Many people dream about winning the lottery. But what if that dream becomes a reality and you win the jackpot? Having access to a large sum of money can be overwhelming for some people. For others, it can tempt them to spend their money on the wrong goods such as drugs or alcohol.
There have been lottery winners in the past that went bankrupt because they didn’t have anyone to guide them. To help first-time jackpot winners, I’ve created a list of ways you can spend your lottery winnings wisely.
These tips will help you retain your winnings and grow your money so you can still live a lavish lifestyle without going bankrupt. Keep reading to find out more.
1. Settle Old Debts
There are some people who can’t afford to buy valuable or large items. So they decide to take out loans or sign up for credit cards to buy the goods they need. Some people stay in debt for many years because they struggle to pay their accounts.
When you become a lottery jackpot winner it gives you the opportunity to settle all your debt. Paying off your accounts means that you can set up a more secure financial future. By settling your debt you will achieve full financial freedom!
2. Buy Property
There are financial experts such as Mark Cuban from Shark Tank that advises lottery winners not to invest their winnings because there is a risk of losing money. However, not all investments are risky if you make smart choices.
Buying property may be the best investment to make because you can earn passive income if you rent flats or houses out to other people. However, you should ensure that the property you buy isn’t in poor condition because you will have to spend money fixing it.
You could purchase a holiday home or create an Airbnb for travelers. Put whatever passive income you make into a savings account. Earning passive income from leasing property will support you in case you go bankrupt.
3. Purchase Important Assets
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Making smart investments is an excellent way to grow your money. But you should also consider purchasing assets that hold value. Assets are items that hold significant value and can also be considered an investment.
For example, some people may purchase gold coins which can be sold to make a profit at a later stage. Other assets include cars with high value that can also be sold to make your money back. Here are other examples of high-value assets:
When purchasing assets it’s important to spend your winnings wisely. You don’t want to overspend or hoard items. Make a few purchases but ensure the items hold a high value.
4. Support Your Family
Becoming a jackpot winner means you have the opportunity to help your family financially. Some lottery winners have children with massive student loans that they help pay off. Others have family members who live on the bare minimum and work long hours.
If you have family members who are struggling financially, consider helping them by:
- Paying off their debt
- Buying them property
- Purchasing items they may need
- Giving them a small portion of your winnings
Make sure that the family member you’re helping doesn’t have a drug or alcohol problem. Someone who has addictions can become worse when they have access to large sums of money. To prevent temptation you could simply buy them the items they need instead of giving them money.
5. Consider Donating to Charity
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Donating money to charities is a personal choice for jackpot winners. You can either open up your own charity or give to an existing one. There are many charity organizations that need help such as animal shelters, orphanages or rehab centers.
If you’re not comfortable with giving the charity money you can buy them the items they need. For example, you can buy blankets and food for animal shelters or you can buy toiletries and clothes for orphanages.
6. Travel The World
As a jackpot winner it’s important not to overspend but you should also have a chance to enjoy your money. Plane tickets and accommodation are expensive so not many people get to experience traveling around the world. Winning the jackpot means you can explore different countries which is an opportunity you don’t want to miss.
If you decide to travel, consider backpacking instead of living in lavish accommodations. Consider flying economy instead of first class to save on money. This will allow you to travel to more places without spending too much of your winnings.
Examples of Well-spend Lottery Winnings
There are many lottery winners who’ve had amazing success stories. Others have helped people who were close to losing everything. Here are some examples of well-spent lottery winnings.
Neal Wanless Gets to Keep His Ranch
Before Neal Wanless became a jackpot winner he was about to lose his ranch because he was behind on his property taxes. He was one of the poorest ranchers in his county. Then one day Neal decided to try his luck and spent $5 on five tickets. He’s lottery strategy was to use numbers from birthdays of important family members.
Fortune smiled on Neal and he won the biggest jackpot at the time. He got $88.5 million after taxes in 2009 and got to keep his ranch because he could now pay off his tax and fix the damages around his property and build onto it. However, recent reports show that he is finally selling his ranch.
John and Linda Kutey’s Honors Their Parents
John and Linda Kutey won their jackpot from an office lottery pool. With their winnings ($19 million after taxes), the couple wanted to honor their parents by doing something for their community. They visited their Green Island Village Hall to find out what they could do.
The community wanted to renovate the local park. They transformed the area into a spray park where children could spend the summer cooling off. John and Linda then used some of the money to buy a home and help more people.
Sheelah Ryan Leaves a Legacy Behind
Sheelah Ryan won $52 million which was the largest jackpot win at the time. Ryan said she felt that she won the lottery money for a reason which was to help others.
She opened her own charitable group to assist the underprivileged. Unfortunately Sheelah died from cancer six years after her win. However, the Ryan foundation lives on to help those in need.
Bonus: Some of the Worst Ways to Spend Your Lottery Money
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Having large sums of money can tempt people into spending their winnings in the worst possible way. This causes lottery winners to go bankrupt fairly quickly. Here are some examples of the worst ways to spend winnings.
Drugs and Alcohol
Some of the biggest lottery winners such as Michael Carrol spent years blowing money on drugs and alcohol. It’s the worst way to spend your lottery winnings because substances can damage your health and you will have nothing to show for the money you’ve spent.
If you do want to spend money on your lifestyle you should consider healthier alternatives. You could spend money on a personal trainer or purchasing healthier foods.
Large Assets that Can’t Be Maintained
There are lottery winners who will buy large yachts or mansions that they can’t maintain without spending more money. A 180 ft yacht can cost on average $4.75 million a year to maintain. What’s more, mansions need to be cleaned regularly which may require help. You may need to hire staff to maintain a mansion so that it doesn’t become cluttered and dirty.
Many female lottery winners such as Callie Rogers have spent thousands of dollars simply improving their looks. But it has been proven that plastic surgery can be addictive and harmful and it can be extremely expensive. This is especially true if the surgery is botched and needs to be fixed.
Don’t think that winning the lottery has somehow given you the ability to win money all the time. You can try various lottery strategies to win but it’s not always the same at casinos. Gambling is a quick way for lottery winners to lose all their money in a short space of time. Putting large sums of money on high stakes is never a good idea.
If you do want to spend money on recreational activities then take part in something that’s relaxing and develops a skill such as golf.
How To Manage And Protect Your Wealth?
Winning the jackpot can be an exciting time but it can also be overwhelming. You may not know how to protect and manage your wealth correctly. To assist you, here is a list of tips to help you manage and protect your finances:
- Remain anonymous: It can be tempting to tell everyone that you’ve won the jackpot. But sometimes this can attract unwanted attention. Try to remain anonymous when you become a winner.
- Annuity or lump sum: Some lotteries will allow you to take out the full amount which is the lump sum option. Or you can choose an annuity which allows you to get paid over the course of 30 years. Annuity is usually best for those who want to manage their finances more effectively.
- Hire a financial advisor: You may struggle to manage your wealth correctly so you’ll need expert guidance from a financial advisor. Consider hiring one to help you make better financial decisions.
- Hire an accountant: When dealing with large sums of money it can be difficult to pay taxes or keep track of your spending. Consider hiring an accountant to help you keep track of your finances and handle your taxes.
Winning the lottery doesn’t mean you have to be extremely strict with your spending. You can still enjoy your winnings but at the same time you can make better financial decisions. Use the tips in the article I’ve written so that you don’t experience the pain of going bankrupt. Grow and save your money for a financially free future.