Most people dream about winning the lottery. Buying a European villa. A fleet of luxury cars. Quitting their job and spending their days traveling the globe. But most people don’t think about the financial planning that lottery winners face; and the financial tips that all people who play the lottery should know.
Financial expert and President of Pacifica Wealth Advisors, Robert Pagliarini, works to help people that have come into sudden wealth, and he says that there are important tips to deal with the psychological and emotional factors that come along with your new fortune.
“You go through this honeymoon phase: there is a lot of excitement, you are buying things, but after a few months, that’s when reality sets in,” Pagliarini says, describing the crucial moment when lottery winners either set themselves out on a path of continued financial success or down a road to financial doom.
Pagliarini says that for those playing the lottery, there are crucial questions that they should ask themselves before they even buy their first ticket. He says that it is very important to know your lotto limit and to use only extra money to purchase tickets; not money that is saved for the vitals like food or bills – and only spend up to $10 or $20 a month. Playing with a group of friends or co-workers? Pagliarini stresses how important it is to construct a one-page agreement between the members in order to prevent winding up in court after disputes about winnings from a pool.
If you hit it big with a lottery win, Pagliarini urges you to be smart about your money.
“Don’t spend more than 10% of your win,” Pagliarini advises. “Take that other 90%, save it, invest it, because that is what you are going to live on.”
Not everyone will win the lottery, but one can dream.
“Have fun, day-dream what it would be like if you won. And then do everything that you can to create that life – even if you don’t win,” says Pagliarini.