How-To

How To Cope With Winning The Lottery

How To Cope With Winning The Lottery
By Brooke Keaton September 19, 2019
5 minute read

If you’re lucky enough to beat the terrible lottery odds and have found out you’re a winner you will find that the process can actually be highly stressful. So how do you cope with such a dramatic change?

We’ve put together this step-by-step guide to help any future lottery winners, which is broken into three parts: when you’ve just won, when you first get the money, and building a future.

PART ONE – Before You Claim Your Winnings

Firstly, we’ll look at the things to do – and not do – when you’ve just found out that you’ve won the lottery.

1. Try To Resist Telling Everyone

It might be really tempting to jump on Facebook or Twitter and start telling the world about your lottery win, but you need to stay focused and consider your options. Your life is about to change dramatically.

  • Keep the win to yourself for a couple of days, just to allow the enormity of the situation to sink in.
  • After a couple of days, tell your closest family and friends – the people who you trust with such a large secret.
  • Don’t tell other people until after the money has been claimed and you’re ready to deal with the change. You want to keep your privacy for as long as possible.

2. Sign Your Ticket & Read All The Instructions

  • Most importantly, sign your ticket and make a photocopy to avoid losing it. Whoever signs the ticket is legally allowed to claim the prize, so make sure you do this.
  • Carefully read all the information on your ticket and the lottery website incase there is any small print. There may be a specific time or date you need to collect the winnings by.
  • If the instructions say you need to phone the company, call them. If it says to contact them online, do that. Take care to follow the correct steps so you don’t make any errors with the claiming process that could prevent you getting your winnings.
  • The lottery representative you speak with will be able to advise you about the whole process, from claiming the money, through to any expectations they might have of you, including publicity. You should feel much less anxious once you’ve spoken to someone and understand the claiming process.

3. Hire Professional Help: Financial, Legal and Tax Advisors

It is absolutely vital that you hire professional help as soon as possible, well before you even start the process of claiming your prize.

  • Hire a financial and tax advisor. They will help you decide whether to take a lump-sum payment or annuity payments over a period of time.
  • Hire an attorney. They will help you deal with the legal aspects of winning the lottery.
  • Hiring help isn’t usually cheap, however most companies will be happy to wait until you’ve received your winnings before requesting payment. You don’t have to take their advice, but most winners decide that it’s the least stressful option.

PART TWO – When You First Receive the Money

What should you do in the days after the money lands in your bank account? We’ll let you know below.

1. Stay Anonymous

If you are allowed to remain anonymous, we recommend doing so.

  • Speak with your attorney to see if you are obliged to do any mandatory publicity jobs for the company running the lottery.
  • Ensure that all requests for publicity go through your attorney.
  • If you aren’t obliged to disclose your identity, think about whether you want to go public and the implications that could have. Standing with a giant check shows the world you have just come into a whole lot of money; you don’t want any unwanted attention from criminals.

2. Speak to Your Professional Advisors

There’s a big decision to make about your lottery prize: how you will receive your winnings?

  • As mentioned earlier, you will have the choice between getting the money in a number of instalments over the coming years, or in one lump sum.
  • Discuss this decision with both your financial, legal and tax advisors to help you manage your new-found wealth.
  • A lump sum of cash could encourage reckless spending. The value of money diminishes over time. There are pros and cons for both options, which your team will help you with.

3. Keep Your Job

For many, the first thing they plan on doing after getting their lottery money is stepping down from their job. But you should avoid making rash lifestyle changes overnight.

  • Resist the temptation to hand in your notice. A job provides structure to your day, and this structure will be important when it comes to coping with your wealth and fame.
  • Only once you have planned everything with your professional team and worked out everything financially should you consider doing this.
  • You might even decide to keep working indefinitely and never tell anyone about how rich you are.

PART THREE – Making The Most Out Of Your Money For A Happy Future

After a while, the attention on you will die down, however there will still be a few things you absolutely must do.

1. Pay Off Your Debts

  • Pay off your mortgage, car payments, credit cards, student loan, medical bills – whatever.
  • Once this is done, you know that they money you have left is yours to spend how you like.
  • Don’t forget that you also still need to pay your taxes. Your professional financial advisors can help with this.

2. Set Rules – And Stick to Them

One of the most stressful parts of winning the lottery is coping with the many requests you’ll get for money.

  • To avoid any issues surrounding friends and family, set rules. Tell yourself that you’ll only give to specific people, and that you’ll turn down anyone asking you for money. Be strong when dealing with people just coming out of the woodwork.
  • Avoid handing out loans. If you are going to spend money, give gifts instead. This avoids the hassle and bad feeling that can sometimes go with chasing people for loan repayments.
  • Keep a budget of how you want to live. Your money won’t last forever.

3. Invest & Protect Your Money

  • Consult your financial planners and get their advice on investments. They will guide you on how to spend your money to get the highest returns.
  • Don’t fall for investments that sound too good to be true. You will most likely lose out.
  • Anyone who is rich needs to protect their assets. The last thing you need is someone suing you (people will try!). Ask your team to organize asset protection strategies that will create barriers from people who want to take you down.

The most important thing is to try to enjoy yourself. Although your life has now changed, if you follow the above help guide you should avoid any nasty traps and will be able to enjoy the easy life – that’s what winning the lottery is all about, after all!

If you read this but have’t actually won any money yet, check out this post on the lotteries with the best odds. Who knows, you may need to come back to consult this guide…

Sources:
https://www.forbes.com/sites/zackfriedman/2018/09/26/powerball-mega-millions-win-advice/#20d61c532e88
https://www.personalfinanceforbeginners.com/what-to-do-if-you-win-the-lottery/
https://www.forbes.com/sites/deborahljacobs/2012/02/11/10-things-to-do-when-you-win-the-powerball/#2866432d3775