5 Wise Financial Moves You Should Make if You Win the Lottery

Enjoy Your Lucky Windfall but Beware of Vultures

US currency for a job well done

If luck went to your favor and allowed you to win the jackpot in the lottery, what would you do with your prize? You should aim to adopt good money management so you and possibly your heirs can live comfortably and securely for countless years to come.

Beware because from the time you claim your winnings, you would surely be subjected to the watch of vultures who all want to obtain portions if not all of your prize. Lack of smart money-spending habits can be your very own worst enemy as you can possibly squander your fortune quickly.

Here are five recommended financial moves you should take after winning a hefty lottery jackpot prize. Always bear in mind that the fortune should be handled properly and effectively so it can last your lifetime.

Pay Off Every Debt

The best investment at this point is to pay off every debt you may currently have. Whether it is a mortgage or a credit card debt, the rate of return would always be equivalent to the interest rate required to be paid.

Imagine how much you can save by not having to pay interest charges and other fees collected by your debtors.

Hire Legal as Well as Financial Advisers

It may be difficult to determine who really is trying to help you and who is trying to just use you. Handpick and hire your own lawyer, investment advisor, and accountant. Do a background check and interview each meticulously. After hiring, require them to all work together.

This team will have to function as your very own board of directors. Let each of them do checks and balances on each other.

Make Prudent Investments

Put a huge portion of your fortune in safe and short-term investments. Do not even attempt to touch the amount for at least six months. Assign your advisors to create an investment portfolio that is equally divided between equities and fixed income.

Do not ever fall for any investment that you do not fully understand or that sounds too good to be possibly true.

Continue to Live Within Budget

You may not be accustomed to having and spending a lot of money. Surely, it would take greater discipline to preserve your fortune and control yourself from any wild spending spree.

A good strategy is to spend only income from your investments instead of principal. Currently, it takes more principal to earn a decent income. Once you begin spending the principal, expect it to quickly dissipate.

Protect Your Assets

Guard yourself against possibly losing your assets to potential creditors. Those may include disgruntled ex-spouses and people who aim to win legal cases against you. Remember, when people know your pockets are deeper, they would look and create many reasons to sue you. Make everyone realize that you are far from being an easy target.

Insurance is an important concept in anybody’s life, but it can be especially important should you win the Powerball or some other local state lottery. Of course you have car insurance because it is required by law.

If you are buying a home, you carry a homeowners insurance policy. But are you beefed up on life insurance? How about dedicated coverage of some high-priced items you might now invest in? After your win you are a very public target for robbery of fraud. Be prepared.

Set and Review an Estate Plan

Plan your estate tax. Know the limits on current tax-free transfers that can be possibly applied during your lifetime. It is always ideal to have an estate plan in place so your assets would be protected no matter what happens.

Finally, Enjoy peace of mind with identity theft protection from LifeLock, because your windfall is a matter of public record.

About the Author:

Blogging and budgeting are 2 of Andrew's passion. Over the last 3 years he has been an active blogger and has published numerous articles. From debt consolidation to estate planning, Andrew has a sound knowledge of the personal finance world.

The Green Frugal