I’ll jump right into it: winning the lottery means that your life has changed. Of course, you may be thinking about flashy cars, expensive vacations, luxury clothes, and private jets, but the reality is that your life is going to change because the people around you are going to change.
Sorry, but it’s the truth.
Bezinga.com posted a story about the people who struck it rich then lost it all. And sure, we all like to scoff and say that we would “do it differently”, but the truth is that those people who wound up worse than they left off were just regular people like you and me.
So, you’ve just been awarded millions of dollars from winning the lottery. Congratulations! Now what?
1.) Call a Lawyer. Right Fucking Now.
Seriously, do it now. Like, close this site, go to a quiet room or to your vehicle where no one can hear you, and call a lawyer right fuckin’ now.
You may be tempted to call a lawyer you know and trust, the same lawyer who you used to get out of your DUI or who drew up your grandmothers will. Don’t do it. In fact, you don’t want to call any lawyer who even knows you exist.
When choosing a lawyer, make sure you go to a large, well known, and well established firm and speak with a senior partner. Associates are newer to the game and they do great work, but this is not something you want to fuck up. Make sure you get the pros, and don’t take no for an answer (or, go somewhere else).
2.) Keep Your Mouth Shut
Do not tell anybody that you have one. Not your parents, not your siblings, not your partner, not your friends. No one.
I know this sounds coldhearted and greedy, but people change when they know you have lots of money. Seeing how a loved one changes when it comes to money can really break your heart, trust me. If you want to keep your friends and family in your life without any nasty changes to their attitudes towards you, you’ll keep this secret to yourself for now.
Don’t worry, you’ll eventually be able to tell them, just be patient.
Also, for many countries you don’t have to cash in the ticket right away. You might be able to take some time for yourself and process your emotions.
3.) Spread The Love
One of the final rules of wealth is to share what you have with others. Some people donate to charity, or start a foundation or scholarship, or give to friends and family. There is no sense in hoarding money that you don’t need, so sharing it makes rational sense.
Remember, at this point, you are still keeping to Rule #2, Keeping Your Mouth Shut. Don’t tell anyone that they will be getting money, or they will start to envision suitcases full of cash that they can blow through.
Instead, decide how much you are going to donate and stick to that number. Tell your lawyer how much you are going to be giving away and what your goals are. Maybe you want to make sure your mom can live in luxury for the rest of her life, or you want to secure great university education for your niece. These goals will help you decide on how much to give away, and the methods of accomplishing just that.
Many good lawyers may suggest setting up a trust fund; an account that holds money on someone else’s behalf using a third party. The third party, called a trustee, manages the fund and can pay out distributions to the recipient.
4.) Buy Assets That Are Low and Slow
Government bonds are some of the safest assets out there, and can be almost guaranteed to pay out unless the zombie apocalypse strikes (keep in mind that nothing is risk free; remember the Greek government bond default in 2010?). Find something that pays out a decent yield and lock your money in.
Let’s imagine that a 10 year US Treasury bond yields 1.5%. That isn’t a lot, but if you have a cool $30 million sitting in the bank, 1.5% means you’re earning $450,000 a year by doing nothing. Adjust the money and yield accordingly to your situation.
If you are like me and absolutely MUST invest in something, invest in an index fund; something low and slow. An index fund isn’t terribly sexy or flashy and won’t win you any attention at dinner parties, but they are smart… and you need to be smart. Find something with a low management expense ratio (MER). Just because you’re rich doesn’t mean you can be foolish.
Mark Cuban says that winning the lottery doesn’t make you a smarter investor. If you were going to lose $100 in bad investments, you can lose $100 million the same way.
5.) The Investment Manager Problem
After winning the lottery, you will likely be encouraged to hire an investment manager, but this is inadvisable. By charging a percentage of the total value of your portfolio, investment managers can make a considerable amount of money in exchange for earning you more money.
But here’s the thing: you don’t need any more money.
6.) Go Nuts
Welp, you’ve got your guaranteed income, your friends and family are taken care of via a responsible trust, and hopefully your chunk of money is still growing by a little bit each year. Now what?
Go nuts. Enjoy yourself. Buy stuff, travel the world, light the money on fire. Whatever.
Now you can enjoy your money with the flashy cars and the private jets to Maui because even if you blow through all of it (which, you might), you’ve protected yourself against your biggest enemy: you.
7.) Have Confidence
People are going to start acting differently around you after winning the lottery. Friends, family, co-workers, professionals, everyone. Get ready for it, and start getting used to saying “no”.
An investment manager insists that you hire their services when you dont want to? Say no.
A friend is upset that you won’t give them cash to start their keto pancake company? Tough shit.
Be polite, be firm, and if they aren’t getting the picture, tell them to go fuck themselves. It’s not illegal, and they certainly aren’t respecting you by taking the hint.
The military has taught me that – most times – nothing bad will happen when you stand up for yourself. And for the times that bad things have happened? Well, fist fights build character!