With the MegaMillions lottery jackpot price of $1.6 Billion and the PowerBall well above $600 Million for a combined over $2.2 Billion, there’s definitely some talk about that money.
Many dream of what they’ll be buying or doing when they hit it big, but not sure if they’re thinking of the responsibilities that comes with such sums of money. It is very easy to dismiss all and just say, ‘I’ll take care of it when there’, but the question is: Has it really crossed your mind of what and how you’ll handle all that money. Well, to me it has and it does all the time.
Of course, I also put in my $2 for a Megamillions ticket as I usually do when the numbers get really large, not that the starting $20 Million jackpot is not enough, but as it’s always there it doesn’t register as an opportunity, but $1.6 Billion does, as now the largest ever jackpot on the game. Sure, if you get the cash payout that becomes less than one billion and then after taxes probably about $500 million, but that is still is a huge amount even for a very wealthy family.
What to do if you win?
While you may win the money, most of us have never had to deal with such type of instant windfall, the intricacies, the family dealings, the ‘newfound’ friends and relatives and the charities that want you to be charitable after your huge luck. Of course, you’ve never had to think about what to do with that kind of money, but now you do. You just WON, a Big Congrats from us. Now what? Save the ticket, keep it under your mattress and hope no one knows about it? Who do you contact and what do you do? Do you have a lawyer in mind, a financial planner or tax adviser that can help you and guide you? Or do you just put it in the bank and not really worry about anything?
There’s a ton of questions to think about and I haven’t even started to throw the family questions your way? Do you share your wealth with them? If so, how much of it and then how do you divide it? What if they’re unhappy with it or think you could have given more? What if conflicts start even though you feel you’re more than generous?
The point for all these rhetorical questions is that while many are salivating about the prospects of hitting it large, not sure what percent of people are really mentally prepared for it and what follows such huge financial blessing. I don’t have all the answers either, but at least I’ve taken the time to think and prepare myself answering those questions, rightly or wrongly, but I’ve thought about them and as they say ‘Chance favors the prepared mind’, I’m preparing my mind and opening it up for the opportunity.
Here’s what I would do
So here’s my list of preparation, which of course, is not at all complete. After hitting the Megamillions lottery or finding out about it, I won’t tell anyone except my wife. I’ll sign the ticket, then I’ll check my connections for a good lawyer and will pay upfront for a consultation, checking on what are the best options to collect the earnings in order to preserve my anonymity (in just 6 states, which includes Maryland, you can collect in anonymity if you desire, but in others you cannot). I’d also hire a financial planner, in my case I am one myself, but I’d still potentially reach out to two or three fiduciary advisors to get some ideas and thoughts and maybe even let them manage some of the money. I’ll also reach out to an accountant, someone who can look out and make sure I don’t have to pay unnecessary taxes (of course the necessary ones). Then I’ll reach out to a family psychologist, surely with all this money I’d like to talk to someone about that and also ideas how to share some of my wealth with my family while maintaining or increasing family harmony and cohesiveness.
Don’t forget to give
Lastly, I’d probably join the Bill Gates and Warren Buffet’s ‘The Giving Pledge’, a pledge made by some of the most wealthy families to give out to charities and give back to society at least half of all their wealth. I think this will be a big contribution for me and my family, as I believe that we need to give back to others, especially after such a windfall. There are many social causes that require attention and resources and this money will definitely help a lot.
For the rest of us
Well, while dreaming of hitting it big, getting back to reality is that my chances (and yours as well) are 1 in 302 million of hitting the Megamillions jackpot and your chances are NOT in your favor of hitting the jackpot. Many of the items mentioned above are of course if you hit the lottery and now have millions to worry about, but the concepts can be used for many, even if you don’t hit the jackpot.
First, making a plan about what you’d like and thinking thoroughly about it is key to many things we do in life, including saving and investing for our future. Hiring professionals that can help us get there, like financial planners or coaches is another key aspect. Lastly, for being generous and giving back we don’t need to hit the lottery, we just need compassion, love for one another and if we don’t have the money just spending time with people we care and love. Hitting the MegaMillions lottery would be great, but you’re already blessed compared to so many others in the world that cannot spend that $2 on a lottery ticket as they’ll need to purchase bread first.