Professional Advice for Lottery Winners
If one day you win the Mega Millions jackpot – the 7th largest in the lottery history which is worth 530 million dollars. Even with tax exclude, the lucky winner will become a millionaire. If you are this lucky winner, now it is time to decide what to do with your windfall money. If you have no idea of what to do, follow what five financial experts say. But first, check out Vin.fun to see the gaming experience with a high probability of winning.
Mark Cuban: “Don’t make investments”
Many lottery winners immediately find investing options when they hold the winning tickets. According to them, the investments would bring them continuous income. Thinking so, they seek for potential shares and buy them.
Don’t risk your money
Let’s calm. It is the scenario in which your shares are profitable. Have you thought about the other case in which your shares are not profitable? Cuban, an investor on “Shark Tank” – a famous TV series for entrepreneurs to raise capital for their new business, does not think so. According to this investor, lottery winners should not invest because “You don’t want to blow it all in one spot”, he said in the Dallas Morning News in 2016. Instead, his advice is to opt for the annuity plan.
In his opinion, protecting your winnings is much more important than seeking an investing opportunity. Actually, there is no need to become a smart investor if you win a Mega Millions or a Powerball jackpot. An investment is not necessary but risky. Therefore, you can put all your money prize in a trusted bank and live a wealthy life, forever.
It has always been challenging, even for professionals in this field, to analyze and buy profitable shares. Don’t be greedy or you will lose all your money. It is tempting to multiply your earnings. Putting it on a bank and receive the interest monthly, you will sleep a lot better knowing you won’t lose money. There are always risks in the market. You buy shares in a reputable, big business but it does not necessarily mean that tomorrow, the shares could rise in price. Going that route, you could end up losing everything.
Besides, learn to say no. According to Mark Cuban, you need to be careful or you will become someone’s ATM, no matter it is your wife, your parents, friends and relatives. He advises “Tell all your friends and relatives no”. There will be many people coming and ask for your money. Tell them no. Feel free to help some, but remember that it is not your responsibility.
Farnoosh Torabi: “Take time to reflect”
In CNBC Make It, Farnoosh Torabi advises lottery winners to not do anything right away. Farnoosh Torabi is a personal finance author and the host of the “So Money” podcast – which is very famous in the financial field. According to her, for at least a few weeks or a month, the lucky winners should abstain from making any money moves because their decisions in this period are hugely influenced by friends, relatives or family.
Her advice is to take time to reflect with your family on how you are about to use the money to have a wealthy life and how to make it last as long as possible. Besides, if your state allows, be an anonymous winner. There is no need to announce your prize with strangers, friends or even your family. Keeping things private does not only help you avoid bombarded request but also protect your life. If you have not heard about some lottery winners being killed by their greedy relatives, search some on the internet and you will understand why you should do so. You can hire a financial consultant to help you design a suitable financial plan.
Elizabeth Glasgow: “You need to decide whether to trust yourself”
When it comes to a large windfall, thinking about taxes is important and thinking about your money habits is, too. This is advice from Glasgow, a professional at McDermott Will & Emery who has worked with high net worth clients for years.
You might hear about some lottery winners end up losing all of their money due to their financial freedom. They might spend too quickly. Throw their money around or are too generous with their friends, family and relatives.
All financial professionals agree that a wise option is to work with a trusted financial consulting company. They will make sure to deal with legal problems related to taxes and help your money to last for long.
Can you trust your ability to manage money?
If you are about to share your Powerball prize with your family, for instance, be careful of the tax rate you could face. In the United States, for instance, you can give 11.4 million dollars away, free of tax. For the money above this amount, you have to pay tax. Yes, your generosity will cost you.
Kevin O’Leary: “Don’t screw it up!”
Kevin O’Leary is a financial expert and an investor in “Shark Tank”. According to him, instead of spending it all, “pay yourself an annuity”. He suggests investing in “low volatility, dividend paying stocks”. No risky moves with your lottery money should be placed. Even it is your lucky money, it is not worth blowing it.
Suze Orman: “Ask yourself if you’re able to manage your own guilt”
This is useful advice from a famous personal finance expert, Orman, who hosts the “Women & Money” podcast. You have to consider your ability to manage the windfall when it comes to handling the lottery winnings. Don’t just spend it randomly and freely unless you want to end up losing all the money.
A common suggestion is to opt for the annuity. If you have had any experience investing in stocks, don’t risk your money, be responsible for it. Besides, it is needed to consider how this money will affect your relationship with relatives, friends and family. You might run out of money if you have no idea how to manage it. Taking an annuity is a smart choice if you feel guilty towards your friends and family, if you cannot control your money flow and if you do not know anything about the market.
Winning lottery is what we all wish. But once receiving the windfall, there are lots of issues arising and the advices from financial experts that we have mentioned above will offer help.