The Powerball lottery reached an insane amount of money yesterday. The estimated jackpot is around $500 million which after doing the fun math makes each $2 ticket worth about $0.97. Despite that payout being terrible compared to most slot machines, people en masse will have purchased lottery tickets for hopes of the big payout. Those of rational mind will consider this a waste of time. People that like to have fun know the experience is part of the fun and a ticket every once in awhile ain’t a bad thing.
So let’s assume you have won, what do you do next? Here’s what I would do:
Step 1: TELL NO ONE
The dumbest thing you can do is spread the good word. If you live in a state where the winners are publicly disclosed more people than you care to know will be bothering you shortly. But you need to keep your mouth shut until you get your house in order.
Step 2: Lawyer Up
If you know a lawyer you can trust that’s great. But if you don’t just try to find a good one quickly, you can always change them later. This person’s only job is to protect you. They can speak on your behalf and help get your house in order. They are not your money manager, they should only be paid in fees. At this stage if you need to tell trusted loved ones, quit your job, call that lost love etc, go ahead.
Step 3: Talk To Two Banks
Banks may be money grubbing whatevers but they also know how to take care of your money. Go to the biggest banks as they’ll have people that specialize in handling hundreds of millions in wealth at a time. You’ll get a whole team of specialists that can help set up accounts, prepare taxes, create trusts, and manage the money. The big banks are also easier to hold accountable if you end up with a scumbag. Why two banks? You have enough to spread around, this also helps make sure you are getting good advice.
Step 4: Claim Your Money
That’s right, you haven’t claimed your money yet. You want all of the other stuff set up before you go and claim. This sounds like a lot, but you can be ready in a couple of days easily. Have the money moved into the major banks and kept mostly in cash and liquid investments. Simple stuff.
Step 5: Go Have Fun!
You’ve got more money than you know what to do with. Go spend some, buy a new car, or that nice town you’ve always had your eye on. But of course be responsible because there’s work to be done.
Step 6: Learn & Plan
Your full time job is managing money now. You need to know everything there is about taxes, trusts, and investing. You’ll have bankers that can help you, but these decisions are your own and you need to understand them. It’s also time to make plans for the rest of your life. You want to find something constructive that doesn’t involve spending money. I’d beef of my website and really focus on becoming a better writer and start a lab for running behavioral experiments. But you want to figure this out because there are too many stories of people finding massive wealth and either blowing it or living empty lives.
Step 7: Give
You’re a rich person, and one of the reasons we don’t have high taxes is because of the generous charity to Americans. Millions of Americans gave up their money to make you rich. Return the favor.
Luckily, I know my reader base is likely smart enough to not really need such a guide. Unluckily, we’re all likely too rational to have purchased a ticket in the first place. Still though, what would you do if you won?
Image: Lisa Brewster