Imagine becoming vastly wealthy overnight. Being a winner of a multimillion dollar lottery has to be incredible. It certainly is going to be a life-changing event for almost every single lottery winner. But what about when the prize is an astronomical sum of $100 million, $200 million or $300 million? If you happen to be lucky enough to win a lottery, please avoid some of the simple mistakes, and complex mistakes, that have taken other lottery winners into bankruptcy.
Imagine being Joe Somebody and turning into Sir Joe the Magnificent overnight. Now imagine the unthinkable that Sir Joe could become Joe the Village Idiot in a very short time. Supposedly most lottery winners end up broke again. That just doesn't seem right at all.
24/7 Wall St. has decided to offer up 12 key things not to do if you are a lottery winner. We have looked around at many research papers and other articles on the matter about those who land in instant riches against all odds. It seems too cruel to imagine that many winners become losers. There is a saying that you should only have to get rich once. Some people just cannot help themselves in avoiding the pitfalls of instant wealth.
While many lists exist on what you should do if you win, it is surprising how few actual warnings are out there that can be used a scare-tactic guide that makes lottery winners do the right thing. Did you know that you might become a target if you are a lotto winner? Some people find instant enemies, and some people turn out to be their own worst enemy. It might have been very hard to spend $30 million in 30 days in "Brewster's Millions" during the mid-1980s, but that could be done easily and perhaps just in a single day now.
Some points may overlap or seem redundant, but there are many pitfalls which snag lottery winners or those who find themselves incredibly wealthy in a very short period.
Here are 12 things not to do if you win the lottery:
- Forget to sign a ticket or report it to the state. After doing some research, we find this is apparently the simplest and easiest error to make. Can you imagine losing a lottery ticket? Then imagine what can happen if someone else snags your ticket and shows up to collect the prize. Fighting over this is no simple task. In a way, lottery tickets are the last form of bearer bonds that anyone collect on if they show up with the coupons and bonds.
- Tell everyone you know. If you win this much money, chances are high that you will to want to brag about it. How could you not? The problem is that telling everyone you know before you collect puts you in danger, and in more ways that just one. Everyone who has ever done anything for you now may come with their hands out asking for something, or worse. You probably have heard of kidnap and ransom insurance before. One recent lottery winner even became the victim of what appears to be murder. If you can manage it, and if your state allows it, try to remain anonymous for as long as humanly possible. How you became vastly wealthy will be found out in time anyway, but there is no need to hurry that along.
- Automatically decide to take the up-front cash. Supposedly some 70% of lottery winners end up broke again, many within a couple or few years. If you get $172 million up front, it may sound better than having to receive a payout of $300 million slowly over the course of a lifetime. After all, it is instant empire-making money. Go see a tax pro and a legitimate investment advisor at a top money management firm, a theme you will see here throughout, before you automatically make this decision about a lump-sum or annuity option.
- Think that you are the smartest person to manage your money and finances. If you go from living paycheck to paycheck, does it sound right that you will know the best things to invest in and the best tax and asset protection strategies? Your drinking buddy might not be the best choice either. Having a solid and respectable team in place will act as your buffer that protects your assets now and in the future. Do you know how to protect your assets against all threats and know exactly how to protect your estate in case you die or become incapacitated? If you answered yes, you probably did not bother playing the lottery.
- Let your debts remain in place. If you get the "I'm rich and don't have to pay anymore" bug, you might be dooming yourself. Whether you take the lump-sum or the annuity option, if you have a single penny of debt in the immediate future and distant future, then something is seriously wrong. For that matter, you should not have a single debt ever again. If you manage to go broke down the road and still have a mortgage, car payments, student loans, credit card debt and personal bills, all of your friends and family members should get to spank or ridicule you every day for the rest of your life.
- Become the generous high-roller, living the life. If you go from living a simple life to instantly being able to spend hundreds of thousands of dollars (or more) per week, what do you think happens to your expectations in life ahead? Chances are high that you will want more of the same. If you start gambling in Las Vegas and are not happy until you are gambling with hundreds of thousands of dollars (or more) per play, you are dooming yourself. Wait until the real con men find you. Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast.
