Advice for Lottery Winners

Lottery TicketIf you’ve got a winning lottery ticket, here are some starting tips:

If you haven’t collected yet:

  • If you’re at the convenience store and you check your ticket in an automatic ticket-checker, and it says something like “Big Winner — See Cashier” — don’t. Instead, go home and check the numbers on the web. There has been at least one instance in which a convenience store clerk convinced a million-dollar winner that his ticket was worth only $1,000. He paid the actual winner that amount and kept the winning ticket for himself (fortunately, he was caught).
  • Don’t sign the ticket quite yet. Yes, I know this runs counter to what the lottery web site may tell you. But you might have the option of claiming the prize through a trust, or in some other way that will preserve your anonymity.
  • Do put the ticket in a very, VERY safe place — like a bank safe-deposit box. As long as you do this, and keep it secret, and make sure no one else has access to it, then it shouldn’t matter whether you’ve signed it quite yet.
  • On your way to the safe-deposit box, make two photocopies of your ticket. Until you hand in the winning ticket, put these copies also in two safe places that no one but you knows about or would check. Don’t mention this to anyone else yet.
  • Don’t collect your prize immediately. Find out how much time you have to collect. This is how much time you have to get your head on straight, and your ducks in a row.
  • Don’t worry so much about a current shortfall of cash, as long as you can realistically avoid really bad things (like repossession of your home, or possibly eviction) until you collect your winnings. Yes, I know you’re chomping at the bit to collect the money and do some bill-paying and spending. Be patient. Vow that you’re going to have your ducks in a row first. Use your desire to collect as a motivation to finish getting those ducks in a row.
  • Don’t tell ANYBODY, in fact, except possibly your spouse — and ONLY THEN if you REALLY, REALLY trust him or her with your very LIFE. If your spouse is the kind of person who might try to steal the ticket from you, I wouldn’t tell him or her. (You’re also going to need to sort out how your state is likely to treat property that you’ve acquired during your marriage or partnership, should it come to that. And you need to think about how you’re going to handle dividing — or not dividing — the money with your partner.)
  • Don’t tell the kids, or any other relatives or friends, for that matter.
  • Do consider that in spite of what you’ve been told, it may well be possible to stay anonymous, or at least close to it.
  • Do think about what you want — the brief glory and hoopla of a public lottery winner (along with all of the permanent scheming, jealousy, lack of privacy, restrictions on your activities, and dangers that brings) — or a life as peaceful as the one you have now, but with more freedom and a lot more prosperity.
  • Do know how much time you have before your lottery ticket expires, and don’t let that time run out.
  • Don’t make your move until you’re ready.
  • Assuming you have the option, don’t decide whether to take the lump sum or payments over time until you’ve consulted your financial and other advisors and really thought it all through.
  • Do start to prepare for life after the lottery.

Whether you’ve collected or not:

  • DON’T PLAN TO BUY A HOUSE OR A FANCY CAR, OR MAKE OTHER MAJOR EXPENDITURES BEFORE YOU PLAN HOW YOU’RE GOING TO KEEP, PRESERVE AND EVEN GROW YOUR WEALTH. The number one thing is to preserve your wealth for the future. You don’t want to arrive again at a day when it’s all gone. In fact, you don’t want even a portion of it to be wasted. You want this to go well.
  • So don’t plan your spending before you plan preserving your wealth, because if you do, your spending may destroy your ability to preserve your gain.
  • Don’t make commitments to other people until you know what you’re doing. Instead, tell them, “I’m going to get organized and get some good advice. Everything is kind of a blur right now, and I probably can’t get through what I need to get through in just a day or two. You might talk to me in a couple of weeks or so.”
  • Do start to get good advice on how to handle the win and resulting wealth. (If you’d like a Bible verse on this, here it is: “Listen to advice and accept discipline, and at the end you will be counted among the wise.” — Proverbs 19:20)
  • There are several kinds of advice you need. Everyone tells you to get legal advice and financial advice. Attorney and financial advisor. For most people, this means an investment advisor. But you’re also going to need tax advice as well. And given the past problems of previous winners, I recommend you get strong general and personal advice, too. (That, incidentally, is where I come in. I fill in gaps. And they’re critical gaps that a lot of lottery winners unfortunately fall through.)
  • Do understand that there are wolves out there who are going to come after you if they can find you. These wolves include (among others) companies that offer to buy out your future lottery payments for cash now, if you choose payments instead of a lump sum. These kinds of offers are often a pretty bad deal for the lottery winner.
  • Understand that AS MANY AS 70% OF LOTTERY WINNERS GO THROUGH THEIR MONEY IN JUST A FEW YEARS. Don’t just tell yourself you’re different. Without making and following a good plan, you AREN’T any different. Many of those who’ve gone through their winnings never intended to — but they did.

Don’t think of your lottery win by itself as the answer. It isn’t. Winning the lottery gets you onto a bigger playing field. That game is the important one, and whether you win there or get carried off the field on a stretcher will be decided by what you do after your lottery win.

Or, to put it another way: Winning the lottery gives you the money power to improve your life — or to destroy it completely.

You can harness this power to change your life for the better. But it isn’t going to happen automatically.

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