Almost everybody thinks about winning the lottery. With the astronomical figures that the numbers sometimes go up to, it's practically impossible not to imagine getting a nine-figure windfall and all the things you could do with it. Even those who seldom play try to get in on the action then. However, actually winning doesn't mean that you suddenly have a carefree existence, because you actually have to take care of the money if you want it to last long enough to take care of you.
It's somewhat surprising to realize that most people spend more time thinking about how they would spend a huge amount of money instead of what it will take to maintain it. Money will basically evaporate if you don't put any effort into conserving it. In short, you have to put serious thought into what you apply your winnings to. With that in mind, the clear answer as to the first thing you should do is simple: pay off your debts - including taxes. Until those issues are addressed, spending money should be the last thing on your mind.
Next, I'd advise investing for income. Most winners will have the urge to quit their jobs. If you decide to do so, it's probably worth the effort to give at least two weeks' notice. However, without a job you have no source of income. Sure you have millions that you've won, but that's more akin to savings. Basically, you need to put that money to work for you and have it producing.
By way of example, let's suppose you're making $30,000 when you buy the winning ticket. You'll at least want to replace that level of income. Thus, you could decide to buy $1 million worth of Microsoft stock, which is currently yield 3.3% in dividend payments. In other words, investing a million bucks in Microsoft will earn you $33,000 per year in dividends, thus allowing you to replace the income from your job. (And if you want more money as income, you need to put more of your winnings to work for you.)
Looking back, with your financial obligations taken care of and some sound investments giving you a nice annual income, you can start having a little fun with your money. You can buy some of those things you've been wishing for, or take that exotic vacation you never thought you could afford. You can kick back and enjoy life, but remember to share the wealth with friends and family.
It's somewhat surprising to realize that most people spend more time thinking about how they would spend a huge amount of money instead of what it will take to maintain it. Money will basically evaporate if you don't put any effort into conserving it. In short, you have to put serious thought into what you apply your winnings to. With that in mind, the clear answer as to the first thing you should do is simple: pay off your debts - including taxes. Until those issues are addressed, spending money should be the last thing on your mind.
Next, I'd advise investing for income. Most winners will have the urge to quit their jobs. If you decide to do so, it's probably worth the effort to give at least two weeks' notice. However, without a job you have no source of income. Sure you have millions that you've won, but that's more akin to savings. Basically, you need to put that money to work for you and have it producing.
By way of example, let's suppose you're making $30,000 when you buy the winning ticket. You'll at least want to replace that level of income. Thus, you could decide to buy $1 million worth of Microsoft stock, which is currently yield 3.3% in dividend payments. In other words, investing a million bucks in Microsoft will earn you $33,000 per year in dividends, thus allowing you to replace the income from your job. (And if you want more money as income, you need to put more of your winnings to work for you.)
Looking back, with your financial obligations taken care of and some sound investments giving you a nice annual income, you can start having a little fun with your money. You can buy some of those things you've been wishing for, or take that exotic vacation you never thought you could afford. You can kick back and enjoy life, but remember to share the wealth with friends and family.
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