Do this if
YOU
Win the
lottery
Think that a financial windfall will set you up for life? Not so fast... Research has found that lottery winners and windfall recipients don't always end up ahead.
As many as
70%
of windfall recipients blow the money within several years.1
lottery winners saved just
16¢
of every dollar they received.2
1,934
florida lottery winners declared bankruptcy within 5 years of winning.3
About
50%
of inherited money is spent or lost.4
- WORK BONUS
- COMMISSION
- PROFIT FROM A SALE
- INHERITANCE
- TAX REFUND
windfalls come in many forms...
- DIVORCE SETTLEMENT
- RETIREMENT BUYOUT
- LIFE INSURANCE
PAYOUT - LOTTERY WIN
Big or small, what's important is that you use windfalls the right way.
if you are ever the holder of a winning powerball ticket or the lucky recipient of a windfall, here's what you should do.
DON'T QUIT YOUR JOB
(or make other drastic life changes)
Even a small windfall can be a shock to your otherwise rational brain. Set a one-year moratorium on big life changes to let emotions settle and logic win.
get professional advice
Details matter and mistakes with your windfall can cost you big time in taxes, fees, and legal problems. Set yourself up for success with expert advice; at a minimum, consult a financial professional, attorney, and CPA before making any moves.
understand the psychology of sudden money
Windfalls aren't just about money. They can include a lot of powerful emotions: euphoria, relief, guilt, expectation, and more. Take inventory of yourself and don't let those emotions push you into making irrational decisions.
protect your
privacy
If your windfall is a big one, it's not a good idea to broadcast your good fortune lest scammers, thieves, or greedy people come calling. Stay under the radar and let your success speak for itself.
Set Priorities
Depending on your financial situation, you will have different priorities for your windfall. Generally, you'll want to pay off debt first and save for your long-term needs second. However, every person is different, which is why it's so important to get professional advice.
think about your loved ones
One of the best feelings in the world is being able to do something special for someone you love. But your generosity can cost you if you give too much away to friends and family. It can also ruin your relationships. Professionals can help you sort through your options and decide how (and how much) you can give to your loved ones.
don't get big eyes
Think about your future first. It's very easy to squander even a large windfall if you spend it like there's no tomorrow. Once you've got a long-term strategy for the money, you'll have a better idea of how much you can safely spend on fun stuff.
what are your odds of winning the lottery?
Worst than 1 in 292 million.5 You are more likely to be:
struck by lightning twice
(1 in 9 million)6
killed by a shark
(1 in 3.75 million)7
Accepted to Harvard
(6 in 100)8
a mars one astronaut
(1 in 42,000)9
Financial Lesson:
be smart about windfalls. don't let the odds beat you.
If you're lucky enough to win the lottery or receive a large sum of money, you have a unique opportunity to strengthen your finances. However, it's easy to get big eyes and let lifestyle creep eat away at your good luck.
If you don't want to be one of the people who burns through a windfall, follow the steps laid out above. And, most importantly - don't go it alone.
Get professional help and objective advice to help make the most of your opportunity.
Win the lottery? Have questions about a windfall?
Give my office a call. I'm here to help.