{"id":7574,"date":"2018-08-20T03:30:55","date_gmt":"2018-08-20T09:30:55","guid":{"rendered":"https:\/\/www.personalfinanceforbeginners.com\/?p=7574"},"modified":"2019-11-02T12:00:44","modified_gmt":"2019-11-02T18:00:44","slug":"what-to-do-if-you-win-the-lottery","status":"publish","type":"post","link":"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/","title":{"rendered":"Here\u2019s What to Do (and Not Do) If You Win the Lottery"},"content":{"rendered":"<p>Have you ever caught yourself daydreaming about what to do after winning the lottery?<\/p>\n<p>In my mind, the first step looks a little like this:<\/p>\n<p>You\u2019ve just won $759 million by playing the lottery \u2013 the record-breaking amount won by Powerball winner Mavis Wanczyk in 2017.<\/p>\n<p>After choosing to cash out the lump sum and paying your taxes, your $360 million net worth (yes, you\u2019re already down halfway from the original number!) is <a href=\"https:\/\/www.theguardian.com\/us-news\/2017\/aug\/24\/massachusetts-powerball-jackpot-758-million-lottery\">higher than the value of many countries<\/a>.<\/p>\n<p>Your name is about to be spread all over the internet and television. Your life is about to change forever, but you still have one \u201ctypical\u201d obligation that needs to be addressed:<\/p>\n<p>It\u2019s time to quit your job.<\/p>\n<p>You\u2019ve quit your job before, but this time is different. You won\u2019t be needed any more personal references on your resume, and besides, you have appointments with a financial planner and tax attorney later this afternoon.<\/p>\n<p>It\u2019s tempting to just completely forget about your employer altogether and let them figure it out when the news breaks, but out of respect to your manager and coworkers, you decide to make a phone call and give your notice \u2013 effectively immediately:<\/p>\n<p>\u201cHey boss, I\u2019ve had something come up and I need to resign from my position immediately.\u201d<\/p>\n<p>\u201cThis seems really abrupt. You\u2019re an integral part of the team and we\u2019re in the middle of a big project. Do we need to discuss your compensation?\u201d<\/p>\n<p>\u201cMy decision isn\u2019t tied to my salary or benefits at all. I\u2019ve found myself faced with some major unexpected life changes, and it\u2019s best for both myself and the company if we part ways. Short for the short notice, and thanks for everything!\u201d<\/p>\n<p>After a few final niceties, you end the call and begin your early retirement.<\/p>\n<div id=\"x8rdcyofiry1aufvu0er\" data-volume=\"70\" data-ratio=\"16:9\">&nbsp;<\/div>\n<p><script type=\"text\/javascript\" src=\"\/\/video.mediavine.com\/videos\/x8rdcyofiry1aufvu0er.js\" async=\"\" data-noptimize=\"\"><\/script><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_49 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Jump to...<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"ez-toc-toggle-icon-1\"><label for=\"item-647a0cceebf7e\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-647a0cceebf7e\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-visibility-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#Life_after_winning_the_lottery_isn%E2%80%99t_easy\" title=\"Life after winning the lottery isn\u2019t easy\">Life after winning the lottery isn\u2019t easy<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#What_to_do_if_you_win_the_lottery\" title=\"What to do if you win the lottery\">What to do if you win the lottery<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#What_NOT_to_do_if_you_win_the_lottery\" title=\"What NOT to do if you win the lottery\">What NOT to do if you win the lottery<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#Is_the_lottery_a_good_financial_investment\" title=\"Is the lottery a good financial investment?\">Is the lottery a good financial investment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Life_after_winning_the_lottery_isn%E2%80%99t_easy\"><\/span>Life after winning the lottery isn\u2019t easy<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Not only are the odds of winning the lottery infinitesimally small \u2013 especially for those hundred-million payouts \u2013 but lottery winners often find that the consequences are far from what they expected.<\/p>\n<p>Sure, it\u2019s a problem anybody would love to have, but the reality of winning the lottery isn\u2019t quite as simple as the fantasy story written above.<\/p>\n<p>While you may start out with a sudden windfall of <a href=\"https:\/\/www.personalfinanceforbeginners.com\/generational-wealth\/\">generational wealth<\/a>, the final outcome isn&#8217;t often rosy.<\/p>\n<p>A quick look at past winners shows that the lottery money isn\u2019t the end of life\u2019s challenges (after all, <a href=\"http:\/\/fortune.com\/2016\/01\/15\/powerball-lottery-winners\/\">many lottery winners go broke<\/a>). Instead, you\u2019ll find yourself with a new set of problems to solve.<\/p>\n<p>The following set of tips \u2013 what you should (or should not) after winning the lottery \u2013 doesn\u2019t include every financial or legal consideration, but it\u2019s a helpful start if you feel like a big lottery win is in your future!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_to_do_if_you_win_the_lottery\"><\/span>What to do if you win the lottery<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><b>Sign your ticket immediately.<\/b> That small sheet of paper has become worth a LOT of money (and you thought your college diploma was expensive!). Imagine that you\u2019re Nicholas Cage\u2019s character in <i>National Treasure<\/i>. Your winning lottery ticket is the Declaration of Independence \u2013 don\u2019t let it disappear for any reason!