Currently the jackpot for the mega millions lottery is valued at a record breaking 1.6 billion dollars, with a chance to get even bigger if a winner still isn’t named. That’s a lot of money and all around the country, people are dreaming of what they might do with that kind of windfall. Maybe they would purchase a home, buy a new car, pay off debt, or set up that college fund for the kids or grandkids. Every time someone spends their two dollars on a lottery ticket for their dream, the jackpot grows. But what if you actually won? What would you really do? The dreams are nice, but there are a lot of things you need to consider if you become instantly wealthy.
Take A Breath And Plan
The first thing anyone would want to do in this situation is take a breath and make a plan. You don’t have to rush out and turn in the ticket and you probably shouldn’t anyway because you could be inundated with people trying to get some of your lottery winnings. Secure the ticket, make some copies if you can, and protect your privacy while you decide what to do. Don’t get starry-eyed over the amount of the winnings and forget to stick to a plan. Write down big ideas for what you want to do with the money that you can come back to later once you have a financial team.
You are going to want a team that is at least comprised of financial advisors and a lawyer. Maybe you might even hire a life coach to help you maintain a healthy viewpoint. The fact is that more than 70% of lottery winners end up going broke within a few years. If you’re not disciplined, you could lose it all. It can be difficult to keep things in perspective, so hiring people that will help you maintain your money is going to have to be your first step.
Secure Your Funds
With a huge number of lottery winners falling into financial struggles and personal anguish, it’s obvious that a financial plan is important to maintaining massive winnings. You can make the big purchases like a new house or a vehicle while also taking the cash you have and making something of it.
There are a lot of things you will have to think about when planning what to do with your instantaneous wealth. You will have to decide whether or not you are going to take the money as an annuity to preserve the winnings, or take a lump sum of the cash. Keep in mind that the government is going to take their cut of the winnings, which could total in excess of 40% of your winnings if you take the lump sum. You could see that 1.6 billion dollars reduced to just 650 million dollars! For most of us, that’s still more money than we can imagine spending in one year. However, if you take into account new expenses you might never have had before like a new income tax bracket, property taxes on any property you buy plus the upkeep, taxes paid on any gifts that you might give to family or friends, or a myriad of other costs, you could see your lottery winnings dwindle quickly if you don’t secure your funds.
It’s a good idea to immediately protect your estate. Purchasing life insurance is probably a bare minimum to protect your family and your wealth in the worst case scenario. Rather than applying a full offensive financial plan like many do that make a sudden windfall, it would be smart to be defensive with some of your cash. You can use the Infinite Banking Concept to turn some of those profits you receive from the lottery into a banking system for yourself and your family. That way, your protecting large portions of your wealth with a specifically designed whole life insurance policy while paying yourself with its cash value.
Prepare For The Future
All the lottery players right now are dreaming about what they might do with the money immediately and we can’t really blame them. It can be easy to fall in love with the big ticket ideas flashing before your eyes as you hand over your two dollars. However, the long run is important if you do become a winner. You could potentially change your life if you suddenly had a 37 million dollar annuity off this record breaking jackpot. For better or worse would be up to you and how you choose to prepare for more than just the first few years after winning.
If you were to win, how would you protect that wealth? Put it in the stock market and watch your winnings dwindle as the market continues to fluctuate? You could invest in a business or start your own, but do you know enough about business investment to protect your wealth? If you choose to just bank your earnings, banking institutions limit how much you can put in each account and they usually don’t make the massive interest returns that people expect, even with a large sum. Couple that with the fact that most big banks and the super wealthy of this country already protect their assets with the Infinite Banking Concept. If you won big and wanted to protect your wealth, putting money aside into dividend-paying whole life insurance is going to secure that money, earn you cash value, and solidify a legacy that will last. If you win the lottery, don’t be one of those winners that ends up losing.
You Don’t Have To Play To Be A Financial Winner
Statistically, the chances of winning the lottery are about 175 million to 1. You have a higher chance of becoming a famous movie star, pulling a royal flush in the first hand of poker, or dating a supermodel than you do of winning the lottery. It’s nice to dream, but that’s mostly what your two dollars are going to buy: dreams. Still, it’s fun to imagine what you could do with a cash infusion that lets you make the purchases you want to make or pay off that debt that’s been nagging you.
What if you could do that without playing against the massive odds of the lottery? At Factum Financial, we specialize in helping people protect their wealth, grow their assets, and secure their legacy without relying on numbered balls. We teach people to use the Infinite Banking Concept to protect and grow their money, giving them the power to be their own banker and stop relying on a broken financial system. With our specifically designed policies and transparent planning that focuses on your needs, you can feel like a lottery winner too.
To read more about protecting your wealth, check out our last blog here.