If You Win the $1.6-M in the Mega Millions Lottery, You Still Need a Financial Plan
- Playing the lottery has become the new version of the American Dream for many people.
There have been no Mega Millions jackpot winners since 24 July, so the jackpot will be at least $1.6-B for Tuesday’s drawing. That payout will be a national record.
Every lottery player knows, that the cash options are lower when the winner chooses if. The Mega Millions has a lower cash option of $964-M. That is enough cash to create multi-generational wealth.
The original version of the American Dream means a lifetime of hard work, planning and advancing in careers without to much wavering.
Winning a Mega Millions lottery changes a that, and the wealth is there now without any hard work and without any qualifications other than buying the winning ticket.
Winning a lottery of just 10% of the size of the Mega Millions will make people instantly members of the 1%’rs Club.
There is a dark side for many who book big lottery winning, as many lottery winners go broke, some in just a few years.
So, below are some prudent things Not to do if you ever win the lottery.
The odds: 1 in 302-M. But, such odds do not deter lotto players from the Dream of becoming instantly really rich.
The planning for what Not to do if you win the lottery may also be applied to anyone who comes into fast and unexpected wealth from a business sale, an asset sale, an unexpected inheritance, a legal judgment, or even be applicable to those who become stock-options millionaires.
If you wish to keep a lifetime of wealth it requires serious planning.
It is a fact that most lottery winners are bombarded by temptations that can rob them of their newfound wealth.
Purchasing an endless number of things can erode vast wealth. But having to keep paying for those things, followed by poor decisions and falling under the influence of friends and family are just some of the issues. There are predators and other considerations that also have to be avoided at all costs.
Overall, most lottery winners choose to take the lump sum cash option to have instant and vast wealth rather than to get paid out over a lifetime.
But, no matter the lump sum or lifetime payout both requires financial planning, budgeting, understanding taxes and investments, and lots of other actions for anyone coming into wealth to keep that wealth.
Endless spending is just one easy way to go broke.
Add up the cost of buying mega-mansions, yachts, private jets, luxury cars, and lavish vacations. Then think about the cost of fine art and collectibles, antique cars and the best jewelry money can buy. And of course you could rent a private island or take everyone you know on a lavish private cruise. The costs for this stuff are huge and come fast.
Burning through $100, 200, or 500-M is easy to do when you consider the perpetual costs of insurance, an entourage, private security and taxes that accompany having big money
Now, if it sounds remotely silly that you need to set up a strict financial plan and that you need to put up safeguards to protect your new empire-money, then you are already at severe risk of going broke if you ever become really rich.
So, here are some Do Nots
Do Not forget to sign that winning ticket and to report it immediately.
It may seem ridiculous that some people might fail to sign a winning lottery ticket. Or that a winner would forget to report the winning ticket to the state. It has happened. Millions of lottery dollars have gone unclaimed.
A winning lottery ticket is a bearer instrument. And whoever shows up with it gets paid. You have to sign and secure that ticket, and you then have to report to the state you bought it in.
Do Not brag about winning the lottery to anyone, keep quiet.
Telling people that you know before you collect your winnings can put you in danger. Everyone who has ever done anything for you now may come with their hands out asking for something. You may even become a target and a victim
Remain anonymous for as long as possible (there are only 6 states that allow winners to remain anonymous). Do not rush out and tell the world how rich you are and put yourself in jeopardy.
Do Not take the lump sum cash option without careful consideration.
Most lottery winners elect to receive a lump sum today rather than getting money sent out over a lifetime. A figure that has been cited in the media is that around 70% of lottery winners end up broke again, some in just a few years.
When and if you are the winner of a huge amount of money go see a reputable tax professional and a reputable investment advisor at a tTop money management firm with. Do this before you automatically make the decision about a lump sum or annuity option.
Do Not start thinking that you are now smart about finance.
Winning millions of dollars instantly does not make you any smarter about money than you were right before you found out you got rich.
It may prove to make you realize that you knew very little about money.
Lottery winners, and those who come into unexpected vast sums of cash, need to immediately get outside financial advice. If you are living paycheck to paycheck before the lottery you likely do not know about managing big money, tax and asset protection strategies.
The management strategies of the very wealthy go beyond just buying stocks, bonds, commodities and other assets and letting those investments ride.
Having a solid and respectable team of financial advisors and managers from reputable firms will act as your buffer to protect your assets now and in the future.
The Big Q: Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated?
The Big A: If you answered yes, you probably did not bother playing the lottery.
Hang on, I am going to buy a ticket Tuesday before the close!
Have a terrific weekend
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