What To Do If You Win The Lottery?
We all love money and wish to be millionaires one day. And lottery seems to be the easiest way to become one. But is it though? A person’s chances of winning the $700 million Powerball lottery are 1 in almost 175,000,000. The chances of being struck by a lightning are 60,000 times more than winning a lottery. But let’s not get bogged down with what chances are there and what not. Let’s talk about what to do if you win the lottery?
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What To Do If You Win The Lottery?
When you do win the lottery, follow these steps:
Before you claim your prize,
1. Protect your ticket and take your time
It feels absurd to mention but you must protect that ticket. Sign your ticket at the back. Why? Well, just like a check, a lottery ticket is also considered a bearer instrument. Whoever signs the winning ticket and shows a valid ID, claims the prize money. Get some paper copies and remember to store some digital copies too.
Now, take a deep breath and wait for a few days to contact the lottery authorities. The main reason is to calm down the situation outside your house with media storming your doorsteps. You have a minimum of 60 days to claim your prize
2. Hold on to that job for now
Yes, yes, we understand how tempting it is to quit your job and fly to a tropical island to enjoy the beach and some beer. But hold your horses for now! There is a lot of financial planning to do and quitting your job is not going to help, at all!
And remember to remain quiet about your golden fortune at work.
3. You need some serious professional help
Chances are you probably don’t know how to deal with all the financial formalities involved. Time to hire a good finance attorney, a financial advisor and a Certified Public Accountant.
They will help you make the right decisions for your future. And feel free to get a second opinion if you are uncomfortable with any advice. Do you know What Is The Best Way To Invest $10,000?
4. Go underground
Once the world gets a whiff of your million dollar jackpot, people will be hounding your behind like mad dogs. Distant friends, long-lost family members, work colleagues, charities, causes, you name it and they are all coming for you.
Get a new phone number and go live in a hotel for a while. Getting a post office box for your mail will also help as it would make it harder to track you.
When you claim the prize
When claiming your prize, you will be given two choices- get a lump sum amount or an annual payment spread out over 20 to 30 years.
Lump Sum amount
You won’t receive the full jackpot amount when taking a lump sum payment. The winning jackpot amount you see is based on the lottery payment through an annuity. So when you take a lump sum amount, you receive the current cash value of the jackpot, which is less than the total annual payment.
When taking the long-term payout, they give you the full jackpot amount spread over a period or 20 to 30 years.
What to do next once you have chosen the payment type?
1. Pay Off Debt
It’s time to pay off your leftover student loans, old mortgage, and credit card debt or auto loans. However, do you know What’s The Better Option: Pay Off Mortgage Or Invest?
2. Start an Emergency Fund
Even millionaires run into financial problems, sometimes more so than the rest of us! Setting up a healthy-sized emergency fund is one of the smartest things you can do with your winnings. A good rule of thumb is to set aside enough to pay for six months of expenses.
The sudden rush of realizing that you have won a lot of money can drive anyone crazy. You must keep your calm and use your money wisely and not end-up bankrupt within 3-4 years of winning the lottery. And follow The 5 Steps To Protecting Your Money From Identity Theft!