Winning the lottery would leave me at a loss for what to do. Not because I wouldn’t know logically what to do. But the power it comes with overnight would rattle in my brain. It would fight for control, battling to spend impulsively until I’ve dwindled down to nearly nothing left in my accounts. To fight back at that impulse, I’d have to follow a guide…But where to look? Oh, that got depressing fast.
In news I wish I didn’t want to know but now I do: The Lotto Winners Curse exists.
They make it sound like you’ll be struck by lightning and your odds are probably more likely to be hit than win the lottery, but what do I know? I’m a hopeful person dreaming of ways to improve my situation and there’s a billion-dollar ticket out of here.
It’s a modern-day tale of lottery winners who go from rags to riches to… ruins. Winners win big—several million or more—and then lose it all way too quickly. Or worse, they get killed for their “hard-earned” money. Those headlines really make a girl want to play, don’t they?
“But if you don’t play the lotto, you don’t win”
Okay but according to almost every stat professor and math teacher I’ve ever had: the odds are entirely against you. Buying more tickets does increase your odds of winning..something. You will increase your odds of winning A prize, but is it the mega-ultimate prize? Likely not.
But if I did, and I happened to win… the first thing I’d do is…
I’d shut up. That’s right. I wouldn’t tell anyone. At least, not until I’ve taken care of what needs to be done. Would I be able to hide a sudden windfall of money? Probably not. It’s hard to do. Suddenly having a new car would be suspicious. Fewer frown lines on my face from reduced stress over bills. No, it’d be hard to hide the truth. Instead, I would work quickly to set myself up for success.
The Basics: Pay Off Everything
First things first about winning the lottery: debts. I know, we’re talking fantasy but even fantasies have debts. You know that pile of overdue bills and loans that haunts your dreams? Take care of that. Here’s a quick rundown:
School loans (if still applicable)
Bank loans
Medical bills (thanks, America!)
Housing and electric bills
Mortgage(s)
Credit Cards
That weird “neighborhood debt” you accumulated from borrowing stuff
Car related bills
Set Yourself Up for Success
Next, it’s time to think about the future. The one who doesn’t want to be in a Where Are They Now? special after Shark Tank about people who blew their millions after winning the lottery on houses and properties and toys galore they couldn’t maintain the payments on.
Start with an emergency fund. Personally, I’d stash about $5 million and some change because, let’s face it, life is unpredictable, and so are you. One medical bill, or brain surgery later, you can rack up debt fairly quickly. If you’re on the wrong side of insurance that bill can look you right in the face. Plus side? You can retain a lawyer now. Cons? You have to pay a lawyer.
But where do you stash it? Well. That’s up to you. I personally have a few ideas, but none of them involve shoving 5 million underneath my mattress. Think of the back pain. Instead, a higher-interest savings account or money market account would do for me. It’s easier to get access to these with the amount I’m coming to the table with. Funny how much money it takes to save money.
Once that’s in place, bring in the experts:
Winning the lottery means it’s time for the team to tackle new hurdles and red tape you didn’t know existed. No one likes being on the bad end of a federal audit.
- A financial advisor (or team of them): The fiduciary kind, not your cousin Larry who “dabbles in crypto.” Fiduciary means they are obligated to act in your best interest not their employer’s best interest, for example, if they operate out of EXX bank, a financial advisor who is not a fiduciary will choose options more in favor of EXX bank.
- A lawyer (or few): Because the richer you are, the more legal nonsense comes your way.
- An accountant: Someone who knows how to manage windfalls without sending you to jail for tax evasion. Yes, you have to pay taxes on your winnings.
- A Reliable Therapist: After a few have quit on me for their own life reasons not because I’m a terrible client. I’ve learned the value of having someone in your pocket when life changes on a whim. And what’s a larger change than a sudden inheritance? Sure, it sounds like it’s all thrills, but having a reliable outside guide will let you maintain your mental state.
This team will help you make smart investments. Stocks, bonds, mutual funds—it doesn’t matter as long as your money starts making more money.
Winning Responsibly
Now comes the fun part: spending. Here’s my dream list, but feel free to customize it to your own personal level of chaos:
- Buy a small-ish house in remote lands away from fault lines: Complete with a functional set of bathrooms and excellent Wi-Fi. Maybe even splurge on a bidet with warm water.
- Buy my father a new Rav 4: Because nothing says “I love you” to him like reliable gas mileage and relieving him of a leaking roof.