<\/p>\n<p><b>Claim your winnings in time.<\/b> Depending on the lottery rules and the regulations of your state, you likely have a fixed amount of time to present your winning lottery ticket and claim your prize. Researching the rules and understanding the deadlines are important for two reasons: (1) it gives you time to get your affairs in order, and (2) it prevents you from potentially missing out on the money altogether.<\/p>\n<p><b>Get professional financial advice.<\/b> You\u2019ll need the guidance of at least two people: an attorney and a financial planner. This isn\u2019t the time to rely on one of your distant relatives or old high school friends. Seek the best financial advice. You\u2019ll need to not only pay your taxes on the winnings but find the best ways to manage that money for what will hopefully become generational wealth<\/p>\n<p><b>Protect your assets.<\/b> Eventually, the word is going to get out about your financial windfall. Suddenly you\u2019ll have potential financial risks that you would have never anticipated. You could find yourself involved in a lawsuit on completely made-up grounds that could cost you millions in litigation. Protect your financial assets by establishing your estate and taking out proper insurance.<\/p>\n<p><b>Keep a budget.<\/b> If you thought that winning the lottery would mean you never had to worry about money, think again! Professional athletes, celebrities, and past lottery winners all provide examples about just how easy it can be to spend egregious sums of money. While you may no longer need to fret about buying your latte or avocado toast, you may still need to keep a budget (perhaps 3-4% of your new net worth) to make sure your lifestyle is sustainable for the future.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"What_NOT_to_do_if_you_win_the_lottery\"><\/span>What NOT to do if you win the lottery<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><b>Don\u2019t tell anybody.<\/b> You\u2019ll want to remain anonymous for as long as possible. Perhaps you\u2019ve always wanted to be \u201crich and famous,\u201d but this isn\u2019t the time to put this theory to the test! Just like the deadlines to claim your winnings, the rules for staying anonymous also vary based on where you live. In the meantime, consider changing your phone number and deactivating your social media accounts.<\/p>\n<p><b>Don\u2019t forget your taxes.<\/b> While you may feel like you\u2019re on top of the world after winning the lottery, you\u2019re still responsible for paying taxes on your winnings just like everybody else. If you thought you were paying a lot of taxes before, just you wait!<\/p>\n<p><b>Don\u2019t carry debt.<\/b> Get rid of your debts \u2013 your mortgage, car payments, student loans, medical bills \u2013 immediately. While you may feel like your financial future is secure, there\u2019s still no guarantee of what your future will hold. <a href=\"https:\/\/www.personalfinanceforbeginners.com\/avoid-debt\/\">Eliminating your debt<\/a> is always a good idea that your future self will thank you for.<\/p>\n<p><b>Don\u2019t do it alone.<\/b> With this sudden influx of money, you\u2019re going to constantly find yourself berated by requests: to help out family members and friends, to support non-profit organizations, or to invest in \u201conce-in-a-lifetime\u201d business opportunities. You may very well choose to use your wealth to support some of these causes. However, this doesn\u2019t mean you should handle these requests on your own. Involve a trusted team of advisors that can help you evaluate the legitimacy or efficacy of these requests.<\/p>\n<p><b>Don\u2019t make immediate lifestyle changes.<\/b>&nbsp;When you imagine your life after winning the lottery, you probably expect lots of changes: perhaps buying a new house and car, quitting your day job, and traveling around the world full-time. While these things might become an option, you don&#8217;t need need to make substantial lifestyle changes overnight. Reflect on your <a href=\"https:\/\/www.personalfinanceforbeginners.com\/financial-values-questions\/\">financial values<\/a>, create a plan, and make gradual adjustments instead.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_the_lottery_a_good_financial_investment\"><\/span><b><img decoding=\"async\" loading=\"lazy\" class=\"alignright wp-image-7576\" src=\"https:\/\/www.personalfinanceforbeginners.com\/wp-content\/uploads\/2018\/08\/what-to-do-if-you-win-the-lottery-2.jpg\" alt=\"\" width=\"320\" height=\"481\" srcset=\"https:\/\/www.personalfinanceforbeginners.com\/wp-content\/uploads\/2018\/08\/what-to-do-if-you-win-the-lottery-2.jpg 600w, https:\/\/www.personalfinanceforbeginners.com\/wp-content\/uploads\/2018\/08\/what-to-do-if-you-win-the-lottery-2-200x300.jpg 200w\" sizes=\"(max-width: 320px) 100vw, 320px\" \/><\/b>Is the lottery a good financial investment?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Nope.<\/p>\n<p>It\u2019s not even a \u201cbad investment\u201d \u2013 playing the lottery simply isn\u2019t an investment strategy or retirement plan at all.<\/p>\n<p>It should be considered a financial splurge that\u2019s nothing more than fun and entertainment.<\/p>\n<p>Have your coworkers invited you to join them in creating a pool of money to buy Powerball tickets?<\/p>\n<p>If you really want to play, a Powerball ticket costs just $2. Consider buying a couple of tickets and pulling it from the discretionary income portion of your budget \u2013 but you should never be spending hundreds of dollars on lottery tickets or making them a frequent payday purchase.