Life in the District of Columbia

What I would do if I won the lottery

by on ·Finances
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My first lottery ticket.

You may be taking a gamble and purchasing a Powerball ticket, or two, for today’s drawing.  I never played the lotto in my life until last Saturday.

I rationalized, “With the prize money being so large, how could I not take the chance?”  My husband told me that I’m more likely to be hit with a meteorite.  Except, I’ve never met anyone who was hit by a meteorite.  I do know people who have won the lottery.  Well, “know” is a loose term, I’ve seen people with large checks on TV.  I’ve had family who have won large sums from the lottery.  I know they exist.  When was the last time the news covered someone being hit by a meteorite?  Exactly.

Perhaps you’re reading this post, excited about the prospects of winning the jackpot.  You’re wondering, “What should I do if I win the lottery?”  or better yet, “What should I immediately do if I win the lottery?” and you come here, naturally, to see what I would do.
Here goes.

If I won the lottery, this is what I would do:

I would not tell people right away.

In fact if they asked if I won, I probably wouldn’t answer that question.  I would tell a trusted relative (yay for a trusted husband!).  I would not send a group text, call my whoever, or post it on Facebook/social media.    — Let’s back it up a bit, I wouldn’t post my numbers on social media before the drawing either.  If I win, everyone will know anyway.  —  Simply, I would keep it under wraps because I need to get my plan in order.

Once people find out that I won, I will be having long-lost relatives come out of the woodwork.  I bet that girl in kindergarten who cut off my dress would reach out too.

I would seek the advice of trusted council.

Trusted lawyers and financial advisors who understand the intricacies, implications, and burdens of a large windfall will be my new best friends (not blindly, of course).  A large winning such as the lottery comes with tax implications for both the Federal and State governments (some States don’t have income tax, but here in Washington, DC, we sure do!).

There are also considerations such as taking the lump-sum or receiving payouts each year for 29-years in the form of an annuity.  There are pros and cons to each, and I wouldn’t immediately dismiss the annuity.

I’ve seen TV shows where they interview those who won the lottery years after they won.  It’s rather alarming, and sobering, the rates in which winners (1)  were scammed out of money, (2) received large amounts of letters from people begging, requesting, or demanding money, (3) gave away large sums of money (some to strangers) because they felt awful for having so much money / they were made to feel awful for having such money, (4)  left their day-job only to return years later because the money ran out, or they had to sell their new houses, cars, and items.

There were even cases where the winners were more prone to lawsuits, for things such as joking with a friend that ‘if I win the lottery, I’ll share the prize’ or a group pooling money and those in the office who weren’t invited  into the pool sued.  I also saw an investigative journalist show (perhaps it was Dateline) where the winner was murdered so the next of kin, and murderer, could receive the money.

I would get my systems in place before claiming the prize.

After receiving the advice from trusted advisors, I would put systems in place before claiming the prize.  I suspect that they would advise a trust or an LLC, or something.  I would like to have the major financial categories situated with how much money will be in each category.  These categories would include savings, trust funds for education, setting up a foundation for philanthropy, having money set aside for housing, and such.  The big ticket things.  Perhaps the trusted advisors would suggest a certain percentage for certain categories, much like a personal budget and conventional wisdom today.

I would keep living my life in generally the same way.

My husband isn’t going to quit his job and I’m not going to buy a car.  We’re not going to buy a sailboat, private island, private jets, or spending sprees (having a small apartment helps with that).  The lottery may change my life, and there may be other things we would do with the money to augment our life and have a financially stable or flexible future, but nothing very drastic.  I would hope that we would take some time, a cooling off period, before making large financial purchases.  The money wouldn’t be burning a hole in my pocket.

I would have a trusted group of people to rely on.

Having a large amount of money is a burden.  People and non-profit organizations seek you out if you have it.  You may be more prone to consumerism.  You may find it harder to practice detachment.  You may get to thinking that your importance has increased.  To stay grounded I would rely on good friends, family, a church community, and a financial manager to name a few.  I’m still Kate, and I don’t want to have an inflated sense of self importance.

Your turn: What would you do immediately if you won the lottery, or if you came into an unexpected large sum of money or windfall?

 

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4 comments on “What I would do if I won the lottery”

  • Rabia @TheLiebers

    I think you’ve got some good thinking set forth here. I would want to be very sensible and careful too. I know we would pay off all our debt, and my husband would for sure get a new truck, but his current one is 15 years old and falling apart!

  • Rita @ Open Window

    This is a great approach! I would set aside money for college funds for both our children. I’m not sure what I would do after that. We both have cars and I love our house. But it’s fun to dream!

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