- Buy everything for everyone, or even for yourself. Do not go out and buy dozens of cars, followed by houses and whatever else, for you and your friends and family members. This will start you on a bad path, and you could easily become the next friends and family personal welfare department. If you start buying everything for everyone, chances are high that they might expect that to last forever. You do not have to be a cheapskate, but after hearing a personal story of someone buying more than 30 cars and multiple houses in three months it is just crazy.
- Say to hell with a budget. Maybe it sounds crazy that you have to live within means when you get empire-making money. After all, you are now wealthier than everyone you know combined. This also goes back to having advisors and being prudent, but at the end of the day you do still have a finite sum of money. Chances are very high that you will make some serious purchases and your lifestyle will be changed forever. Without setting limits for yourself and for what you do with others is a recipe for disaster. Again, most lottery winners go broke.
- Become the business backer for all your friends and family. One common theme that has come up with lottery winners (and judgment winners) who suddenly get vast sums of cash is that their friends and family start pitching them on endless business ideas. Sure, some will sound great and some will sound crazy. If someone has no knowledge of a particular business and does not know what it takes to actually run a business, will they do better because a lottery winner who lucked into vast wealth gave them money to start it? If your answer is yes, you seriously need to protect yourself (from yourself).
- Give away the whole enchilada. This is probably not the case for the vast majority of lottery players, but some people might want to give away just about all of their money to a charity or to their religious institution. You can be generous without doing the unthinkable. Imagine what you will feel like down the road when a serious crisis arises in your life or your family's life, knowing that you no longer had the means to change it. Should you be charitable? Absolutely! Should you give it all away? Absolutely not!
- Get celebrity and athlete envy. Keeping up with the Jonses is bad enough, but definitely do not try to keep up with the Kardashians or other celebrities. It may seem cool to own a 200-foot yacht. It may seem practical that certain celebrities have an entourage, or to have a film crew following you around. It may seem cool owning castles in Europe. Owning an original Picasso painting sure sounds impressive. Having a big new private jet makes sense for a lot of people. Trying to dodge taxes might even sound appealing to misguided people. Now go add up the price tags of these things, plus the cool cars and houses and the rest of it. You can go broke real quick. Just ask people like Nicolas Cage, Wesley Snipes, MC Hammer, Evander Holyfield and many other famous people who had it all and ended up broke how they feel about things.
- Think that laws and decency standards no longer apply. It is true that the wealthier you get, the better attorneys and legal defense you can afford. That being said, living a reckless life without concerns about the laws of the land will not keep you from going to prison (or worse). Movies often glamorize scoundrels, but what good does it do you if you are incredibly wealthy and such a pariah that no one will associate with you? Remember, you don't get to take any of it with you.
Good points I think they covered everything, I cant think of anything to add to that list. Great info
i gonna write some these thangs down
Your drinking buddy might not be the best choice either.
what an amazing article,this one of the article worth paying a platinum member fees for 1 month,because it could safe you $ 640 million jackpot! that you will win !
Todd should safe this article under the platinum members features and give me one month free subscription for platinum membership for suggesting this! or what do other members suggest? is this article worth paying for it?
Its your money, and you can spend it anyway you want. If you go broke, then you can wallow in despair, and have nobody to blame, because you did all by yourself. Better to squander your money, than have somebody else do it for you. There are lots of people out there, who are willing to do it for you. Different strokes for different folks.
I'd like the opportunity to test these out. Please. Thank you.
"wallow in despair" is a state of mind..... Anyone can do it.
Very good points thanks for the info Todd
This whole story is just plain stupid. Take number one for example that says lottery tickets are barer instruments.... WRONG. If the lottery's even get a sniff that the person presenting it is not the purchaser of the ticket they waltz it through the (state) court system to see who the "rightful owner" is.
