What Should I Do With My $53m Lottery Win?

Congratulations… you have just won the $53 million lottery jackpot. When the initial excitement and shock wear off, it is very likely that panic will soon set in. What exactly should you do with that amount of money? How can you avoid losing it? There is a long history of lottery winners who ended up losing everything because they simply made bad choices. Before running to the lottery office excitedly to claim your prize, first take a few deep breaths and strategize.

First of all, hire an accountant and a lawyer before claiming your prize. They can help give you direction on the best way to proceed and advise you on whether you want to take the lump sum or the annuity. In most cases, the lump sum can work out to be more money in the long run if invested well. There are also plenty of tax repercussions that need to be considered.

Keep in mind that a $53 million prize is not really $53 million. In fact, you can say goodbye to about 1/3 of that sum right off the bat as you will owe it in taxes. Nonetheless, the remaining amount is most likely still more than enough to do everything you have ever dreamed of. While it may be extremely tempting to go on a huge shopping spree once the money is in your account, a few hours of professional direction can save a lot of heartache down the line. Make a list of all the things you would like to do or buy and share the list with your advisers and they can guide you on how best to achieve all of those goals.

Investing is one of the best things that can be done with lottery winnings. Initially, this can help you recoup the losses suffered in paying taxes and in the long term, this can help replace the money as you spend it doing the things you want to do. Think of investing as a source of continual income without having to get up every day and go to work. Prize winnings can be spent a lot faster than you think so it’s better to set aside some money right from the start as insurance for your future.

Many advisers will encourage you to invest large sums in U.S. government guaranteed investments such as bonds in order to protect against future losses. While this is very wise advice, remember that it is never a good idea to place all your eggs in one basket. It is best to diversify your investments by choosing stocks and real estate in addition to the aforementioned treasury securities. This process does not have to be confined to a boring transaction book that your accountant has to translate for you. Car lovers may want to invest in a classic car collection, for example, or art lovers may want to buy some rare paintings. All of these are great ways to keep your funds in different formats and avoid the kind of devastation suffered in the recent economic crisis by people who invested only in the stock market.

You should pay off your debts right away. You will also want to think about what happens with your money when you are not around. Estate taxes can eat up a significant chunk of inheritance so consider setting up trusts for your loved ones in order to avoid giving up too much of your prize to the government. And if you did not have a will before, now is the time to make one.

After setting aside the funds necessary for taxes and investment, the remainder is your play money. This is where the fun part comes in! You can buy a yacht and live in Monte Carlo or spend the year traveling across the globe on your private jet following your favorite sport. You can design your dream house and build it in any place you want. You can buy sportscars for yourself and your family members. There are so many ways you can enjoy the money while feeling confident that your money will continue to grow.