What would you do if you won $800 million in the lottery? It’s a fun question to ask yourself because instantly you begin fantasizing of what you want and can do. But what is that you should do?
It turns out, there is a right and wrong way to win the lottery.
The question of what you should do if you win millions in the lottery was asked on Reddit. One of the best and most detailed answers came from Redditor BlakeClass about one year ago and is backed by the analysis (and unfortunate history) of past lottery winners.
He begins with one very wise word for what you should do:
“This is the absolutely most important thing you can do right away: NOTHING.
DO NOT DECLARE YOURSELF THE WINNER yet.
Do NOT tell anyone. The urge is going to be nearly irresistible. Resist it. Trust me.”
BlakeClass then goes into a step by step description of what your next moves should be.
Step 1: Immediately retain an attorney.
Find a large, national level firm and insist that a partner who’s been with the firm for a long time handles your case. Do not let them pass you off to a junior partner or associate. Do not use a local attorney. Do not use an attorney that has had any past connection to you or your family. You want the least amount of conflict of interest possible.
Step 2: Decide to take the lump sum.
If you win, you get a choice between monthly payments or you can just take a lump sum. You might save a little more money with payments, but you won’t have quick access to cash. Assuming you don’t have an addictive personality or raging gambling habits, you don’t need the state managing your allowance like you’re a child.
Step 3: Decide how much you want to give to your family and/or friends.
You shouldn’t be giving your family and friends more than 20% of your money. Pick a percentage or number and tell your lawyer. Never change it. Don’t consult your family for how much money they think you should give them. Don’t ever give anyone straight cash and don’t buy them houses or cars — once you start, you can’t stop without there being terrible repercussions. Your attorney will set up trusts in the amount you specified, end of story.
Step 4: Don’t hire an investment manager.
When word gets out that you have an incredible amount of money, investors of all types, legitimate and illegitimate, will approach you like sharks that smell blood. It doesn’t matter if they are recommended by family or not. Learn to say no. Never sign anything.
If you really want to invest in stocks, for example, go for an index fund, but odds are that any other investment opportunities will require lots of time and research, and no investment manager will be able to set you up with opportunities from the get go. You should figure this out before you even claim your money.
From there, BlakeClass elaborates on various investment plans and scenarios of what can happen to any winner. It’s highly encouraged that you give his full answer a read so you can arm yourself with knowledge.
And for those of you holding on to a lottery ticket for the next draw, may the odds be ever in your favor.