how to handle so much money and blow through it all, or they think that their winning are enough to live a glamorous lifestyle for the rest of their lives. Very often, they’ll quit their jobs, buy new homes and cars and give money to family and friends.
Winning the lottery is exciting, but it can also be scary. Winning the money and blowing through it can be worse than not winning in the first place, especially if your expenses land you in debt.
If you’ve won the lottery and want to know how to stay rich, read on!
Change Your Contact Details
Before you know it, you could have cousins you’ve never met, and friends you haven’t spoken to in years knocking at your door. It is advisable to not show off if you’ve won the lottery, but if it’s too late for that, ensure that you won’t be taken advantage of by friends or family. If they weren’t there before you won, they shouldn’t be in your life now.
Get Advice Before Deciding on the Lump Sum
You will usually be given the option between deciding to take a lump sum of money, or yearly payment. Keep in mind that choosing the lump sum will mean less money due to taxes. Unless you have a very clear idea of what you want to spend the money on (investments, paying back debts etc), it is usually better to choose annual payments. This is extremely helpful in insuring that you don’t overspend.
Settle Your Taxes
Not settling your taxes after winning the lottery can lead to major headaches later on. Contact an accountant and ensure that your taxes are settled.
Pay Off Your Debts
Ever heard of stories of celebrities being in debt for millions and thinking, “How is that possible? That amount could last me my entire life!”. Well, letting debts build up is one way. Ensure that you pay all debts as soon as possible.
Be Patient and Sensible
Unless you win hundreds of millions, you probably won’t be flying in private jets and drinking expensive champagne for the rest of your life. Even then, you could end up spending all of it or ending up in debt. Consult a financial expert for advice on how to get the best interest on your winnings.
Don’t Quit Your Job
If there is any time for you to follow your dreams, it’s now. If there’s a subject you never studied or a passion you never followed, you now have the financial freedom to pursue it. But don’t just quit and laze your days away – You never know what can happen! Trying to explain a five year gap in employment to a future employer because “you won the lotto” won’t be a fun experience.
You got lucky once, don’t push it. There is not much to be said for gambling with your winnings, it is by far the worst thing you could do.
Prepare for Change
There could be major changes in the way friends and family act towards you, some resenting your new wealth and some trying to get in on a piece. Prepare for the changes in your lifestyle and career too.