1. Do not forget to sign the winning ticket (nor forget to report it).
This may sound silly, but it’s serious. Does it seem impossible to think that some people might not sign a winning lottery ticket? Or what about not reporting that they won? Imagine if you have the winning ticket and it gets lost or stolen — or burns up in a house fire! Endless millions of lottery dollars have gone unclaimed from lottery winners over the years. One of the recent lottery winners took weeks and weeks to report that they were the winners (reportedly to get their lives and plans in order).
Some people somehow manage to not report to the state that they won. Now imagine how you would feel if you lost a winning lottery ticket. Or what about if someone else takes your winning ticket and then shows up to collect the prize? Fighting over a winning lottery ticket is no simple task and disputes have arisen over who owns what ticket.
In a way, lottery tickets have effectively become the last form of bearer bonds that anyone can collect on if they show up with the coupons and bonds. You have to sign and secure that ticket, and you then have to report to the state.
2. Do not dare go brag about winning the lotto!
If you just won tens of millions of dollars or hundreds of millions of dollars, it seems logical that one of the first impulses would probably be to go tell everyone you know. After all, how could you not want to tell your friends and family? Do not do this! Keep as quiet as you can. Your friends or family members probably cannot be trusted to keep your life-changing secret a secret.
Telling everyone you know before you collect your winning can put you in danger, and in more ways than just one. Everyone who has ever done anything for you now may come with their hands out asking for something. You may even become a target.
You may have heard of kidnap and ransom insurance before. It is also sad to report that some lottery winners became murder victims, and for far less than the massive empire-building jackpots. If you can manage it, and if your state allows it, try to remain anonymous for as long as possible. How you became vastly wealthy will be found out in time anyway, but there is no need to hurry that along and jeopardizing yourself.
3. Do not automatically take the lump sum cash option without consideration.
Most winners are going to choose a lump sum payment. If you can take millions spread out over 20 years, or take millions all now – most people go for the short-term boost. It is important to consider that the media’s most commonly used figure is that close to 70% of lottery winners end up broke again. Some of the newly rich even manage to go broke within just a couple or a few years. Let’s say that you can choose to get $270 million in a lump sum payment, do you know for sure without consideration that is a better choice than receiving a payout of $361 million slowly over the course of a lifetime. Again most people choose the lump sum rather than the annuity payment as it is instant empire-making money.
Go see a reputable and visible tax professional and a reputable investment advisor at a top money management firm with a widely recognized company name and a long corporate history. This theme of “reputable and visible” will echo throughout. Do this before you automatically make the decision about a lump-sum or annuity option.
4. Do not think you are suddenly the smartest person about high finance.
Whether this is fair or unfair, most people know very little about the world of high finance. Lottery winners and other people who become filthy rich overnight need to line up immediate outside financial advice. Not next week or next month — now! If you have been living paycheck to paycheck before the lottery, does it seem possible that you now suddenly know the best things to invest in? How likely is it that you will immediately know the best tax and asset protection strategies?
There are many ways to invest and to protect that new fortune. Strategies of the extremely wealthy often go way beyond just buying stocks and bonds and letting those investments ride. As far as who to use, or who not to use, chances are very high that your drinking buddy might not be the best choice as an advisor and expert.
Having a solid and respectable team of financial advisors and managers from reputable firms will act as your buffer to protect your assets now and in the future. Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated? Here is a very real hint: If you answered yes, you probably did not bother playing the lottery.