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Why lottery winners end up broke?
Been hearing news of lottery winners ending up poor. Why do they end up broke?
Answers( 1 )
Perhaps it's the lottery curse!
Just kidding! There really is no such thing as a "lotto curse" – only lotto winners with poor to zero financial management skills. Most of these lotto winners are people who have not experienced handling millions of dollars or pounds before. That is why they get overwhelmed and carelessly spend their windfall. Not all lotto winners end up broke because some of them managed their money wisely and followed the tips mentioned in this article:
These are some things you should do after winning the lottery:
1. Secure your winning ticket
The first thing you should do is protect your ticket by signing the back. This ensures that no one else can claim it but you. Keep it in a secure place so that no one can steal it.
2. Keep it a secret or only tell a few individuals
Once you announce that you won the lottery, long-lost relatives and forgotten friends will flock you, asking for hand-outs or presenting business proposals. If the lottery permits, keep your anonymity.
3. Put together a financial/legal team
You can win millions of pounds or dollars if you hit the big jackpot. Handling this amount can be overwhelming so it is best for you to hire a personal lawyer, financial planner and accountant who specialise in estates and investments. Your team will help you create a plan and a solid strategy for managing your windfall and even growing it.
4. Hit the books
Just because you have a financial/legal team, that does not mean you should slack off and let them do all the work. It is highly recommended that you too should get some core financial training. Doing so will help you come up with the best decisions when financial proposals are presented to you.
5. Secure part of the windfall for what's important
To make sure that your money will las as long as possible, you have to secure your future first. Before you purchase luxury items, work with your financial team and plan the amount you need to set aside for insurance. Put aside part of your windfall towards your retirement fund, future educational costs, repayment of debt and any other important expenses.
6. Pay off your debts
Settling your debts is the best financial investment you can make. Use your windfall to ensure that you are absolutely financially independent. Completely pay off your credit card bills, mortgage and other things you owe.
7. You can change your lifestyle, but only in a gradual manner
It is only natural for you to want to change your lifestyle immediately once you discover your incredible stroke of luck. However, financial experts strongly advise against this. Before you decide to quit your job and purchase all the properties you like, let your new found wealth sink in. Give yourself a couple of months and seriously consider and study all the options available to you.
8. Stay in control
While you have a reliable, trustworthy and knowledgeable financial team, it is still important that you remain in absolute control. Keep in mind that the final decision should always come from you. After all, the money is yours and you should be the one to decide how to use it. Make sure you are in the loop throughout the planning process and be bold enough to reject ideas that you think would not work for you.