Picture this. It’s Friday evening and you’re having supper with your family while thinking of how to best spend the weekend. You check your lottery tickets online and against all odds, you discover you just won a huge jackpot worth millions of dollars.
How would you spend the weekend with your family? If your first thought is how you will splash money around, then you should know this - how you spend money in the first few days after winning a lottery can determine whether you’ll change or ruin your life.
A significant chunk of lottery winners become broke, get divorced or die within a few years of hitting the jackpot. It’s called the lottery curse, the last experience any lottery winner wants to go through. In light of that information, below are helpful tips to ensure you don’t ruin your life if you ever win the Lotto Max, Canada’s biggest jackpot.
Maintaining anonymity after winning the lottery can be difficult. Many jackpot winners eventually reveal themselves. Adlin Lewis, the winner of the biggest jackpot in Canada stayed anonymous for a while but he’s since come out.
All the same, discretion is your best chance of protecting your newly found wealth, your family and yourself. That means to avoid any sudden purchases, especially conspicuous items like a flashy car, a million-dollar home or jewellery.
Instead, consider continuing to working at your day job, even if it’s for a few months and limit the number of people who know about your financial windfall. This will buy you time to consult with financial advisors without altering unwanted publicity.
Find an Advisory Team
Many wealthy Canadians stay wealthy by making financial decisions with the help of professionals. After winning the jackpot, find a certified accountant, a financial planner and a lawyer who works in wealth management.
One reason to hire an advisory team is that it can help you absorb many of the pressures that come with being a jackpot winner. Think of taxes, requests for donations, frivolous lawsuits and potential break-ins.
Take your time before you pick an advisory team. You want to get the financial decision-making process right from the start. You don’t want to ruin your relationship with close family members and friends unnecessarily. And you also don’t want to waste your money.
An advisory team can help you create a solid investment plan. This way, your money will work for you and you’ll continue to grow your income rather than spend all of it.
Take Care of your Mental Health
Winning a jackpot doesn’t just invoke excitement and a lot of happiness. Some winners develop more negative experiences than positive ones. Take William Post III as an example. This Pennsylvania native won a jackpot worth $16.2 million and chose to claim small, annual payouts.
Unfortunately, his girlfriend sued him and won. But he couldn’t pay her because he’d already spent the first year’s $400,000 payout in two weeks. After that, he declared bankruptcy and his payouts were frozen. Then his brother hired a hitman to kill him to claim inheritance.
In the next decade, William became truly bankrupt and had nothing to his name. He died alone and with no money. William aside, there are a lot more cases of jackpot winners who experience depression, anxiety, betrayal and emotional challenges that could ruin you.
Pay off your Debts
According to Mark Cuban, the Dallas Mavericks’ owner and Shark Tank investor, paying your debts after winning a jackpot is better than rushing to make investments. In an interview with Dallas Morning News in 2016, Cuban famously advised lottery winners not to rush into investments.
Instead, one of your goals should be to pay off your debts. A dollar paid to clear debts is a dollar you no longer owed. Investing is great but do it after consulting the professionals. Timing the market often goes wrong, and that’s not what you want to happen after winning the lottery.