All of us at one time or another have daydreamed about what we would do if we won a casino or lottery jackpot. These thoughts usually revolve around what you may buy, paying off a home, or buying that sports car you’ve always wanted. But if you miss important first steps, you might find that there is less available when go to spend that money or it has disappeared in a few short years. We contacted the folks over at Wildz Casino to get their input on what to expect when winning a jackpot and some suggestions on how to manage a large payday.
What should I expect from the casino when I win a jackpot?
You should expect some delays as the casino does their due diligence. The larger the win, the more the casino must do to ensure that the winner’s account and identity are valid. Expect identity checks to confirm your identity before any money is released. Further, the largest jackpots nowadays are “network jackpots.” These jackpots are paid out by the game developer as opposed to an individual casino, so winning a network jackpot might take a bit longer to process as the game developer inspects the win.
With respect to how you will get your money, this is all dependent on where you won it. Most of the network jackpot games pay in a lump sum right away, but some casino jackpots may pay in instalments. Each game’s details, or the casino’s terms and conditions, will outline how the jackpot payment process will unfold.
What should the individual do if they win a jackpot?
It depends on how much as “jackpot” can be a relative term. In the case where we are talking about a jackpot in the millions, the first thing you should do in consult a financial advisor. If you don’t know an advisor that you can trust, consult two or more to make sure that you are getting honest advice. The money spent on a financial advisor will pale in comparison to the costs associated with making poor financial decisions on your own. The financial advisor can assist you on how to invest, can help you comply with any applicable tax regulations, and provides general advice on how to make sure you still have this money, or even grow it larger, many years from now.
The next important step is really about what not to do: do not go telling everyone you know that you have just won a jackpot. In fact, you should keep knowledge of it as minimal as possible. A common complaint from large winners is that their family and friends constantly approach them with crazy investment opportunities, and requests for money and business investment. The people who cannot say “no” generally find themselves separated from their money rather quickly. The best strategy is to simply not tell anyone, but of course, this is easier said than done. Naturally, there are winners who want to lean on family or friends that might be able to help them manage this money. We don’t advise against seeking help from those you know, but just be aware of the dynamic that may exist when a large chunk of money gets introduced into a family or circle of friends.
What should I spend my money on?
This is really the most difficult question to answer as every individual’s priorities are somewhat different. What we can do is offer up some advice on how to make your jackpot win provide you the longest possible financial health.
Pay off your home
If you own a home, pay it off. Your mortgage is just paying interest to the bank. You should call your bank right away and request the payoff amount on your current mortgage. The home, for most people, is their most expensive asset. Paying your mortgage off immediately will go a long way towards providing long-term financial health.
Don’t own a home? Buy one that is within your means. A home, especially one paid for is cash, is generally a solid investment. There’s so sense in paying rent, especially in the long-term, when you’ve got the means to buy a home outright. Just be sure to purchase something that you can manage. Large homes can have tens of thousands in annual expenses just to maintain them and pay property taxes, so make sure you don’t get in over your head when buying property.
Pay off credit card debt
You see the trend here. You should be looking to pay off any major bill, especially those that are accruing interest. It doesn’t make any sense to carry $10,000 in credit card debt if you have millions in the bank. Pay that off without hesitation. Keep one or two credit cards for convenience purposes, but cut up the rest. You don’t need credit like you once did. Cash is king and you have plenty of it now.
This is different for every person. If you’ve always wanted to visit New Zealand or Japan, do both at once. If you want to have the nicest garden in the neighbourhood, rent a truck and go to the garden shop. If you want to send your favourite niece on a nice honeymoon, you should do that.
If you’ve gone through the smart steps of consulting a financial advisor, paid off your major debts and future expenses, then you should feel free to splurge a little bit. Just know when you are spending too much. For some, that might be only spending investment income while someone who wins millions at 65 years old might feel inclined to spend more and enjoy it while they can. This is all dependent on your situation. If you are 25 years old and you win a million, that will feel like money that may last a lifetime, but a million can go quick as evidenced by the fact that most lottery winners end up going broke.
One size does not fit all
The core first steps, hiring a financial advisor and paying off major debt, are universal. But how one spends their money is dependent on many factors – pre-win financial situation, age, jackpot amount, etc. Fortunately, consulting early with a financial advisor will help prepare you for what comes next.