It’s not every day that we get a lottery winner at Lottoland. In fact, there is a one in a 100 million chance for anyone to bag even a decent amount of winnings.
But even if one manages to win the lottery, be it be $100 million or even $10,000, there’s no telling how people will spend their newfound fortune.
The urge to spend on the very first thing that one’s heart desires is almost too overwhelming for one to think about how to properly handle their investment.
We don’t mean to discourage you from spending your winnings on whatever you like, whether it’s a new car, a new house, or a brand new television set: we only want to help you avoid the very same fate that befell the previous other lottery winners of the past.
Long story short, if you’re not wise with your spendings, you may end up going broke. So to prevent that from happening, we’ve put together this article to help you stay on the right path and ensure you’re in a better financial position than some of the other lottery winners. Here’s what you should do with your lottery winnings:
The first thing that you’ll need to do is figure out how to invest the money you want from your lottery. For that, you’ll need to contribute as much time towards research as you have to. We’ll discuss later on why you should remain quiet and not tell anyone about your winnings, not even your family members or close relatives.
Although you can contribute a small percentage of your savings to your close ones, if more people were to find out about your winnings, they may want more out of it, even distant or unknown relatives or family members that you didn’t even know you had.
Look up several articles online to see how you can store or stash all of your investment. And while you’re at it, make sure to learn about the possible tax implications and shelters so you have a better grasp of what you’ll be dealing with during tax time.
2. Get good assets
Rather than spending money on any materialistic possession that’s just going to wither away with time, why not invest your winnings on assets that will build equity over time or something that will retain its value in case you need access for emergencies at a later date? An example of this is a brand new car, which after some time, will quickly depreciate. On the other hand, a brand new house, will likely retain its value and build equity in it so you can use it in case of emergencies.
However, don’t make the same mistake as the previous lottery winners who went broke because they spent on depreciable assets. Even when buying a new house or property, you need to keep the hefty property taxes as well as the maintenance costs in mind.
Even luxury or specialty items, like artwork or collectibles, have considerable resale value, which makes them ideal investment choices these days and have maintained resources to discard in the future should the need ever arise.
3. Pay off your accumulated debts
One of the best parts about being a lottery winner at Lottoland is that you can finally pay off all the debts you’ve accumulated in the previous years.
This means that you can finally pay off your student loan debt, credit card debt, consumer debt, car loan, mortgage, or other financial responsibilities.
Get in touch with every one of your lenders and be sure to get the final or overall payoff balance. This is the amount that you have to pay to satisfy all of your debts.
Go through your list of creditors and pay every one of them. Keep doing this until there is no more money you owe to anyone.
4. Get help from professionals
While it may be risky to let those within your inner circle of contacts like family members and friends know about your winnings right away, there are a couple of people that you can share it with. We recommend getting in touch with a fee-only financial advisor.
This is someone who takes care of investments and the planning regarding them.
The reason why we suggest a fee-only advisor is because some advisors earn huge commissions by selling particular investment products. Fee-only advisors, on the other hand, only get a flat fee for the advice they give us and only act in our best interest.
Other professionals that you need to get in touch with include a CPA who will take care of your taxes, as well as a lawyer that can set up family trusts and get you away from scams. And while you’re hiring the professionals we told you about, you also need to make sure that these individuals have very open fee schedules indicating what exactly you should pay them.
5. Private equity
Being a lottery winner at Lottoland, especially when you have hundreds of millions of dollars in your possession, you have the ability to afford some of the liquid investments. When investing in private equity, there’s usually a 7-10-year commitment involved, but as history goes, the returns well exceed public markets.
You can secure the “illiquidity premium” that’s part of you tying your money up for a long duration. There are several strategies included in allocations, including traditional buyout funds, timber, venture capital, private debt, etc.