Okay, we know the chances are slim, but the thing to remember is that it’s not impossible to win the lottery. And sure, you may think you would know exactly what you would do with all of that cash, but, believe it or not, this isn’t something they teach you in school. So before you go blowing your money on, we don’t know, a water park in your backyard, check out these things you should do before that.
First things first, opt to stay anonymous if your state allows that. As you can probably imagine, when people find out you’re suddenly very wealthy, you are everybody’s best friend, and you know what everybody could use a little more of? Money.
Next stop: a tax professional. When you win the lottery, you have the choice of getting your cash-ola in a large lump sum or installments. There are pros and cons to each, but when it comes to taxes, if you opt for a large lump sum you will pay a tax on the entire amount, and if you opt for installments, each one will be taxed. You have (60) days after your win to decide which payment option better suits you.
Pay. Off. Your. Debts. Mortgage, car, credit cards, pay it all off so that it’s gone forever.
You’ll want to secure a team of legal and financial advisers. A financial adviser is super beneficial to you because they can guide you on how to spend your money, when to save it, and how to invest. As for an attorney, it’s good to have one on hand in case anyone tries to file a suit or make a claim against you.
If you come into a large amount of money you’ll eventually want to start investing, after you’ve paid off your debt, of course. Unless you know a ton about investing, this is where that financial adviser will come into play because they can walk you through what kind of investments are best. It’s also important to keep in mind you should never (ever) fall for an investment that you don’t understand or one that sounds too good to be true.
An emergency fund is a must-have, this way, should something go horribly awry in your world, you don’t have to worry about money. Sure, it may be an inconvenience, but it won’t be life-altering.
Another issue you’ll want to bring up with your financial adviser, retirement. First, you’ll calculate just how much you need to set aside to live life in your later years comfortably which means taking into account medical bills, the number of family members you want, inflation, etc. (Hey, we aren’t financial advisers.)
Last, but certainly not least, be charitable. Find an organization that you’re passionate about and pay it forward; not only will you be supporting an important cause, but there are some major tax break benefits.