Winning a life changing gambling prize is many people’s dream. Whether that’s a slot jackpot, a lottery ticket or a scratch-off, most people who have ever played these games have fantasized about what they would do if they won big. When that becomes a reality for a lucky few, some of them find they’re not prepared for the trouble it can bring alongside the huge benefits. So what can you do if you do get lucky and hit a life-changing jackpot sum to avoid those traps?
This article will look at what you should do in this situation, what you shouldn’t do, what you need to think about before jumping into spending your windfall, and some sensible ways to go about enjoying your newfound fortune. Plus, a few case studies along the way.
Take a Moment of Calm, Quiet and Clarity to Assess
First off, congratulations! Winning a life-changing sum of money can be exactly that. Take some time to settle into the idea and get over the shock of it, without actually doing anything with it.
The first thing to do, most lottery advisers and financial professionals with experience in the field would suggest, is nothing. Because you for one, you have to claim the prize first. There have been cases of lottery winners announcing their fortunate win and then someone else stealing the ticket.
This won’t be a problem if you’re playing at online casino like Jackpot City, where big prizes are sent to your payment option of choice within 24 hours of any win.
Interestingly, you might think online casinos are on the hook for big slot jackpots. But they’re not. Most of the time, slot game developers pay out the jackpot as part of their agreement with casinos. So even if you’re playing at a small casino and win millions, they won’t go bankrupt. Easy.
In most US states you have between 90 days and a year to call the Lottery and arrange a visit to claim your prize. You are advised to sign the ticket, and store it away safely until you cam take it to a Lottery Office.
Make Sure to Consider Taxes or Getting an Accountant
Once you’ve claimed your win, you may be liable for taxes. Some countries do not tax gambling wins, but in the US they are. Some states will also tax you too. So make sure to factor that in before you start making any crazy purchases.
If you’ve won truly life changing sums, consider hiring an accountant or financial planner. Possibly one with direct experience helping lottery or jackpot winners. They can also advise you about:
- How to invest what you have won that you don’t plan on spending immediately
- How to best think about spending and how much
- Who to tell and what to do with charitable or personal donations
Without structured planning, a substantial number of lottery winners go bankrupt within 10 years of their win. Around 30% to 70% by some studies. There are less studies of big slot machine jackpot winners, but you can bet they will be similar results. You don’t want to end up like Michael Carrol, the Brit who won $10 million and then squandered it all in 10 years.
Build and Team and Plan Your Spending – Don’t Go Too Wild
Large jackpot wins require professional advice, like a book keeper or a financial planner. Don’t just rely on friends and family. In fact, at least for the first few weeks, you probably want to tell as few friends and family as possible.
If you decide you want to give away money, well done to you for being so charitable. Secondly, it would be prudent to set out exactly how much money you will be giving out. For example, set up a fund with monthly payments until exhausted for younger people or make it clear that it will be one time payment or purchase for adult friends and family.
If you don’t set boundaries, a big jackpot win can put strain on existing relationships. Being clear from the start about what people are getting keeps everyone on the same page, and encourages the people you share your fortune with to be responsible with their gifted wealth too.
You should of course treat yourself. You just won a lot of money – live a little. However, after the initial period of extravagance it will be time to calm down. Financial planners generally recommend that people spend around 2% to 4% of net wealth, if they have no other sources of income than investments.
If you have won a truly substantial amount, say a million dollars plus, you could live off the interest on the principle alone. You wouldn’t be living lavishly off of around $50,000 a year, but in many places that’s a fairly comfortable salary.
Obviously more risky investments have higher rewards. But just like you shouldn’t go wild with your spending, be careful with investments too. Newfound wealthy people are often targets for scam investment opportunities, so watch out for that too.