Same here Mrs. P
Let's win one of these Jackpots
Well, you're wrong. Lottery tickets are bearer instruments. If someone were to obtain a lottery ticket illegally, like through theft, and that theft could be proven, then most certainly the person could be arrested and they would not be paid the jackpot. But that's because theft is a crime, and has absolutely nothing to do with the fact that lottery tickets are bearer instruments, which they are.
I would keep 5 million and give the rest to the 'Make a Wish' foundation. Get the 5 million in annual payments deposited in my checking account. I have no one but me so this would work just fine.
So if someone finds a winning ticket (as mentioned in the article) they can walk in to the lottery office and say "I found this winning ticket" and the lottery will cash it no questioned asked? I don't think so.
No disrespect intended, but I think they "barer instruments" only in a technical sense.
By admitting they found it, they are admitting it doesn't belong to them and they are simply turning it in. The only thing a person doing that can expect is a reward from the owner of the ticket.
Ok, I see your point. I will be sure NOT to say that I found it when I go to collect the winning jackpot ticket that I find. I was mislead by the words "anyone (can) collect on" that I read in the story.
mislead by the words
sign you ticket!
IMA find one that is a big winner and sign someone else's ticket with my name.
you just broke 2 of the 12 things not to do
Tell everyone you know then you should Buy everything for everyone.
When I went to fill out the paperwork at the Texas Lottery yesterday, they had a space on the form you can check off if you actually found the ticket!
Somehow I'm not surprised. One can only wonder what sort of crime you might commit if you find a winning ticket and DON'T check the box stating that you did if fact find the ticket?
When is one of the real jackpot winners going to tell us "what not to do" and maybe outline the process of validating a ticket?
Because of the Hot Lotto problem Iowa had, we know for fact that states requires the winner to verify they bought the ticket or have the person that did buy the ticket come forward and explain the circumstances. If anyone can collect, why wasn't Crawford Shaw, the 77-year-old lawyer from Bedford, New York paid the Hot Lotto jackpot?.
My understanding is that he was supposed to prove the ticket was purchased "legally" in order for the "barer instrument" to be honored by the state.
Bearer instrument is actually a misnomer. It almost sounds like finders keepers. YOU can purchase a winning ticket, and some fool calls the lottery ahead of time, and claims they had the ticket and lost it. The lottery will make you jump through hoops just to collect your money. Maybe we should all start wearing GO-PROS when we go to purchase our tickets.
Most lotteries have the claim forms readily available for you to download and see first hand for yourself, or you can go to the office and pick one up.
Its unfortunate that nobody, even talks about taking the annuity, instead of the lump sum anymore. If you are young, and the jackpot is large enough, taking the annuity route might actually be a wise choice. At least you have 26-30 years, before you actually go broke. Most people outgrow their stupidity within the first five years. Better than paying some SUIT AND TIE, you don't know, thousands of dollars to manage your money. Hmm maybe I should take the annuity and use my drinking buddies. To each his own.
Apparently there is still an ongoing criminal investigation. I will forward the story I found to Todd.
Maybe you should get "I want cash now" on speed dial before even get to the lottery office?
Yes you can do that, if you like the words:- probable cause, suspect, detained, interrogation, criminal, disrespect and not to mention, unnecessary publicity and if you are really lucky, a trip to jail. I "found" it , in some quarters actually means, I"stole" it.
Ronnie, you are misconstruing what was said by Todd and others. The lottery ticket is a bearer instrument since it contains no ownership information upon purchase (unlike regular securities like stocks, etc, which are registered upon purchase with your name, etc.) and by having this instrument you are presumed to be the owner. I think common sense tells us all that anything financial has to be validated but in the case of bearer instruments, it is done after the fact, not when you purchase it.
I really hope you secure legal advice if you ever win a jackpot. Your take on things would end up going viral on the internet. And bearer instruments are NOT a technicality. They are legally recognized in the Uniform Commerical Code in all states.
Thanks for the unsolicited advice Artist77 But Im not the one who wrote an article that says anyone who holds a winning ticket can show up and cash it in. Perhaps you should be chastising the writer of the article concerning his understanding of a "barer instrument"?
