The next Megamillions Jackpot is more than $250 million. If you happen to play, and if you’re really lucky, there’s a chance you might win it all. Let’s say you just realized you’re taking home the gold and you’re the only winner. Now what?
This article from bankrate.com via MSN Money will help you get into the proper mindset. Here’s the to-do list the authors suggest:
- Keep the ticket safe. You’re not turning the winning ticket in right away, but it’s your proof that you won. Hold on to it in a safe deposit box while you make the rest of your preparations.
- Think about your job. We just had this discussion in the office as I put my $1 into the pool. Most winners quit their jobs, even if a significant number say they won’t. But don’t jump the gun, and don’t make a scene.
- Find people you can trust. You’ll need a lawyer, accountant, and financial advisor. If you don’t have any currently, ask for referrals from friends.
- Decide on a lump sum or payments. When I was younger, I used to have this discussion with friends. In general, the thinking was that it was much better to take the payment option as the lump sum payout is significantly less than the sum of all the payments. But if you take the lump sum and are diligent about investing, you could end up with more in the end. In reality, most of the time the winners who choose the lump sum option are not diligent.
- Arrange for a special account at the bank. Although we’d love to get take an oversized cardboard check to the bank, your winnings are transferred by wire. You’ll need a special bank account to handle the deposits.
- Change your phone number. You never know how many relatives and long lost friends you have until you have come across a large sum of money. With a new unlisted number, you can be in control of those with the ability to contact you.
The article continues with more tips:
You’re about to become filthy rich, so splurge if you want to and arrive at lottery headquarters by limo, helicopter or elephant, if you are so inclined. But don’t take too much time. There’s always a deadline.
If you’re a person who is habitually late, watch out for this. Who wants to miss out on $250 million due to traffic or issues with the day-care?
The Tax Man cometh before you even get your money, immediately making you 28% poorer. And if you’re the kind of scoundrel who owes something called state-owned-debt, such as back taxes or child support, the lottery folks take that off the top as well.
That’s quite a bite for the government, but if you’re still coming out with $180 million after taxes, can you complain?
Finding a way to spend millions may seem insurmountable, but it’s really not that difficult. Many folks—lottery winners and insta-rock stars alike—have succeeded in finding solutions to this particular “problem.”
The article provides some tips for spending and saving large amounts of money responsibly.
You’ll probably want to help out your family and those who were friends before you were rich. You might be interested in leaving a legacy by helping your favorite cause in a major way… And you’ll probably want to have something at the end to leave to your heirs—‘cause then you get to play all kinds of mind games writing up your will different ways.
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1:28 pm (reply)
“Don’t jump the gun” (on quitting work).
I think I would at least wait until the money hit my account before I left.
1:43 pm (reply)
2:14 pm (reply)
FMF,
Not only is it a good idea to wait until the money’s in the bank, but it might be good to try to leave on best terms (that is, no “See you losers later.”). Who knows how quickly the money will be squandered and you’ll be back begging for a job. :-)
3:55 pm (reply)
It’s tragic that such a high percentage of folks squander all their money away. It’s a perfect example of why it is so critical to teach some level of money management in school. From all the articles I’ve read about lottery winners losing everything, it appears that they just didn’t know any better. My guess is that they didn’t even realize that they could create a reasonable income stream off the principal.
Hazzard
7:57 pm (reply)
That is something that always amazes me also…how can lottery winners blow through so much money? I have seen Dateline or 20/20 reports about how they often end up bankrupt and less happy than before they won the lottery.
I personally would stay at my job if I won. I may not work quite as hard, but I would stay.
2:25 am (reply)
6:46 am (reply)
2:27 pm (reply)
9:12 pm (reply)
You have to remember that most people that win aren’t necessarily the most financially aware people – if they were, they probably wouldn’t be playing the lottery in the first place.
8:38 am (reply)
I dream of how I would invest money won,and think I have a pretty good financial plan, but I was wondering,If you would take the payment option, and then die,,are the remaining payments,considered part of your estate,and go to your heirs,or is it lost?
2:09 am (reply)
I used to know a very friendly guy who pumped my gas.
One day he showed me an old newspaper clipping with a photo of himself headlined “5 Million Dollar Mike”.
He explained that he won $5,000,000 in the lottery a few years ago; had a big house and fast cars in California; then lost it all—because of his girlfriend.
He now holds two jobs pumping gas—one job to pay his bills and the other paycheck is used to buy more lottery tickets—because he KNOWS he can win it again.
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“Congratulations!” the king in Gary Hart’s BC comic strip says to the peasant.
“What are you going to do with your lottery winnings?”
“Well”, the peasant replies, “gambling has been pretty good to me!”