Imagine that you are the lucky winner of the lottery (such as a grand prize). How will you handle that huge amount? What you will do? After the initial excitement, make sure you face a range of problems, even risks. Here are 9 things you shouldn’t do. A 53-year-old woman from Massachusetts, Mavis Wanchot, quit her job after winning a Powerball lottery with a record $758.7 million. According to the financial adviser, she made some bad decisions.
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Table of Contents
Do not rush to receive the bonus
After learning that he was the winner of the Powerball lottery, Wanczyk immediately contacted the award and called the Mercy medical center where this person worked to resign. However, financial advisers say so too early. “It’s best not to do anything. Let the overwhelming feeling pass before making any decisions,” said financial planner John Loyd in Fort Worth (Texas).
Matt Chancey, a planner in Orlando (Florida), said that you should consider waiting a while and then accept the award, to the attention of the media to calm down. Also, please photocopy the ticket and store it in the safe. Normally, you have a certain amount of time (30 – 180 days) to receive the award so please use this time to be better prepared both financially and psychologically for this special event, John Ulin, a financial planner in Boca Raton advises.
Do not tell many people
The lottery winner will attract a lot of attention, from the media, relatives and even scammers. If allowed, ask for anonymity when accepting the award, experts said. “Don’t tell anyone”, noted financial planner Leon LaBrecque in Troy (Michigan).
Amy Hubble, a financial planner in Oklahoma City, thinks that you should talk to a lawyer for assistance in opening a fund or find an appropriate fund manager to receive the award discreetly.
Do not think this will solve a problem in your life
“Winning the lottery cannot change who you are”, warns Sandra Hayes, a former social worker who won the Powerball award in 2006. You are still the same person with the same problems, just having more money. Many winners have fallen, and eventually, have more problems than before. “I wish I had torn the ticket even further”, said Jack Whittaker, a 2002 Powerball winner, who said afterward.
Do not turn yourself into an amateur banker
There seems to be no way to spend all that money in a short amount of time, but then you will meet people who are inviting investors, asking for charity and even those in difficult circumstances. Help, Burke Sestok, a financial planner in White Plains (New York), said. “Change your mobile number. If necessary, change your residence”, added Timothy Neuville, a financial planner in Irvine (California).
Relatives and friends will start attacking you. Even the “distant relatives” that you hardly know. “If you really have to lend to someone you know well, ask them to write a pledge” even though most of these loans will never get them back, Kenneth Waltzer, a Los Angeles financial planner Angeles, said.
Do not rush to get cash immediately
Instead of accepting a lump of money, the smarter choice is to receive each part within 30 years. According to financial theory, you can take money to invest, but getting all the money at once will bring much trouble and danger.
“Learning how to handle such a large sum of money takes time, “said Joyce Streithorst, a planner in Melville (New York). “If you choose the gradual option, you will always have huge income in three decades, but also significantly reduce the risk of spending all your money at once”, Sestok added.
Do not handle yourself
Everything from taxes to real estate planning is complex and risky. “You will need a lawyer, accountant, and financial planner,” said Mark Beaver, a planner in Dublin, Ohio. Do not hire your friends, comrades, or friends. Hire a reputable independent expert, with appropriate qualifications and experience.
Do not become “Riche” because there is no comprehensive financial plan
“A plan will help you not become one of the big winners but end up losing,” Beaver said. Although the money is so much that you’ll never seem to be able to spend it, make a budget to specify when and how you will spend it.
Do not try to become an investment genius
Think carefully before investing in anything complicated, “monopoly” or you don’t understand, like venture capital funds. Now that you have a lot of money, you don’t need to rush. The billionaire investor Warren Buffett also always advises people to invest in low-priced funds.
Do not spend money wastefully
Don’t rush to buy a new home or a supercar. At first, just allow yourself to spend a moderate amount, then do not touch the pile of money or change your lifestyle in the first 6 months. “Let you get used to the new reality”, said Richard Gotterer, a planner in Miami.
It is true to say that even if you have a lot of money, don’t throw your own money
Remember, people, learn how to spend money very quickly. This may not make you happier, but it can quickly drain your fortune.
It is hard to imagine what you would buy first if you won the lottery. Earning huge sums of money can open up a new world, with a wide range of spending options overwhelmed.
