Lottery Win Advice in 2023
Lottery Win Advice in 2023
You never thought it would happen. Not to you. After all, you don’t usually play the lottery. Or did you?
Well, dream on. Or don’t. Because, as it turns out, we found out exactly what you should do if you find yourself the recipient of a huge payout you didn’t earn. And it’s exactly none of those things on your list.
1. Stay Quiet
The day after you realize you’ve won the lottery, be smart and go to work. Continue on with your day as you would almost any other. Sign the ticket and make preliminary phone calls to claim your prize but don’t celebrate just yet.
You want to keep a low profile. Combined with the disorientation of sudden wealth, the addition of sudden fame can create a huge emotional strain.
2. Get Your Financial Team Together
Your financial team should at least consist of the aforementioned lawyer, an accountant, and a financial planner. Each individual needs to come from a different firm. You want these individuals to be invested in your best interests and not the interest of a single firm. With the amount of money involved with a Powerball jackpot, you would have the ability to choose from the best and most reputable law firms, investment banks, and accountants.
You want to put your team together early to help you decide on how to collect your winnings (and pay your taxes). For the lottery, you can choose to take a lump sum or collect an annuity over thirty years. Either way, you’ll have to pay taxes.
Interview many different types of advisors. If your current advisor doesn’t give you great service and advice it’s time for a change. Actually, whether you just won the lottery or not you shouldn’t ever have to put up with poor service. Good advisors can protect your fortune, prevent irreversible financial mistakes, and, generally, save you many headaches and possibly millions of dollars.
You’ll also need to consider the opportunity cost of not-taking the lump sum versus the risk of taking it all and blowing it. You know yourself best.
3. Consider taking the annuity payment
Lotteries do not actually pay the face value of the jackpot up front. Rather, they offer winners a choice of a reduced, lump sum payment, or an annuity in which the full jackpot value is paid over the course of the next 30 years.
If you don’t think that you’ll be able to resist spending all of the money at once, you may want to consider choosing the annuity option, which will force you to pace your spending, all while giving you access to the same total sum of money, adjusted for compounding and interest.
4. Get rid of debts
Paying off obligations is a good first step to take with any winnings, as this immediately stops you from losing money on interest payments. Besides, it’s a great feeling to be debt free, and getting rid of your debts is probably something that you would want to do sooner rather than later anyway. Remember the feeling of getting debt free is like, and make sure you don’t blow your lottery winnings and end up in debt again.
5. Avoid sudden lifestyle changes
Know yourself and assume that you will change somewhat as a new millionaire. Don’t underestimate family support and friendships. This may be a good time to stay close to that support group rather than escape to a new one.
Have a Plan for your Lottery Winning Ticket
Having an idea of what to do before you win or claim your prize will help you preserve your new wealth and, more importantly, your old self. The rollercoaster ride is inevitable, but this is one ride that would be easier on the heart and more enjoyable if you’re well prepared for it.
Financial Advisor For Lottery Winners
Are there costs associated with seeking advice from various professionals?
Most accountants, lawyers, financial planners, and portfolio managers would welcome a lottery winner with a free initial consultation. Costs thereafter will vary, and whomever you choose should be able to explain how they charge for their service.
Best Financial Advisors for Lottery Winners
Mintco Financial is an independent financial advisory group.
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