Winning the Lottery: 15 Things to Do If You Get Rich All of a Sudden

So you won the lottery, now what? Getting rich all of a sudden can be a life-changing experience, but it can also be a curse if not managed properly. Over 70% of lottery winners are back to being broke after 3 to 5 years, and this happens because they have no idea what to do with that money. They've never had money, they've never built wealth, and they're eager to spend it all. That's why having a plan is so important, and it could mean the difference between this money being a blessing or a curse.

Introduction to the Problem

Introduction to the problem of winning the lottery, watch the video for more information

The average person who will inherit or win this much money isn't some kind of sophisticated investor, and we don't recommend trying to be one yourself. Instead, we're just encouraging you to start with the basics first.

Don't Let Anyone Know

The first thing to do when you get rich all of a sudden is to keep it a secret. This is your number one priority at first, immediately after finding out. The instinct to share the good news with everyone you know, to shout it from the rooftops, to shove it in the faces of your enemies, and to burn those bridges with your newfound cash, well, that's what broke people would do. But you're no longer broke, so privacy is your main concern.

Pay All of Your Debt

Pay all of your debt, watch the video for more information

The first and only expense you should undertake in the beginning is to pay off all of your debt. Debt is what's going to eat away at your life, so as soon as that money hits your account, proceed to pay off all of the debt you have so far, and then stop.

Don't Quit Your Job Yet

Don't quit your job yet, watch the video for more information

Quitting your job immediately after getting money is the first domino in a series of events that will lead you to personal bankruptcy in just a few years. We are not wired to be nonproductive; no matter how lazy you are, you need something to do.

Secure the Money and Let it Sit for a While

Once that money reaches your bank account and you've paid off your immediate debt, let it sit for a little while. It's not the money; it's you who needs time to process this. Your entire life is affected by this financial change, but you're still the same person with the urge to get everything you've ever wanted, but don't give in to it.

Make Investment in Yourself a Priority

Make investment in yourself a priority, watch the video for more information

You need to learn before you spend. If you want to keep that money, you need to start learning. You haven't built wealth because you don't know how to grow money, and this needs to change. You need to become a person who is financially literate, who understands how money works before you start moving it around.

Do Not Switch Financial Advisors

If you've inherited money from a rich relative, it's pretty likely they had a financial advisor. The proof of their services is in the amount of money you're inheriting. They know what they're doing, and your money is in the right hands.

Get Comfortable, but Not Rich-Comfortable

Pay off your house, yes, but don't move to a rich people's neighborhood. This is the most common mistake that athletes make. They buy a really expensive home that comes with additional long-term costs like property taxes, maintenance, and so on.

Do Not Invest in Your Friend's Business or Lend Them Money

At some point, the cat's coming out of the bag; everyone's going to know that you've got money now, money that you didn't earn yourself, which means that some people believe they're somehow entitled to some of it. Everyone will start asking you for money, money that you will never see again if you give it away.

Do Not Start a Business Immediately

Do not start a business immediately, watch the video for more information

We've all had the daydream of being a boss, right, telling people what to do, and looking at other businesses like, "I could easily do that myself." But the truth is, nine out of ten businesses fail. You've already exhausted your luck getting the money in the first place; luck is not what's going to make your venture successful.

Prepare for Change

Prepare for change, watch the video for more information

The more money you have, the bigger the target on your back, because now people have things to take away from you. You're more likely to be sued; people will try to scam you or use emotional leverage to get more money out of you.

Focus on Getting Healthier

You've got money now; it's time to enjoy it for as long as possible. You cannot afford to be a victim of your own bad choices at this point. Begin with a full medical check-up, and then start taking better care of yourself. Pay more attention to what you consume, and find ways to improve your health.

The 5% Rule

The greatest thing to wrap your head around is that the money you just received is not going to last forever; that is unless you're familiar with the 5% rule. So, to put it simply, the money you have needs to be wisely invested so it generates an annual return. If you only spend that return, well, in theory, your money should last forever.

Protect Your Kids from the Money

Not only will your life be turned upside down because of this money; your kids' lives will change as well. So, when it comes to protecting your kids from this money, it can be done through a trust where they get an allowance from the money without allowing the original investment to ever be touched.

Do Not Cheat on Your Partner

This should go without saying, right, regardless of what your bank account says. But once you've got money, people will want to be around you for their own personal motives. Temptations will be big, and mistakes will be expensive.

Play it Safe

Because why risk it? You find yourself in this incredibly fortunate position that you can provide a lasting benefit to you and your entire family if you just play it safe. Don't put your money into shady businesses; don't try to push your luck and hope to double that investment quickly. Say thank you to the universe and play it safe.

Conclusion

Getting rich all of a sudden can be a life-changing experience, but it can also be a curse if not managed properly. By following these 15 steps, you can ensure that your newfound wealth will be a blessing, not a curse. Remember to keep your newfound wealth a secret, pay off all of your debt, don't quit your job yet, secure the money and let it sit for a while, make investment in yourself a priority, do not switch financial advisors, get comfortable but not rich-comfortable, do not invest in your friend's business or lend them money, do not start a business immediately, prepare for change, focus on getting healthier, follow the 5% rule, protect your kids from the money, do not cheat on your partner, and play it safe.