08 June 2015

How To Ensure You're Set Up For Life

Ten Tips For When You Win The Lottery

The only story tabloids love more than lottery winner stories are stories about lottery winners who squander their wealth – and sadly there are more of them out there than you might think. Winning the lottery can be an extremely overwhelming experience and sometimes it gets the better of people. But we're not going to let that happen to you.

Ten Tips For When You Win The Lottery

Previously we've looked at ways to increase your chances of winning the lottery. What happens next, of course, isn't easy to predict. Winning the lottery is a dream come true but just because you dream about something for years doesn't mean you're prepared for the reality. So let's get you primed for the big time with our top ten tips for future lottery winners.

Winners Tip #1: Stop And Think

Ten Tips For When You Win The Lottery

This is a monumental moment in your life and like all such events, both triumphant and tragic, sometimes it takes a while for the true realisation to sink in. So it's best to proceed with caution instead of rushing in to claim your prize – because once you do that everything changes…

First comes the elation, the sprays of champagne – all the usual lottery pageantry culminated in the ceremonial passing of the novelty cheque.  And from this moment on the novelty ends and the reality begins.

Sure it may feel like a fairy tale but it's not – and you need to realise this. Plus you need to understand that winning the lottery doesn't automatically ensure you'll live happily ever after. That still takes plenty of preparation.

Sure you're rich, but you're not Silicon Valley rich. Therefore the first thing you need to come to terms with is that, although the amount of money you won may seem staggering, its supply is still finite. So think long and hard about what, exactly, you want to do with it and plan your next moves carefully.

Winners Tip #2: Stay Anonymous

Ten Tips For When You Win The Lottery

Seriously – don't tell anyone, at least not yet. You're not there to provide free publicity, sell newspapers or put your face on display so everyone can recognise you and approach you, begging bowl in hand. So, if you're not sure how to handle your newfound wealth our advise to you is to stay anonymous. 

Even the most gregarious celebrities will tell you there's a downside to being famous – the lack of privacy, the seething jealousy, the threats, the nasty comments and vicious online trolling. You don't need that in your life. Nobody does.

Now you may think – "but I can tell my family and best friends right? Our advice would be to hold off on that until you're fully prepared for the consequences and have made the necessary legal and financial arrangements. Ditto for social media – avoid the urge to post a heat-of-the-moment Facebook status update. No matter how cute and coy you think you're being you may regret it later. 

Again, it's all about exercising caution first and foremost – those who truly care for you and your welfare will appreciate your need for secrecy. 

Winners Tip #3: Don't Quit Your Day Job

Don’t make this mistake in the early stages. It's one of the most common mistakes made by lottery winners eager to burn bridges and tell their boss where he/she can stick it.

Even if you hate your job it still helps ground you in reality. It will bring you down from Cloud 9 with a bump and allow you to appreciate your good fortune and view it through the prism of practicality. Nothing helps you get a better understanding of the true value of money than having a gentle reminder of what a grind it can be sometimes just put food on the table.

Many winners whose prizes are in the single-digit million range overestimate exactly how far their money can stretch. A house, a new car, setting up a fund for your children, going on expensive holidays – all these things add up. And it could well be that, after all of that, the only thing you find yourself lacking is a regular monthly income – so don't burn those bridges just yet.

Finally, never underestimate the social aspect – many winners, following early retirement, find themselves suffering from loneliness and a lack of purpose. Take the story of Jane Park who won £1 million on the UK National Lottery aged just 17. She bought herself a house but the solitude got to her so she rented it out and moved back in with her mother. She later decided to get a part time working in the local chip shop because she missed the interaction with people.

Winners Tip #4: Resist The Urge To Go On A Spending Spree

Ten Tips For When You Win The Lottery

For some lottery winners the euphoria gets so much that it short circuits their reason centres and causes them to go on epic spending sprees. Countless winners, both young and old, find themselves unable to shake off the initial giddiness and throw themselves head-first into the champagne lifestyle without ever taking stock of their dwindling bank balance – until it's too late.

Take the story of Evelyn Adams, the New Jersey woman who won beat extraordinary odds to beat the lottery twice – in 1985 and 1986 – only to fritter and gamble it all away and now lives in a trailer park. Or Brit Michael Carroll, who blew his entire £9.7 million windfall on bling, fancy cars, prostitutes and crack and now considers himself lucky to work in biscuit factory.

Tabloids love these sort of stories and are poised to pounce, claws sharpened and ready. So before you go off like a real-life Monty Brewster it might be an idea to deliberately freeze yourself out from your winnings for a determinate period of time until you've come to terms with exactly how much money you have and how best to capitalise on that fact. 

Winners Tip #5: Create Your Priorities List

Take your time and do some soul searching. You now have the means to do pretty much whatever it is you want to do in your life – but have you ever really stopped and asked yourself what those things are?

