What to do if you win the lottery

Last week, Mavis Wanczyk, a 53-year-old woman in Massachusetts, won the largest Powerball lottery in history: $758.7 million. She chose the lump-sum option of $480.5 million, or $336 million after taxes.

Awesome!

Now I am going to teach you what to do if you ever win the lottery, a massive inheritance, or any other huge infusion of cash.

1/3 of lottery winners go bankrupt and I’ll be damned if I’m going to let that happen to you. So just listen and do what I say, please.

RULE #1: Shut The Hell Up 

I love you, but please shut your mouth right now. Do not tell anyone. Do not tell your boss, your loud-mouthed cousin with the mustache, or even your kids. You can tell 1 person: your spouse. And then tell them this: Shut The Hell Up. This is your new motto for the next 6 months.

Our friend Mavis decided to tell her boss (“She’s already called her boss and said, ‘I will not be coming back.’”), the press, and therefore the whole world. This means that random people are already coming out of the woodwork and the police have been watching her house.

Here are the scariest people who will try to find you, in descending order:

• Scammy “wealth managers” who will bleed you dry
• Uncle Joe, who wants you to invest in his stupid fucking idea for a themed bar
• Kidnappers who will hold you for ransom

DON’T DO IT. You can always choose to reveal your new wealth later once you have the proper precautions set up. But once the genie is out of the bottle, you can never put it back in. Be quiet and tell no one for now.

RULE #2: You have 2 new best friends: your lawyer and your financial advisor

I get it, you don’t have a lawyer. Now you do. You call up the biggest, most white-collar law firm in the country (just google “highest paid law firm”) and tell them you want a lawyer to help with taxes and trusts. When they ask why, tell them “I’ve recently come into some money and I’d like someone to coordinate my affairs.” They will charge you $500 or $600/hour. Pay it, happily.

This lawyer is now your conduit with the outside world. Who contacts the lottery to tell them about the winning ticket? Not you (see Rule #1). Your lawyer will handle that. Who do they make the check out to? Is it to you? Oh hell no. Your lawyer will set up an anonymous trust for you.

Your other new best friend is your financial advisor. Considering I hate most financial advisors and most of you don’t need one (see page 153 of my book for why), this might seem unusual. However, you just received millions of dollars out of the blue. It’s worth a few thousand bucks to get set up. Go to napfa.org to find a fee-only financial advisor who can guide you through the next few months of setting up your new financial systems.

I have a list of questions to ask financial advisors in my book and signs to watch out for. The one thing you want to look out for — the one sign you’ve chosen a salesperson, not a real advisor — is if they take a percentage of your assets. DO NOT sign up with some nutty wealth advisor who sweet talks you with a beautiful British accent. Just follow my directions from the book and your advisor can help you with the rest.

RULE #3: Do not change anything (with 3 exceptions)

You know all those movies about how a group of criminals gets away with a heist, but one idiot gets the entire crew caught because he goes out the next day and buys a fur coat and a $200,000 car? Do not do that.

For 6 months, don’t change anything. No new car, no extravagant trips, don’t quit your job. Your lawyer and financial advisor will help you get set up. This falls under Advice Everyone Says But Nobody Takes: When someone dies or you get a huge amount of sudden money, do not change anything for 6 months.

If you really need to quit your job, when people ask what you’re doing now, your line is, “I’m doing some consulting.” However, if you were a cashier at 7-11, I’m not sure if people are going to believe you’re a consultant. Anyway, your call.

I know most of you won’t follow this advice, so I came up with a list of acceptable things to spend money on:

1. Extra guac at Chipotle
2. Taco Bell Mexican Pizza
3. I also hereby authorize you to buy every product from http://ift.tt/2vr6gcE

RULE #4: Sign up for the IWT newsletter

Most importantly, sign up for my newsletter at I Will Teach You To Be Rich to learn how to live a Rich Life. Tell your financial advisor it’s free.

What to do if you win the lottery is a post from: I Will Teach You To Be Rich.

from I Will Teach You To Be Rich http://ift.tt/2iFStJn
#money #finance #investing #becomerich