It is true that most of us have all dreamt of getting our hands on that huge lottery win and the great things we could achieve when we instantly become millionaires. However, have you ever seriously considered what you could do in case you actually won that jackpot?
With excellent financial management you, plus your entire family including your heirs-may be able to live comfortably for a very long period. However from the minute you claim your prize money as the a winner, vultures will land on wanting a helping hand! If you are lacking in excellent money habits, you easily end up being your own nemesis by swiftly and carelessly spending all that fortune!
Here we look at several useful steps and tips to assist you in steering clear of any added risks. Majority of these will also work well for any other kinds of windfalls too, like when you suddenly come into an unexpected inheritance.
Don't share your good news with everybody
As soon as people come to know you've suddenly become wealthy, you're going to get badgered by endless requests for handouts coming from everybody ranging from charities to your long-lost relatives and forgotten friends-not forgetting all those financial "gurus" who are all going to be vying to get a piece of your potential business. So it would a great idea to try and evade all of them through maintaining anonymity if your state laws allow it.
Of course to keep something that is as huge as this would not be easy, but that doesn't mean you announcing to every Tom, Dick and harry about your windfall! It might be possible to keep your anonymity through setting up a limited liability company or a trust to receive your winnings. This may assist in keeping the requests that are going to bombard you to a manageable level.
Keep your winning ticket very safe
The very first protective step you ought to take between the win and your drawing the money is to personally sign the ticket back. This is because a lottery ticket is a financial bearer instrument which means that whoever has signed the ticket back and presents it with their photo ID could claim the money/prize. So in case you haven't signed it and it gets blown out of your hand whilst at the bus stand or you forget it a public cafeteria, you've probably lost your entire loot!
The worst case scenario would be having your winning ticket going missing. If you win, ensure you keep it a very secure until the day when you go and present it for the actual money.
Put together a team
For you to handle all that sort of big money could be quite overwhelming. Experts recommend that you engage a financial planner, perhaps an estate attorney, among several other experts to assist you in mapping out a strong long-term strategy that will help in how you handle all that money. You ought to carefully interview every member of the team you're putting together before finally hiring them.
Learn more about finances
In spite having assembled a financial team, it is recommended about acquiring some core financial comprehension for your own good. Having this knowledge will enable you to weed out fake "professionals" plus several others who may want to take advantage of your ignorance.
Depending on the respective rules governing your win, you may have the option of taking your prize money at once in lump sum or getting it paid out to you over a period of time in the manner of annual annuity. People who could be having challenges in controlling their urge to spend may prefer the better option of receiving their money in a kind of annuity. Before you go for the money, seek advice from your financial planner about the best available options which will also not fleece you too much. Keep your money in a very safe place until you've decided on your plan.
Lay aside some money for what's vital
You certainly want your newly acquired wealth to last as long as it could possibly do, if possible for life! Before you go splurging on your luxury items, you ought to work loosely with your financial team and plan on putting aside some money for your retirement, any future educational costs, repayment of debt and any other costs which will work towards keeping you financially sound.
Pay off all what you owe
Perhaps there is no better financial investment you could make than you settling all your debts. Whether what you owe is a mortgage, debit or credit card, your rate of financial return equals that rate of interest on that loan. Once you've paid down even a single dollar of debt, it becomes a dollar no longer owed!
Steer clear of abrupt changes in lifestyle
It's definitely extremely tempting to simply quit your current job after you become the Melbourne winner! Experts strongly caution against such an unwise move. Take some good time to allow the new found money mentality and scenario to really 'sink in' and seriously consider all your options about what you want to do and achieve. Some financial experts suggest a couple of months or even a whole year as you develop your well thought out plan.
Ideally, for the first couple of months don't rush into any drastic actions such as quitting your place of work, acquiring a new home abroad, purchasing a new car or home or taking that unplanned holiday trip to Africa!
Meanwhile, you could set aside a small fixed amount for several splurges; after all, you are the Melbourne winner and deserve a treat. To want to have some kind of celebration is only natural after your windfall. However, save the big things for later. Be modest! At the end of it, you will have gotten better and more mature understanding of how you want to spend your new wealth wisely.
Remain in control
Above everything else, you should always remain in total control. Yes, it's true that you've now put together a good and trustworthy team, yet financial gurus caution that you must have final say regarding any decisions and you must remain in the loop throughout. After all, you are the Melbourne winner and at the end of the day, it's up to you on how to spend your money.