Those dreams of becoming an overnight billionaire are now in reach, thanks to the Mega Millions. The game’s jackpot has now ballooned to the biggest in the game’s history.
And while your chances are quite grim, what happens if you do win the lottery?
Your first moves should be to stop, think and plan.
In fact, Chris Bohlsen, director of investor services at TD Ameritrade, adds that while seven in 10 people admit to fantasizing about winning the lottery, a majority of them say they would either save it or invest it for their future.
“When we asked people what they would be most excited about winning the lottery, they’re much more excited about saving or investing than they are about quitting their jobs (21 percent and 9 percent, respectively),” Bohlsen says.
But like anything, there some common pitfalls that accompany winning all that cash.
When polled some of the biggest concerns people have were family and friends coming for money. Also the fear that winning would change them as a person. And lastly, choosing between a lump sum or regular payments.
But Bohlsen says there are other things winners should be mindful of.
Here are his most important suggestions if you win.
1. Stop and breathe – While experiencing a financial windfall may seem like a great “problem” to have, try not to act on your emotions. Avoid any impulses for the first couple of months, as acting on your emotions can lead to flawed thinking and potentially regretful financial decisions.
2. Protect the nest egg – It doesn’t take a business school degree to learn about personal finance and investing. Consider finding a trusted financial adviser to help you avoid the common financial pitfalls of sudden wealth. Go online to access free financial information and tools.
3. Keep eyes on the prize – Do some soul searching to figure out the best ways to use the newfound wealth. Is the goal to pay off debt, buy a new home or retire early? Think about the money in terms of how it can help you and your family achieve your goals and dreams. Make sure what you do is consistent with your vision for the money and that it aligns with your personal values.
4. Budget like a boss – The fundamentals of successful money management are the same for overnight millionaires as they are for those who build wealth the old-fashioned way. Stick to a budget and track expenses to see where the money is going. More money means budgeting and tracking expenses is more important than ever.
5. Pay it forward – Give a gift to future generations by protecting the financial windfall. Equipping family members to manage the wealth on their own starts by having open, ongoing discussions about money and financial responsibility. Determine upfront how you’ll handle requests for philanthropy and gifts to family and friends.