<\/p>\n<p>It takes patience and discipline, but you can create your own fortune through traditional investing. Instead of playing the lottery:<\/p>\n<ul>\n<li>Review your budget and expenses to make sure at least 15-20% of your paychecks are going toward long-term financial goals<\/li>\n<li>Sign up for your employer\u2019s 401k plan and contribute at least enough to get the full employer match (if offered)<\/li>\n<li>If you\u2019re already contributing the percentage needed to receive the full employer match, consider opening a Roth IRA<\/li>\n<li>Develop valuable new skills and accept new responsibilities that will help <a href=\"https:\/\/www.personalfinanceforbeginners.com\/i-got-a-raise\/\">you get a raise<\/a><\/li>\n<\/ul>\n<p>Although these suggestions don\u2019t sound quite as exciting as winning the lottery, there are a couple of big advantages: everybody can win with the strategies, and the odds are in your favor!<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>There you have it: a starting guide for what you should do if you win the lottery.<\/p>\n<p>Though your chances are astronomically small, if you ever find yourself winning a substantial fortune through the lottery, be sure to seek out the guidance of professional financial advisors who have your best interests in mind.<\/p>\n<p>And don\u2019t forget this important fact:<\/p>\n<p>Playing the lottery isn\u2019t a substitute for retirement planning. In fact, it will <i>essentially<\/i> always be counter-productive to reaching your financial goals.<\/p>\n<p>Don\u2019t leave your financial future to luck. Live within your means and <a href=\"https:\/\/www.personalfinanceforbeginners.com\/new-investors\/\">start investing<\/a> a portion of your income each month. It may not happen overnight, but with consistency and time, you\u2019ll <a href=\"https:\/\/www.personalfinanceforbeginners.com\/become-a-millionaire\/\">become a millionaire<\/a> eventually!<\/p>\n<p><i>Have you ever bought a lottery ticket? Or won any money with a lottery ticket? What would you do win the winnings?<\/i><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Have you ever caught yourself daydreaming about what to do after winning the lottery? In my mind, the first step looks a little like this: You\u2019ve just won $759 million by playing the lottery \u2013 the record-breaking amount won by Powerball winner Mavis Wanczyk in 2017. After choosing to cash out the lump sum and [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7579,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0},"categories":[34],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Here\u2019s What to Do (and Not Do) If You Win the Lottery<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Here\u2019s What to Do (and Not Do) If You Win the Lottery\" \/>\n<meta property=\"og:description\" content=\"Have you ever caught yourself daydreaming about what to do after winning the lottery? In my mind, the first step looks a little like this: You\u2019ve just won $759 million by playing the lottery \u2013 the record-breaking amount won by Powerball winner Mavis Wanczyk in 2017. After choosing to cash out the lump sum and [&hellip;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/\" \/>\n<meta property=\"og:site_name\" content=\"largeflare\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/personalfinanceforbeginners\" \/>\n<meta property=\"article:published_time\" content=\"2018-08-20T09:30:55+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2019-11-02T18:00:44+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.personalfinanceforbeginners.com\/wp-content\/uploads\/2018\/08\/when-you-win-the-lottery.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"512\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Aaron\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@PFforBeginners\" \/>\n<meta name=\"twitter:site\" content=\"@PFforBeginners\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Aaron\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/\",\"url\":\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/\",\"name\":\"Here\u2019s What to Do (and Not Do) If You Win the Lottery\",\"isPartOf\":{\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/#website\"},\"datePublished\":\"2018-08-20T09:30:55+00:00\",\"dateModified\":\"2019-11-02T18:00:44+00:00\",\"author\":{\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/#\/schema\/person\/87121b928997f68b80eb866cb102a820\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#breadcrumb\"},\"inLanguage\":\"en\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/what-to-do-if-you-win-the-lottery\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.personalfinanceforbeginners.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Here\u2019s What to Do (and Not Do) If You Win the Lottery\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/#website\",\"url\":\"https:\/\/www.personalfinanceforbeginners.com\/\",\"name\":\"largeflare\",\"description\":\"Take the First Steps Toward Financial Independence\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.personalfinanceforbeginners.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/#\/schema\/person\/87121b928997f68b80eb866cb102a820\",\"name\":\"Aaron\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en\",\"@id\":\"https:\/\/www.personalfinanceforbeginners.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/d1e2dbe8833523ed455493ad871d5428?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/d1e2dbe8833523ed455493ad871d5428?s=96&d=mm&r=g\",\"caption\":\"Aaron\"},\"description\":\"Aaron is a personal finance lover and lifetime entrepreneur who graduated with a marketing degree from the University of Utah in 2016. 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