Winning the lottery is a fantasy for most of us. It’s certainly better than making our money the really old fashioned way – inheriting it. Whether the windfall is from Uncle Sam or Grandma Sadie, most of us need to take a breath and figure out what to do when the big bucks arrive.
The first thing to do upon discovering you have a lot of money coming your way should be to talk to experts. Talk to people with expertise that you can trust. If you do not already have a financial adviser, an accountant and a lawyer to assist you, get referrals. These should not all be the same person. Remember, you’re about to be rich. You can afford to talk to these people. If you have won the lottery, you will need to make the decision about what will work best for you – lump sums, or payments. You will get paid more over time with payments, but if you invest wisely you can probably make more by having the money up front.
Know that if you win the lottery, the government will get its share first. If you owe back taxes, child support or other court required payments, those come out first, too. Once you’ve rendered unto Caesar that which is Caesar’s, you have some other decisions to make.
For those that adhere to the rest of the above quote, one must also render unto G-d that which is G-d’s. Whether that means a tithe to your church or splitting the money up between a number of organizations will be up to you as the check writer. If this has been a true windfall, you might want to look into setting up a special trust or fund to help your organizations of choice. My organization of choice is Mazon (mazon.org) which is a Jewish response to hunger. It is dedicated to alleviating hunger among all people of all faiths and backgrounds. Mazon’s goal is to meet the needs where they are.
Once the windfall is in hand, a lot is going to change.
First comes your job. Whether it’s a winning lottery ticket or an inheritance that makes working unnecessary, you should consider what happens next. About 25% of lottery winners say they plan to continue working. Most eventually do not. Suddenly coming into money is a life-changing experience. Even if you continue working, you may want to find a different job. When you do not have to work for a paycheck, you can be a lot more selective about the job you choose. Some people who do choose to continue working end up in jobs that are fun, but that they could not have afforded to have at another time. Some people will switch to working as a volunteer for a cause they find meaningful. Whatever the job situation, the point at which you do not have to work for a living changes the whole dynamic.
The next big change will be your house. Whether you choose to stay where you are or move, a huge windfall gives you the freedom to have things exactly the way you want them to be. Bigger closets? Finished basements? Granite counter tops? All these things are possible. You can make any repairs or upgrades you desire. At the very least, you can pay off your own mortgage and that of any loved ones. If your windfall came with publicity, you may also want to consider some additional security installed in your home.
Another change will come in the size of your social circle. Remember who was there before the money. When word gets out that someone has come into money, people come out of the wood work to help you enjoy your wealth. Cousins you haven’t seen in years and friends long forgotten may suddenly show up. Stick to advice from the people who have always been with you, and to advice from the experts you engaged to help you figure out the money situation. Many experts recommend one of the first things you should do before turning in a large lottery ticket is to change your phone number and make it an unlisted number. That will help you control who has access to contact you.
Another change will come with the freedom to buy whatever you want. It may seem like spending your way through a mega-million winning lottery ticket would be tough. Many lottery winners have found a way to do it. When I worked for a catering company many years ago, Joan Kroc was when of our big clients. She was the wife of Ray Kroc, founder of McDonald’s. When she had parties, there was always a budget. Never once did she give us a blank check. Too many people who come into money quickly think that because they have more money than they ever had that the supply is endless. It only feels that way. Still, if you win $315 million like the single ticket holder in California’s Mega Millions on November 15, 2005, you can probably afford to own a couple of dream cars.
All of the changes you experience in life will not necessarily be positive. Money does not purchase freedom from stress or escape from all life’s troubles. Many lottery winners end up over extended following their big payout. Taxes, greedy folks, recessions, expensive purchases and major lifestyle changes can all wear on a person. Stress can come from good things as well as bad. There is a reason the Chinese have a traditional curse of “May all your wishes be granted.”
I still dream of the day I win a few hundred million dollars. I would happily settle for winning just a million. Of course, it would improve my chances if I were to actually play the lottery.