9. 34. 92. 6. 3. 17.
As he announces the numbers on the screen, your eyes dart back and forth between the newscaster and the ticket in your hand.
A moment of confusion. A moment of shock. Five double-takes later, you realize that you’ve won the lottery.
“WE WON!! WE WON!!” you scream to your wife in the next room. She rushes in, glances from the ticket in your hand to the TV and back, and runs in for a hug.
Is this how your win went? Maybe this is a daydream of yours, and you’re here following up. If you’re the mega-millions lottery winner or Powerball winner of the recent $2 billion jackpot, you’re probably freaking out and looking for answers.
We can help. Read on to learn what to do when you win the lottery, besides buying a new car, of course.
What to Do When You Win the Lottery
So, what should you do if you win the lottery? Buy a Bengal tiger on the black market, quit your job, and move to the Canary Islands?
New gamblers might think that’s a great idea (view here for more on how to get started playing the lottery). In reality, that’d be a great plan only for anyone who wants to squander their winnings in a few years and live the rest of their life in regret.
Don’t want that to be you? Here’s what to do after winning the lottery to make that money last.
1. Protect Your Ticket
This little piece of paper is now your most valuable asset. Don’t just shove it in a drawer, and definitely don’t run around town showing it off to everyone and their mother.
Instead, go out and buy yourself a safe. Place the ticket inside. Alternatively, you can put it in a bank safety deposit box for safekeeping.
This is especially important if you don’t sign the lottery ticket. Why wouldn’t you sign it, you ask? Well, because signing it might bar you from creating certain trusts down the line.
Before you lock your ticket away for safekeeping, make tons of copies. Those you can keep at home in your safest spot. You’ll need them to give to your lawyer and financial advisors later.
2. Assemble Your Team
If there’s one hard truth about winning the lotto, it’s that you won’t be able to handle it alone. You need to hire a team of trusted and intelligent advisors to help you manage this insane life event.
First up: You’ll need a financial advisor. They’ll be able to help you choose and manage investments and make decisions about your cash.
Next up: Find yourself a fantastic lawyer. When it comes to large sums of money like this, you’re going to need ironclad contracts drafted by a legal representative who’s sharp as a tack.
Finally, you’ll need an accountant. You’re going to have a lot of tax obligations to figure out and a big book to balance.
3. Stay Anonymous
Sure, you’ll likely want to share some of your winnings with your closest family and friends. Are you ready for every old high school acquaintance and their mother to come out of the woodwork looking for handouts, though?
Get ready, because it’s likely to happen. Friends have even been known to lie to lottery winners about their situations for a chance at some cash.
Some states will allow you to remain completely anonymous, while others have time and dollar amount stipulations. Find out what the rules are in your state, and if you can, keep your name on the down low.
4. Lump or Payout?
When you win the lottery, you can collect your winnings in one of two ways: a lump sum or a slow payout over 30 years.
Taking the lump sum guarantees you’ll get all your winnings (you never know!). It also allows you to make larger investments that will pay off greater over time.
If you take the slow payout, however, you’ll win more money over time. It’ll also guarantee a steady income from your win. This will reduce the chances that you’ll mess up somewhere along the way and squander the money.
5. Pay Off Your Debts
Sure, there are tons of fun things you want to do with your money once you hit the jackpot. But what should you do if you win the lottery?
The first thing you should do is pay off your debts — all of your debts. Since these grow over time, it’s the smartest investment you can make for yourself.
This doesn’t mean you can’t have fun with your winnings, too. Those indulgent purchases will feel a whole lot better if you get your ducks in a row first, though.
6. Invest Smart
Every lottery winner needs to know how to invest lottery winnings. Investing is the name of the game when it comes to making that money last. If you invest smart, you just might be able to take that lottery money and turn it into your early retirement.
Don’t be intimidated if you’re new to investing. Everyone has to start somewhere! The best thing you can do is work on growing your knowledge on the various types of investments so you can make informed decisions.
Make sure you consult your financial advisor before making any decisions. It also might be a good idea to place your money into the hands of a seasoned investment banker. They can manage your portfolio for you and you’ll be able to sleep soundly at night knowing everything’s taken care of.
7. Make Charitable Donations
Once you’ve paid your debts and invested your money, considering making charitable donations to leave a positive lasting legacy. Remember to stay humble and think of those less fortunate than you. You don’t want to become a miser and forget others in need, do you?
Charitable donations are also great tax write-offs, which will help because you’ll likely be in a new tax bracket!
Learn to Manage Money
If you’re reading this as a recent lottery winner, congratulations on your win! You’re going to need to dive headfirst into the world of money management, beyond this guide.
We can help. Check out our other financial management articles. They’re chock full of information you’re going to need pretty soon!