Many people dream of one day winning the lottery, but few ever think about what they would truly do if a large windfall of money actually came their way. Do you know what you would do if you won over $300 million in a lottery?
Some suggest investing everything into stocks, bonds, or trust funds with the help of a financial advisor. Other lottery winners have chosen to help others in foreign countries such as China, India or Columbia. Even more choose to travel the world as tourists. A large part of winning the lottery unfortunately is the accompanied fame. With that fame, many lottery winners find that they are often asked for support by nonprofit organizations, individuals such as friends, family, or even strangers, and last but not least, politicians. Some have even chosen to support a presidential candidate during the upcoming election that shared their views on politics and the war. Perhaps the most flamboyant use of lottery money has been seen by one winner who chose to carry his winnings around in suitcases and then spent it frivolously. This cost him dearly, in both his health and his fortune. Unfortunately, with little to no prior money management planning for such a premium change in finances, many lottery winners find problems instead of paradise. With this handy guide, you can be adequately prepared for how to handle yourself and your money if you one day draw a winning lottery ticket.
In the month of August 2007, more Powerball tickets were purchased than countless months before. This growing interest proved to be profitable for one Ohio resident who hit the jackpot winnings. David Coterel, a resident of Riverside, Ohio won the $314,300,000 Powerball lottery. This incredible drawing was named the fourth largest in the history of the Powerball Together he and his children Lynn Hiles and David Coterel, Jr., all planned to retire from their current jobs and pursue their dreams. What one does not see in the press releases and feature spots on the Wednesday evening news however, is what happens to the family after the big win, and how exactly they go about adjusting to life as overnight millionaires.
As ironic as it might seem, many find that their windfall into financial bliss brings with it a great deal of distress, and frustration. Below are the ten steps you should take, if you ever come upon a lottery win such as the one that David Coterel and his children secured on August 25th.
1) When you hear that you have a winning lottery ticket, the first thing you must do is find a way to protect your ticket. Place the ticket in a plastic zip-top baggie to protect it from spills or from any environmental grime. Put your ticket in a safe place such as a safe or lock box. You might even consider taking it with you to the bank, and opening a safe deposit box until you can take it to the lottery commission.
2) Tell no one but your closest friends and family. Limit your news radius to five people, though 3 would be ideal. Choose people that you know you can trust to keep a secret, and who you are confident are not greedy or manipulative.
3) Meet with a lawyer. He or she can inform you of current laws regarding lotteries, and will advise you on how to go about claiming your ticket legally and without difficulty.
4) Rent a hotel room, with cash, under an assumed name. This may seem extreme, but one of the biggest problems facing lottery winners today is the press. Congruently, people who feel that they were entitled to win that lottery can become angry and lash out at the winner. To protect yourself and your funds,
5) Confirm the ticket with the lottery commission.
6) Meet with an accountant. When you are certain that you have your winning ticket, and have confirmed this with the lottery commission.
7) Go on a one-month vacation. By doing this after your big win, you will avoid the majority of instant press and public attention. You would also have a chance to adjust to the idea of your new fortune before spending money on big-ticket items. This allows yourself the opportunity to think through your purchases before spending thousands of dollars on an impulse buy.
8) Calculate your interest. When you meet with an accountant and/or financial advisor, ask him or her to help you calculate the interest that can be generated from various investment options. Rather than spending large amounts of money with no concern for limits, consider living off of your interest by budgeting your “disposable income” according to how much you earn in interest each year. You can even ask your accountant to figure this out on a daily basis so that you know how much you can spend each day without taking a penny from your principal.
9) Don’t feel pressured. Remember that the stream of financial requests headed your way by friends, family, and strangers need to follow the same courtesy and respect that would have existed before your financial windfall. Many people view lottery winners as people with endless amounts of money. While the pool may be deeper, it does have an end, and you will find it much sooner if you answer every request with an emphatic yes. Find people and organizations you believe in, and truly want to help, and only focus on those requests.
10) Pamper yourself. Give yourself the chance to go a little crazy (with a budget in mind). Take 2% of your winnings with you on vacation, and use an additional 13% when you get back to get settled, and shop until you drop. By allowing yourself to splurge on some extravagance in the beginning, you are also taking away some of the temptation to do so on a continual basis, outside of your basic budget.
Previous lottery winners have found successful ways to spend their money that have enriched their lives and the lives of their loved ones.
One former security guard from Albuquerque, New Mexico was one of 14 to take claim to the $131 million jackpot win. After indulging his passions for fancy cars and a nice home in the mountains, Mark Madrid focused on preparing for his future, and helping his parents secure a comfortable retirement. With the help of a financial advisor, he set up a trust fund for his mother and father that allowed them to quit their jobs, and to begin to enjoy having more time in life to do what it was that they wanted to do. He kept more than 50% of his winnings in a bank account, and lives off of a strict budget that will secure his future unquestioningly.
Patricia Denardo, a former nurse in Pennsylvania won the $10 million Publisher’s Clearing House jackpot. Rather than spending it quickly and frivolously, Patricia added on to her existing home to make it into a house that she felt she could retire in, she put her children through college, and took a voyage around the world. She too, has set up her future to ensure her financial security through wise investments and savings.
By looking at those who have won before us, we can learn what to do, and what not to do. If you look down at the tiny slip of paper in your hand and find winning lottery numbers one day, you will now have the tools to avoid many of the pitfalls of lottery winners who have come before you and fallen. Success goes much farther than access to money alone. It is in the managing of the money that fortunes for a lifetime are truly made.
