What To Do If You Win Big

We all have a wish list of "Things to Do/Buy When I'm A Millionaire".

Vacations flying something other than Cattle Economy Class, buying property, investments, quitting your day job, paying off debts and maybe a college fund for your less fortunate family and friends.

It's tempting to run around bragging about your good fortune and doing all the things you dreamed of but never had money for. Before you do that, have a read through this list of common sense advice.

1. Dont.

If at all possible, avoid having your photo taken with the giant check, and don't put anything more specific than your gender, age and major city in the news article. The second people know that you have several million in your bank account, every old schoolfellow and distant relative will come crawling out of the woodwork, expecting a cut or a loan to be paid back... eventually when they feel like it.

2. Check if there's a winner's tax, and pay that off first.

Sometimes the win comes with a percentage to be paid to the Department of Gaming and Sports (or whatever your equivlent is). Sometimes it doesn't. Check the fine print and get that squared away before you enjoy your winnings. The last thing you want is to be blindsided by a giant tax bill.

3. Those millions can vanish pretty damn fast

Your winnings are a finite amount. If you g0 out spending money like water, those millions won't last as long as you think. Especially if you have some major purchases/splurging planned. You've got the rest of your life to spend them, and a surprisingly large percent of lottery winners find themselves broke within a year.

4. Spend it wisely.

Pay off whatever debts you can in a lump sum, and set aside a few hundred thousand for locked-in loan repayments where you're limited to weekly or monthly installments. Set aside another million or two for that new car, investment property, and first-class vacation.

If you have kids, or Niblings that you like, either start, or add to their University Fund, or just a general fund that they can use for a business loan or house deposit when they're older.

Split the rest between your retirement fund, and a high-interest savings account, ideally one set up to pay out the monthly interest into your main account. (Even a 2% per annum on several million is a five- or six-figure annual income)

5. Don't quit your day job.

At least, not entirely.

Switch to Part-Time, or a few hours a week doing that job you always wanted to go into but knew it wouldn't pay your rent, like lunch lady or a volunteer role.

I know it sounds wonderful to never work again, to be able to spend all day on your hobbies. At first, it is. You get to catch up on sleep, not get up with your morning alarm, and do whatever you want.

But unless you're already retired, your friends still have 9-5 jobs, and won't be available to hang out. As someone who has gone through periods of unemployment, the worst part isn't the lack of money (though that sucks, too), but the lack of things to fill your day with. As part of a captialist society and a member of the working class, you're used to days filled with activity and a set routine. Quit the daily grind, but make sure you have something productive to do at least one day a week.

6. Resist Requests for Money

I'm not saying that you can't or shouldn't help out people who need it, but exercise caution and use your best judgement.

Do they need the money from you, or can they arrange a loan? Is [whatever they need the money for] an emergency, or a luxury? How much do they need, and what is the liklihood of them paying it back? (Refer to Point 3...)

When there's an excess of money, there will also be an excess of relatives crawling out of the woodwork wanting some of it. If I won, I'd offer my closest friends an interest-free deposit to buy a house, to be paid back at their discretion, because I know that they would. If my Aunt came around asking for the same, I'd find an excuse for why the money was already tied up in other expenditures, because I don't trust her to be responsible and pay it back (also, she already has a house, she doesn't need another one...)

If you do loan out money, do it with a contract.

When my parents loaned me the money so I could move out, I signed a contract detailing that there was no interest, I was to pay it back as I was able (I work in Healthcare, and my paycheck varies wildly from week to week), and if they died before it was fully repaid, the remainder would be forgiven, not taken out of my inheritance.

If anyone asking for money acts offended at the idea of a contract obligating that they repay the money eventually, refuse them.

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