9. Don’t become a banker and business backer for everyone!
Leave the venture capital and merchant banking world to venture capitalists and merchant bankers. One way too common theme that has ruined lottery winners with instant vast sums of cash is that friends and family start pitching them on endless business ideas. Sure, some will sound great and some will sound crazy. Other friends and family members may expect you to become their own overdraft source of funds. Avoid this at all costs.
If someone has no knowledge of a particular business and does not know what it takes to actually run a business, will that person do better because a lottery winner who lucked into vast wealth provided money to start it? If your answer is yes, you seriously need to protect yourself — from yourself.
Now think about whether most lottery winners had the understanding of how to run a business the day before they won the lottery.
10. Don’t just give it all away!
Some lottery winners might feel so lucky that they want to give away just about all their money to a charity or to a religious institution. This may sound great on the surface, but even the truly wealthy who earn their money the hard way do not do this in the manner you might think. You can be more than generous without doing the unthinkable of giving away the whole treasure trove. Imagine what you will feel like down the road if or when a serious crisis arises in your life or your family’s lives and you no longer have the finances to help.
Should you be charitable? Absolutely! Should you give it all away just because a church or a charitable group does good things? Absolutely not. If you insist on giving away your new-found fortune, do it the way the wealthy do it. They generally structure their wills or trusts to give away that fortune upon death.
11. Don’t get celebrity and athlete envy.
Being a high-roller is one thing, but you can go incredibly broke trying to keep up with celebrities. Keeping up with the Jonses is bad enough, but do not try to keep up with the Kardashians and their like. It may seem cool to own a 200-foot yacht or private jet, or to have your own entourage. It may also seem cool to own castles in Europe or Picasso paintings. These can easily drain your financial statement to zero. Trying to dodge taxes might even sound appealing to misguided people. Now go add up the price tags of these things, plus the cool cars and houses and the rest of it. You can go broke very quickly. Just ask the endless movie stars, athletes, musicians and people who come into vast sums overnight.
Many famous people have had it all, only to end up broke. And thinking you can dodge your taxes like so many famous people have done is another recipe for disaster, one that may come with a greater price than just mere penalties.
12. Don’t think that laws and decency no longer apply.
It is true that the wealthier you get, the better attorneys and legal defense you can afford. Still, you will have to live under the “good citizen” laws, and you still likely will have to pay taxes just like Warren Buffett’s secretary. Living a reckless life without concerns about the laws of the land will not keep you from going to prison (or worse). Most good sports coaches will tell their star athletes upfront that chances are high they will have to be human for far longer than they will be stars.
Movies can glamorize scoundrels, but what good does it do you if you are incredibly wealthy and such a pariah that no one will associate with you? Remember, you don’t get to take any of your wealth with you when you die. And how fun will it be to be paying out all of your winnings to attorneys fighting to keep you out of jail or fighting civil suits looking to take your new wealth away?
Again, 24/7 Wall St. would not want anyone who wins the lottery to end up without a penny to their name (or worse). Remember this adage: You should only have to get rich once! Following a list of things to do or not do sounds easy enough. Unfortunately, life’s temptations can get in the way of logic.