$390 Million Dollars – that’s the estimated Jackpot for Tuesday’s MegaMillions drawing.
The dollar amount got me thinking about all the people who’ve gone out of their way to purchase a lottery ticket.
If history is any indication, people will be buying ridiculous amounts of lottery tickets despite the fact that it won’t increase their likelihood of winning.
What have you done? Did you buy a ticket or two? Ten? One hundred, in the hopes you’ll hit it big?
How many hours have you spent daydreaming about winning the lottery? How many things have you purchased in your fantasies?
Lots of people are fantasising, and praying that winning the lottery will end their money troubles.
But if winning solves your money woes, why is it that 35% of lottery winners declare bankruptcy within 5 years of winning?
How To Handle Sudden Wealth
There are four reasons people lose all their money after hitting the lottery. These losses are often the result of poor financial planning, coupled with being emotionally unprepared to handle wealth.
People who have built wealth slowly have had time for their emotions and habits to catch up to their wealth.
With sudden wealth, this is not the case and the emotional fallout can be destructive.
Emotions come into play in many ways, with relatives, friends, investment ideas, or pleas for charitable donations.
In addition, it is often hard for people to handle how they should live when they suddenly find themselves rich.
If you are not emotionally grounded and don’t have a plan, the wealth will make your life difficult. The key to success is to recognize and deal with the emotions and properly plan your transition to being rich.
So what do you do if you find yourself suddenly rich beyond your wildest dreams?
Here are seven steps to manage sudden wealth:
1. Realize that you alone are responsible for your financial well-being.
Stay involved, read, and learn about financial matters. Don’t leave all the important decisions to someone else. You must be educated and understand fully all the risks, benefits and rewards of investing your money. Yes, you’ll have advisers but you are in the driver’s seat of your financial destiny, not the people you hire.
2. Step back and take time.
Take time to emotionally adjust and understand your new situation. Don’t start making purchases immediately. Give yourself some time to adjust to your new-found money.
3. Choose your path.
What do you want for your life? Who do you want to be? Before you start spending frantically, take time to figure out what kind of life you want now that you have all this cash. Again, take a step back and evaluate first before you start spending.
4. Figure out your financial position.
How much do you have? What are your current living expenses and what is your income? Is it enough to live on and do what you want to do?
5. Assemble a team of advisers.
Ask for referrals and interview as many people as you can; don’t just pick someone out of the phone book. You need to know that you can trust these people to help you accomplish your goals. Take time to ensure your financial future so you don’t end up like so many others who have been bankrupt in short time. You’ll need:
- Estate Lawyer
- Investment Manager
- CPA
- Money Coach
6. Create a financial plan.
Now that you have your team in place create a financial plan. Keep all members of the team involved and working together. Have joint meetings with team members to ensure there is no miscommunication regarding your money.
7. Implement your plan and enjoy your life.
You have the money; now’s the time to enjoy it responsibly.
If you come into sudden wealth, you don’t have to end up one of the 35% who end up bankrupt. With proper planning and the right emotional attitude, you can overcome the odds and enjoy your wealth for years to come.
Book a month long trip to Disney World, that’s what. If only….
Everything you said in this post is so important! I’ve never had the pleasure of winning any large amount of money before, but I have been very, very poor. If I ever won the lottery I know just how super careful I would need to be. I can see how people would just splurge repeatedly, but you really need to be careful.
Wow, I would love to win this and have the chance to use all your good tips 🙂
I think I would be very scared if I won, I think one of the first things I would do is take a holiday to try and plan away from everyone bustling at my door. x
I think that anyone that ever wins a high dollar lottery should be required to go to money management classes. I’ve read too much that shows people don’t know how to handle large sums of money.
I think it sounds a lot like the points for starting a business – and I suppose it really is – Nice problem to have, right? Thank you so much for you really great points to remember!!
I would definitely find some money advisors if I suddenly came into that kind of wealth. Otherwise, I wouldn’t know what to do with all of it!
I would love to win one day. I would secure my kids college studies. Those are awesome tips: having a plan is a must
It would be a huge adjustment having so much money. I would have to do a ton of planning, but it would be nice to splurge a little!
I wish. My oldest son and I were talking about this at the bank today. A couple not far away won $50 million. I couldn’t imagine…
I would love to win the $450 million PowerBall this week. The first thing that I would do is get a lawyer.
All great tips, I completely agree with you. Having said that, I would still love to win, I think most people would…LOL!
I have not bought a lottery ticket since I was like 21. I won like $50 with my first ticket when I turned 18. I think my lotto luck has run out 😛
I don’t play the lottery but maybe I need to start this week and the I will win and have the opportunity to use your tips, LOL. This is all great advice and I hope to some day be in the position to use these.
Wait what? I love the sound of that: you won the lottery! I am ready to spend and invest wisely if I do
Wow, what I would do with 450 million dollars; I’d be on a vacation ASAP!
It is nice to dream, huh!? I see it so many times on the news how people win and they wind up bankrupt because of bad spending decisions. I would pay off any debt, give to my church, help my family, make sound financial choices and travel!
I imagine at our age we’d just be doing a lot of investing to ensure the kids (and their families) were all left something when we go. Of course we’d move too… to a place with no icy driving in the winter, woot!! 🙂 I’m exciting just imagining. 😉
I would love to win the lotto and wouldn’t even mind sharing with another winner or two. But, in order to win you have to buy a ticket and we don’t buy them.
We talk about this often. We’d move somewhere warm and buy a beach house.
I’ve heard a lot of people that have had their lives ruined by winning a lot of money. It’s always important to manage your money appropriately, regardless of how much you have.
Oh we can all dream, right?! Would have a ball with that money.
I would be buying a house, first thing! Yup! lol
These are all awesome ideas. Now I just need go win the lottery.
I would probably save some and invest some – that’s what I’d do for sure.
If I ever won the lotto, I would totally meet with a financial adviser! I would have so many questions!
Oh! I bet we would have all kinds of good friends that we didn’t even know we had. The first thing I would do is find a better place to live. Just bare land so I could have a log home built on it. New truck for me & a new car for my wife. Give my daughter & her family some money. And put a large chunk in the savings account. I don’t trust investers with my money.