Winning the lottery is something that many people dream of but do not expect to ever happen within their lifetime. When it does happen, it can seem overwhelming and exciting at the same time. However, many steps should be taken if you wish to stay rich after winning the lottery.
Maintaining your wealth after you win the lottery can be challenging, especially if you're tempted to buy everything on your wish list. A person who is unaccustomed to having wealth may not know how to handle it and end up broke in a short period. You can remain wealthy after winning the lottery by hiring professionals, investing, and putting money back for emergencies.
Knowing what to do with your lottery winnings will depend on a few factors including the type of payout you choose if you have created a plan and whether you have hired someone to help you. Keep reading to learn more about staying rich after winning the lottery.
What Would It Mean to Win the Lottery?
To many people winning the lottery would mean a windfall that they never thought they would have and the opportunity to change their life. Many times this means being able to finally pay off their debts, buy the house they have always dreamed of, invest for the future, and take care of their family.
For others it means that they have the means to live the high life of traveling, quitting their jobs, and purchasing anything they have ever wanted. It could mean being able to buy flashy cars, houses, jewelry, and so much more.
While both ways are completely personal preferences, one will leave you dead broke within a few years and the other will allow you the ability to have something left over for a long time. Whichever angle you choose, you should ensure that you have taken the time to think about it before you start spending your winnings.
What Steps Should You Take Before Claiming Your Winnings?
Finding out that you have won any kind of money in the lottery can be exciting and a bit overwhelming. This is especially true if you have won a large prize worth several millions of dollars.
Most financial advisors recommend that you pause before you claim your winnings and start your shopping spree. This is because there are some important things that you should line up and take time to think about before you collect your winnings.
- Put your ticket in a safe place while you take time to think
- Do not advertise your winnings
- Hang onto your job for a bit
- Consult with professionals like tax attorneys, financial planners, etc…
- Get off social media
- Consider changing your phone number and email address
Is Taking the Lump Sum or Annuity Payments Better?
Both of these choices are subject to personal preferences depending on what your goals and plans are for the money. There are many things to consider such as tax implications and how much money you will end up with by either choice.
For example, when you take the lump sum, you do not get the entire prize amount that was originally advertised. This is because it is assumed that winners will take the annuity and so the winner will only receive the current cash value of the winnings.
Receiving the annuity payments means that you will eventually receive the full jackpot amount minus any federal and state taxes that may apply. This does mean that you will not have access to your entire winnings all at once, but you will pretty much set up for life without the risk of overspending in the beginning.
What Steps Should You Take After Claiming Your Winnings To Ensure You Stay Rich?
Hopefully, by the time you have claimed your winnings you have taken the time to think about how you want to be paid out and have a plan in place for your money. Once you have claimed your lottery winnings you can now take action on the plans you made.
Here are a few steps that you should take if you want to stay rich after winning the lottery:
- Set up meetings with the professionals you hired to ensure that everything is set up properly.
- Work with those professionals to pay off any outstanding debts.
- Fund your retirement account (or as much as possible if taking the annuity)
- Make smart investments with the help of a professional
- Set up college funds for children
- Give to charity (if you choose)
- Learn to say no to those who come calling
3 Things You Can Do To Make Sure Your Winnings Work For You
While the list above are smart ways to ensure you have a plan for your lottery winnings that will help you in the long run, there are other things you should consider as well. There are three things you can do to create those smart investments and continue to have money flowing in at all times.
Here are 3 suggestions for staying rich after winning the lottery:
- Purchase a business that will generate a consistent income. This could mean buying a franchise of something that is already established and has a good reputation. It could also mean opening a business that you know is a necessity and will be a steady source of income.
- Diversify your investments. By diversifying your investments, you are not putting all of your money in one place but instead putting it in various places. This means that you can have some of your money invested in high-risk investments, like Bitcoin, and others in low risk so that you are keeping better control over your money.
- Use some of your money to invest in income-producing property. This usually means investing in apartment buildings, retail spaces, parking lots, and more. If done correctly, could mean that you can bring in a passive income that will pay off for years to come.
Overall, winning the lottery can be an exciting thing to happen to many people. At the same time, you hear about horror stories of lottery winners who have won big and then end up in bigger debt within a few years. If you want to stay rich after winning the lottery, you have to make some smart decisions and then follow through with them.