"In a way, lottery tickets are the last form of bearer bonds that anyone collect on if they show up with the coupons and bonds."
And by the way, no I wont be securing "legal advise" no matter how large a jackpot I win. Thanks.
Are you suggesting that I should be the purrrr-fectionist that you are Artist77 ? Let no think about it.....
No thanks.
lol Yes, why thank you very much. I know hard work and discipline is not your thing.
Thats funny because the last time I checked being in control of everything and being a perfectionist has nothing to do with hard work or discipline. I could have missed my guess about you, but unless you work and manage a farm Im giving good odds that I can do more work before lunch time than you do in a month. lol.
I've always wondered about this... they say "you" should sign the ticket right away... what if you formed a blind trust or LLC (not sure if I''ve got the terminology right).
But anyway... the intent would be to not broadcast yourself as the winner (anonymity).
Shouldn't the name of the trust be on ticket vs "your name" in that case? Probably mixing a bunch of stuff up here.
Always sign your lottery ticket as soon as you buy it!!
some people work harder some people work smarter
Automatically decide to take the up-front cash.
Supposedly some 70% of lottery winners end up broke again, many within a couple or few years.
If you get $172 million up front, it may sound better than having to receive a payout of $300 million slowly over the course of a lifetime.
After all, it is instant empire-making money.
Go see a tax pro and a legitimate investment advisor at a top money management firm, a theme you will see here throughout, before you automatically make this decision about a lump-sum or annuity option.
don't you think that is why 70% of them winners end up broke because they take the money upfront?
Yet you are the one who posts all day long and I do not since I have a career. You seem to have real issues with women, especially ones who have education and expertise beyond your understanding. I recall how insulting you were to Jill. I also recall the comment about women becoming realtors since only a HS education is needed. My money is on you having a GED at best and an occasional visit to unclog a toilet between posting all day is hardly work. But I think you assume any white collar work is not work. That says it all. You resent the "establishment" who you believe is holding you down.
All you do in the past 6 months is increasingly attack and pick fights with LP people and post idiotic icons over and over. You say things just to see if you can start an argument. It is old. I waited a long time before saying anything. Whatever you are so angry about, I hope you get some counseling. But again, your counselor may be a woman.
Since the hot topic is about bearer instruments, allow me to chime in. There was a story in LP and other media about a guy in BlackStone, MA who tossed a winning ticket in the store trash can. Some other guy who used to go through the trash can of that store was lucky that day. He found the winning ticket and went to claim the $1M. The person who bought the ticket sued and they settled out of court. Would lawyers of the one who found the ticket in the trash can "advice" him to settle if the lottery ticket is indeed a bearer instrument? There has to be more to this bearer instrument thing.
https://www.lotterypost.com/news/121412
OUCH!!! That hurts. Is the truth supposed to hurt, or is it just a matter of opinion, or an astute objective observation?
It's just a fleeting illusion.
True, but the small print at the bottom of form tells a slightly different story. The signer must declare under the penalty of perjury that no other party is entitled to any part of the payment. State lotteries have different rules and security methods and the News Forum is full of stories about winners who didn't buy the ticket and declared "that no other party is entitled to any part of the payment". Wouldn't it be common sense to ask a jackpot winner if they purchased the ticket and if not how they got it?
If validating a $9 million jackpot prize was as easy as signing their name and address on the back of the ticket, taking the ticket to any lottery retailer to validate it, downloading and filling out the form, signing it, mailing it to lottery headquarters, and simply waiting two or three weeks for the check to arrieve, why didn't Andy Ashkar do it?
Before Andy had the chance for a really big score, he probably was a "ten percenter" based on his story he paid Miles $4000 in cash for $5000 winning ticket. Andy's store never cashed any $5000 winning tickets for that game and probably why he is in prison.
Tracy Williams did purchase the ticket with the winning jackpot numbers, but her co-workers said they were entitled to part of the payment and filed a law suit. If the ticket is a true bearer instrument legally belonging the bearer of the ticket, why did the judge even hear that case?
