A lottery is a form of gambling that involves drawing numbers at random for a prize. Some governments have banned lotteries while others are still supporting to a point of running a national or state lottery. You will find some degree of regulation of the lottery by governments. The most common regulation is the ban on sale to minors. On the other hand, the vendors must be allowed to sell lottery tickets.
Lotteries have been common in the United States and some other countries by the 19th century. You might not have dreamed about winning a lottery, but when you win one, there are some tips and tricks that you can use to utilize it well. You might have seen people winning a million-dollar lottery but shortly, they go broke in no time. It happens when they don’t know how to manage their newfound wealth.
Tips for What To Do With Your Lottery Winnings
1. Protect Your Ticket
Before you do anything else after winning a lottery, take the necessary steps to protect the winning lottery ticket. If you somehow lose it, you can no longer prove that you are the rightful owner. Hence, you will come back to where you started.
At a minimum, make hard and soft copies of the ticket in different places with an encrypted cloud storage account or an external drive. Also, if you are not sure about these options, you can put it in a safe in-house or the bank safe.
2. Remain Anonymous
Once people get to know that you are suddenly rich, you will be hassled with requests for donations from all over the world. You will be getting requests for charities from NGOs to long-lost friends and relatives. Also, the financial experts will contact you to invest your money or they will be vying for your business.
To remain anonymous, you can check the rules of your state to know whether you can get around them by staying anonymous or not. Rules about the advertisement of the winners vary from one state to another. For example, in New York, the names of the winners are on public record. If you live in some other state, then it might be possible to remain anonymous by setting up a trust or limited liability company to receive the proceeds.
In Southern California, it is easy to remain anonymous after winning a lottery. Now it depends on the location from where you purchased the ticket. According to some lottery rules, there are 180 days or one year to claim the prize. Make sure that you manage everything timely, otherwise, you won nothing.
3. Don’t Rush To Claim Lottery Winning
As soon as you win the lottery, don’t rush to claim the lottery winnings. It is an essential tip because of two reasons. Firstly, if your prize is large enough to garner media attention, claiming your ticket within a week of the announcement might create more buzz than necessary. Secondly, waiting at least a week to claim the lottery winnings can give you plenty of time to plan for everything to come.
Giving a week or two might help you to manage the money and make more out of it. Some lottery winners take almost 6 to 12 months to claim their prize. But make sure that you have read the authority’s rules properly, otherwise, you will lose it.
4. Don’t Quit Your Job
As tempting as the prospect is, the time between when you realize you have a winning lottery ticket and when you show up to claim your prize is not a good time to quit your job. Also, try not to tell anyone other than your immediate family but other than your kids who will brag about the lottery winning. In the office, you should not be telling everyone but a few coworkers who are close to you.
The last thing you need is for your boss to start looking for your replacement, assuming he is already gone and will be gone for good soon. Either way, there is a little chance that you are wrong about winning a lottery. Maybe you misread the crucial number or the date is wrong.
5. Avoid Sudden Lifestyle Changes
After winning the lottery, for the first six months, don’t do anything drastic. It can be buying a home in Europe, quitting your job, creating a collection of Birkin bags, buying a fancy car, etc. In the meantime, set aside a fixed amount for the follies; it is natural to want to celebrate your windfall. You can save the big purchases for later. For example, you could rent a house in the neighborhood you plan to move to.
If you want to change the car, buy a cheap model and save the expensive and luxury model for later.
6. Pay Off All Your Debts
After winning a lottery, you should pay off your debts. There is no better investment than paying down debt. It can be a credit card debt or mortgage, or any other personal debt. The rate of return is equal to the investment rate on the loan. The abysmal returns on relatively safe investments like Bitcoin or any other cryptocurrency.
After paying off a dollar of debt, it is a dollar you no longer owe but when you invest a dollar, you might be making two dollars out of it and paying 1 dollar for your debt.
7. Hire Professionals
If you are not a tax lawyer, accountant, or family planning attorney, and you hit a lottery jackpot, then surround yourself with four types of professionals in no time. You should be looking for:
- A tax lawyer specializing in helping the clients with significant resources to minimize the tax liability without coming into conflict with the IRS.
- Family law or estate planning attorney specializing in customizing the estate planning documents such as prenuptial agreements, trusts, and wills. Also, you can order these documents online through Trust & Will.
- A financial advisor or financial planner with or without fees, who has sworn to act as a trustee will be working for your interest and not theirs. Also, they should be having experience in managing significant wealth.
- A certified public accountant who can help wealthy families to organize their finances. He/she should be able to walk you through the complicated annual tax preparation process.
If you are still not comfortable with any of the advice from the professionals, then you can get a second opinion from your friends or family.
Lottery Winning – Stay Calm
To win the lottery for beginners is more of celebration and excitement. But there are some tips and tricks that you want to follow after winning a lottery. Instead of showing off, you can keep it to yourself and stay calm. When you win a lottery, you might be having plans to invest the money and earn more from it. If you are not having a plan, then you can consult professionals to help you.
When you win a lottery, there are fair chances that you might get struck by lightning. It means that someone can steal the lottery ticket from you to claim the prize. Hence, you should protect the lottery ticket and remain anonymous for as long as the authority allows you. Otherwise, people will come asking for favors and request charities for different purposes.