The obvious acquisitions include a big house, a fancy car – but will those really make you happy? Would you really be happy locked up in a big mansion cut off from everybody? Do you really want the kind of car you can't park anywhere for fear somebody might damage it? Maybe you'd be much happier buying that camper van and heading off on the great American road trip like you always wanted?

Remember you don't need to impress anyone, just do what makes you happy. We live in a consumerist society and, as such, have been conditioned since childhood to think that buying something newer, bigger and flashier will make us happier. But it's not always the case. Listen to your inner child, what was that one dream you always had, what's that one item at the top of your bucket list since as long as you can remember? What's that one adventure you always wanted to take? Well, why not take it?!

Winners Tip #6: Get Legal Advice

Ten Tips For When You Win The Lottery

Dreams are all well and good but now it's time for a reality check. In the immortal words of Saul Goodman it's time to "lawyer up!"

Of course this isn't a TV show so you don't want a shyster like Saul but rather a competent legal professional with a strong track record of providing the exact services you need.

And remember, just because you've got millions in the bank doesn't mean you shouldn't shop around. With all that money at stake you'd be a fool not to get a second opinion, or a third, forth, fifth and sixth opinion.

Go with your gut – find someone you connect with on a personal level, somebody you feel is professional and who has your best interests at heart, someone you are happy to entrust your millions to. Then work with them to start dotting all your I's and crossing your T's.

Winners Tip #7: Get Your Accounts In Order

Ten Tips For When You Win The Lottery

Two things you can't escape in this life, lottery or not, are death and taxes – so you'll need to get prepared. You are now wealthy and, as such, you now have an "estate".

So you'll also need to consult a financial professional as to how best to manage that estate.

You'll first want to discuss how to manage and, ultimately, eliminate your financial obligations, pay off your mortgage and so on. The name of the game is financial freedom. And you'll also want to ensure that your loved ones can enjoy those same freedoms after you're gone.

As for taxes, sure, you don't pay any tax on wins, but you will be taxed on any subsequent income – including interest earned and any return on investments you receive.

So make a list and be prepared to discuss all of these things; taxes, inheritance, funds for your children, such as a college fund and/or a trust. In other words it's time to start thinking like a rich person!

Winners Tip #8: Plan Your Nest Egg

Ten Tips For When You Win The Lottery

When it comes to planning your future age doesn't matter. Even if you've just turned 21 you should still be thinking about tomorrow, and how to live it happily and comfortably without ever digging deep into your fortune.

Again, it's time to start thinking like a rich person. Rich people don't spend money – not when they can invest it instead. Let this be at the core of your financial thinking from here on in. And, if you don't know where to start it's time to do your research.

That's not to say you need to become a financial guru, but you should at least familiarise yourself with the lingo. That way you'll know what your advisor is talking about so you can make decisions accordingly. Remember you're now in the position to invest in your future and the future of your loved ones – it's a rare gift that should not be squandered!

Winners Tip #9: Take A Break

Ten Tips For When You Win The Lottery

It's been quite a journey and by now you've probably talked to so many accountants, bankers and lawyers that your head is ready to explode. Good – you've done your homework and now you can go out to play.

Go! Take a break. Go somewhere you've always wanted to go but could never afford. Go lie on a beach someplace. Think, reflect, meditate and, above all, relax. This is what your life is all about now – once you've taken care of all the little details you can spend the rest of your life on easy street.

Winners Tip #10: Give Something Back

Always remember that the source of your wealth is, quite literally, the luck of the draw. So share that luck with others, particularly those who are in dire need of a change of fortune. Simply handing out money is not the answer, however. As with everything there's a right way and a wrong way to go about it.  

Always ensure that your generosity is on your terms – it's your money after all.

Having a financial advisor to help manage your money adds an additional layer of control which stops people from going and asking you for money directly. You'll need to be tough about it and insist all gifts and donations are handled "by the book". Otherwise it can be quite stressful and can also put a strain on relationships with family and friends.

Accountants and lawyers aren't easily sent on guilt trips. So let them be your first line of defence allowing you to gift and donate how you want, to who you want. They'll also be able to show you how you can use charitable donations to offset your tax payments via tax relief and can even assist in helping you set up and manage your own fund, trust or charity.

Remember: To Be A True Winner You Must Act Like One.

Rubbing shoulders with other millionaires can be an eye-opening experience. They already understand finance and investment principals in staggering detail and for them the high life is just their day to day life. 

To suddenly go from being a regular person to being super wealthy can be a turbulent experience. So look at it as a learning process and you will always ensure you come out a better person on the other end.

The most critical consideration having won the lottery is to always be in control of your money, rather than allow yourself to be controlled by it. Don't let your money change you. Instead allow your money to change your life, and the lives of others, for the better.

And always remember that you're still the same person you always were – except now you're much wealthier.

Fancy some life-changing jackpots? Here's this week's biggest:

MegaMillions – €261 million.

Next Draw: Wednesday 10th June

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EuroMillions – €110 million

Next Draw: Tuesday 9th June

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PowerBall - €45 million

Next Draw: Thursday 11th June

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