- Buy my mother her own house: And a staff to take care of it. What’s the point of winning the lottery if we still need to live at home with our moms? Double points if it’s right next door.
- Build the ultimate office: Think bookcases as far as the eye can see, and enough dog beds to satisfy my pack. Plus, adjoining office with sliding doors to expand the rooms to one big one so my wife and I can share ‘one’ office in two spaces.
- Finally finish my books: Because why not? I’ve got nothing to lose now.
Want to get weirder? How about adopting(sponsoring through a reputable organization) a giraffe, starting a hot air balloon club, or hoarding rare stamps shaped like vegetables? The point is to treat yourself—but don’t go full tiger-king levels of ridiculous. Or do. Maybe I will.
Do Some Good (But Make It Look Cool)
Now that you’ve spoiled yourself, what about friends and family? Are we telling them we won? Absolutely…
Not.
Not if we don’t have to. Relationships with money involved can get tumultuous too quickly. Lending out money left and right whether it’s a gift or a loan can lead to unbalanced feelings of people taking from you and leeching off your good fortune. To reduce the stress of having to answer calls from family members when you when, you can opt to remain anonymous, especially on the news.
But not every jurisdiction is kind to lotto winners and lets them remain anonymous. Once word gets out of our windfall, our long-lost nieces, great Uncle Charlies, and common-law cousins will come crawling out of the woodwork hoping to get their hands on a bit of our dough.
Take time for yourself. When you find yourself winning the lottery your phone will blow up with unknown numbers. Don’t answer calls you’re not ready for. I’d recommend getting in contact with a therapist on a regular since you are now in uncharted territory with your newfound winnings. Windfalls may dust away feelings you weren’t ready to deal with in places you aren’t expecting. It’s best to have someone ready to talk to.
If we’re feeling up to it, let’s get charitable.
Lotto Winnings For Good
- Donate anonymously: Rebuild schools, animal shelters, or local roads. Then, strategically “leak” your good deeds to the press if you’re not a silent do-gooder.
- Fund scholarships: Help underrepresented groups access education, but maybe throw in a quirky requirement, like writing essays about why moats are underrated.
- Set Up Trust Funds: If you have people you want to give money to under certain stipulations, I hear this is a great idea
- Back Startups: Will you be the next Mark Cuban? Probably not. But you’ll have enough “f*ck you” money to spend why not invest in something you believe might make it big? The next Uber, perhaps?
It’s all about balance. Be generous, but keep it interesting. There are an infinite number of ways to do good things with your money. You can get behind causes you like, invest in bills and research. Fund expeditions to new locations not yet mapped in the ocean. You know, the kind of reckless things only people with that kind of money can do. No one likes a boring billionaire.
Avoiding the Sunk-Cost Fallacy
Here’s a quick financial lesson: Don’t throw good money after bad. Okay, that sounds easy enough. But when your mind is in the groove and you think your socks are lucky it’s hard to convince yourself otherwise.
If something isn’t working, cut your losses and move on. With enough planning, you could burn through billions and still have enough left over to make interest work in your favor. And for the lottery? You can’t plan it.
You can’t spend your billions of dollars on a billion more lotto tickets expecting to double your money fast. There aren’t statistics you can use to manipulate your odds. According to the Motley Fool: In no state does prizes paid out exceed lottery spending.
That just means on average, you will spend more than you will make back. Sure, you may know someone or just be that someone who is one in a million and a lotto winner. The reality that you might be more (un)lucky to die of chronic constipation than win the lotto doesn’t seem to deter many people. Maybe because we could all use a break in this sh*t storm.
Want more nerdy details? Check out this Bogleheads guide on managing your windfall money of any kind.
Final Thoughts, would I play?
Winning the lottery isn’t just about money; it’s about feeling hope. Pay off your debts, invest wisely, treat yourself, and most people will throw their hat to the ring. Hope is a deadly thing, and it’s greatly missed these days. So when the Powerball hits 1 billion, of course, I want to buy a ticket. My odds are low, but never actually zero.
But still, winning takes playing. How much money are you willing to part with before you win?
In the meantime, I can take some of the learned advice and try to set myself up for success in savings and debts. Will it get me to 1 Billion dollars? Most likely not.
So, what would you do if you won the lottery? Let me know —or don’t. I’m busy researching windfalls.