A real jackpot winner could tells us whether or not they were asked if they purchased ticket so we wouldn't have to just guess if because the ticket is bearer instrument, the lottery will pay the prize money to the bearer regardless even if they found it in the trash.
I always saw a lotto ticket as currency. Like real money, if no one claims it in time you should get it.
"Its unfortunate that nobody, even talks about taking the annuity, instead of the lump sum anymore."
But many members talk about getting a team of financial advisers. Do you really think any financial adviser would tell their client to take the annuity?
"Most people outgrow their stupidity within the first five years."
Are there any stipulations on the claim forms of how any jackpot winner spends their winnings?
Did an actual jackpot winner ask for your advice or do you just know what is best for everyone on how everybody should live their lives and spend their money?
To each his own.
If you're talking your jackpot winning experience, no problem.
The bourbon is slowly begining to kick in. If you have any legitimate questions, take a trip to the lottery office, and they will gladly accomodate you. Have a good night Madam.
12 things I will do with my lottery ticket/winnings
1.) Sign the back of my ticket once I find out I won, 2.) Be in Tallahassee, Florida within five minutes of them opening up the next morning. 2.) Claim my money but have on a disguise 3.) choose the annuity. 4)no press conference 5.)Tell my best friend once the money hit my account 6.) Pay my tithe 7.) give my church an additional 5% of my winnings 8.) give my top ten family members&friends some money 9.) start a chain of Fast food vegan restarants 10.) Give a few million to an organization for a cure for cancer research 11.) Donate millions to cancer patients&their families. 12.) open up the world largest homeless shelter that will help not enable people to get back on their feet or begin a successful life as a productive member of society(non profit)...
Those are my top 12 do's..oh I feel the win coming soon
Are you pretending you're an expert on how lottery jackpot winners should spend their winning because you bought a ticket?
Yeah, bad enough lottery winners get harrassed, or even threatened, for money after they've claimed their winnings. But you could run into trouble before you get the chance to claim, when such a fool comes forward and claims it's their ticket that they lost. Like that woman a while back, from Cleveland, I believe it was. You better hope you can prove to the lottery office that you are the rightful owner of the ticket. Being a lottery winner draws a lot of parasites out of the crevices.
"5.)Tell my best friend..."
Wow! You're gonna be busy!
I like the disguise idea. Would Groucho Marx glasses be okay?
LOL..I googled Groucho Marx glasses
.yess i they will allow me to..I was just thinking make up and a bad wig
or do a celebrity look a like disguise..lol..but since the lottery has to id me I wonder how much of a disguise they will allow me to get away with before they say "this is not the same person on your driver's license"..hmmm I wish there were some LP members from each state that have won a jackpot or a lottery office visit amount of cash to share with us their experience when they claimed their prizes..
Good article, a lot of common sense, I'm just not sure about this:
_______________________________________
As someone's sig used to say, you can always buy a better annuity. That and I'm sure there have been jp winners that have taken the annuity and for one reason or another went to one of those structured settlement companies and settled for a dime on the dollar.
I had a friend who won $10,000 on a scratch ticket and called to tell me. I told him I was proud for him and appreciated his trust in me, but I would advise him not telling any other people. He then said he didn't want to pay taxes on the winnings, but I told him that wasn't an option since it would be reported to the IRS AND 25% taken out when they gave him the money. He didn't like that, but I told him he would most likely get a chunk of that back since he had other income and deductions. I also told him he should sign the ticket, then make a photocopy of both the front and back of the ticket. He thanked me, then said he was going to go do that right then and ended the call. He called me back the next day, saying he had gone to the post office to use their public copier, made the copies I had recommended, then went back to his truck and started back home to call his boss and say he was taking the next day off in order to go claim his money...then realized he had left the ticket in the machine! He said he did a u-turn worthy of a Hollywood movie right in the middle of traffic and sped back to the P.O. Thank goodness the ticket was still there!
That was a great story.thanks for sharing.as I read I was really into the story...if you dont already...writing may be an added ticket to your money making life..this is a short yet good read.
