Let’s be real, you’re more likely to win an Oscar, be hit by part of a plane falling to Earth or be struck by lightning than you are to win the Powerball $150 million lottery.
And, you’re pretty much guaranteed to lose the amount of money you spent on the ticket.
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But, let’s imagine that you do beat those awesome odds and actually take home the $150 million jackpot in Thursday’s Powerball. With that staggering amount of money, it’s important that you know what to do with it.
“Winning the lottery can change your life in a single moment but unfortunately it doesn’t mean the end of life’s financial challenges. A sudden windfall brings with it a whole host of financial implications you may not have thought about,” said AMP financial adviser Andrew Heaven.
“Managing a large lump sum of money can be a daunting task. It pays to take a strategic, long-term and sustainable view of how to spend and invest it so that you can live the life you want and make the money last as long as possible, if not forever.”
It’s also important to have a plan as winning the lottery doesn’t always mean you’ll be happier.
That’s because people very quickly get used to pleasurable things, like making a massive sum of money and then the happiness wears off.
But even if the happiness wears off, there are ways to make sure you don’t burn through the money too quickly.
Here’s how to make the most of your lotto win
Don’t spend anything
Fight the urge to splurge. That yacht is tempting, but you’ve got to remember that it’s easier to lose that money than it is to win it.
Heaven suggests you buy yourself a small treat but then take a break from spending so you have time to get used to your winnings, and think about what you’re going to do with it.
“A 2011 paper found that people who won mid-sized prizes in the Florida lottery were more likely to file for bankruptcy than small lottery winners,” senior lecturer at Boston University Jay L. Zagorsky added in a piece for The Conversation.
“The data suggest it takes time and experience to radically adjust to a different lifestyle.”
Set those goals
Now it’s time to consider what you want to do with the money and how it might help you achieve life goals. This could be opening a business, travelling, writing a book, giving to charity or helping out your friends and family.
It’s also good to have some goals set for when people find out about your lucky numbers and start asking for help.
Get some advice
Just because you’ve won millions doesn’t mean you know what to do with it. That’s why it’s a good idea to seek some professional advice from an accountant, financial adviser and lawyer. They’ll help you meet your goals and also keep your money safe.
Pay off bad debts
While Heaven suggests not splurging, there is an exception: bad debt. Now’s the time to consider whether you want to pay off your mortgage, your credit card or your HECS debt.
Set a budget
Even millionaires have budgets. Setting up a guideline around how much you earn, have, and will spend will ensure you don’t suddenly run out of money - or worse, end up with less money than you did before.
Consider stopping gambling
Remember - the odds still aren’t in your favour if you decide to keep gambling.
“According to the Australian Gambling Research Centre and the Australian Government's Institute of Family Studies, regular lottery participants spend an average of $695 annually on tickets,” Heaven said.
“You should consider whether there are other, more realistic ways you could use this money to try to get rich. Putting these funds into a savings account, your superannuation account or investing it will almost certainly have a more positive outcome on your finances than taking a chance on the miniscule odds of winning the lottery.”
Yahoo Finance’s All Markets Summit is on the 26th of September 2019 at the Shangri-La, Sydney. Check out the full line-up of speakers and agenda for this groundbreaking event here.