You're very generous miracleplay. Bravo!!
Why, thank you! Such a nice thing to say! I try to write, but am not very good at it. (I used to write really bad poetry and share it until I finally developed some shame) For the last several years, I've been trying to write a book about the Hank Skinner murders in Pampa, Texas. (he came within 20 minutes of being executed a few yrs. back) At first, I thought he might very well be innocent, but after hundreds of interviews and hours and hours spent going over the evidence and testimony, I've reached the conclusion that he's guilty as charged. The case is still important, though, what with the Supreme Court ruling that - in a nutshell - he has a right to have tested some of the other DNA evidence collected at the scene. I think the DNA will implicate him further, though. Several YouTube videos of him, if you're interested.
It's actually pretty difficult to find any guaranteed investment that pays off better than the one you'll get from the lottery. Jackpot size directly drives sales volume, so it is a primary mission of the lottery to get that annuity rate as high as it can, which makes the jackpot larger.
Lots of people make the mistake of thinking that the cash value is derived from the advertised annuity, when in fact it is the opposite. They start with the cash amount that they have in-hand from the previous jackpot, then they add the cash that they believe they will derive from sales over the next few days until the drawing, and that becomes the estimated cash value. Then the annuity jackpot is estimated based on the highest interest rate the bank will guarantee. I believe they may have several banks that compete for the business, so the rate is very good.
There are also tax reasons that gives the lottery a leg-up on what you could do with the cash. Chuck Strutt (Director of MUSL) posted about that last year: https://www.lotterypost.com/news/253037/2790065. (Interest rates have come up since he wrote that, so his advice in the second part of his post may have changed since he wrote it.)
He also wrote about it in March of 2012:
Makes for great reading.
(13) Tell your ex-wife
very educative replies............i have learnt many thinks! keep them coming in before this article is taken over by events!
Don't give up on writing. I belive from your above sample and the short story you told about your friend were good and shows the potential of you being a best seller writer. I was enagaged from start to finish without rushing your thoughts in my head. I write and without tooting my own horn.lol.I will say that I write poetry/spoken word pretty good, HOWEVER I can't write an actual song. I am a composer but can't write a song..lol..so don't allow your inability to write good poetry determine your success in writing altogether. " until I finally developed some shame)" that was funny
we are our own worst critic.Maybe it was the crowd not everyone is into poetry. There so many different types of poetry too. Maybe I am just over confident. When I read myself poetry to friends before a show, if I hear crickets, I laugh and say "tough crowd". Then I get on stage; and my poetry and I are received very well. Anyway I think you are a very good writer. You are the kind of writer that will publish a book, and it become a best seller world wide and an in one sitting read. Well money making wishes to you. I can't wait to read your book on winning a lottery jackpot
Thanks so much for the great advice!
Perish the thought.
Oh, the humanity...
First, taking the annuity requires that you trust the government running the lottery to be both willing and able to make those payments. I do not believe those funds are set aside outside the governments control. Maybe someone here can counter that if it's not true. There are too many examples out there of states making ex post facto changes to laws for me to trust them not to do so for nearly three decades, or to determine way down the road that your funds would be better used for the "public good". That $600M lottery win could start to look awfully tempting to politicians who want to hire a new teacher or two and get re-elected. Call me cynical, but I'd much rather have my funds in my hand. If I want to put them in an annuity, I can do that myself. It's all about risk and reward.
Second, one clever idea I heard about sounds to be a fair compromise (although my first point still rules). A couple both claimed the prize, but one took the lump sump for half the payout and the other took the annuity. If that's possible to do, and you're dealing with a big enough jackpot, sounds like a tempting solution.
…but I still think I'd rather have control over all those funds myself.
And when you get that financial advice, make sure you're paying by the hour. Don't give your advisor a percent of anything. Get your advise from one source and invest with another source to remove any perverse incentives. I thank James Dines for that advice. And I heard Rush Limbaugh say a long time ago that he signs every single check. There's no financial manager allowed to do that on his behalf. Sounds like smart business to me.