It's the Big One, Ethel- you've won the lottety. Now what?
Let's say tens of millions of dollars.....
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Answers ( 1 )
Step one: don't freak out. I'll assume it's a Powerball ticket or something, so it's just a flimsy piece of paper that provides your gateway to a completely different life, so . . .
Step two: protect your ticket. Take a picture of it, front and back, then hide it somewhere SAFE. Don't say a damn thing to anyone, except maybe your partner.
Step three: hire an attorney and hire a tax accountant, and make sure they're GOOD ONES. Maybe ask around a little and ask "who's the best personal tax attorney in town?" until you hear the same name three times -- then call them up and explain your situation. They'll likely be able to suggest an attorney for just this sort of thing. Do NOT hire any friends or relatives!
Step four: follow their advice. You're paying them good money to give it -- follow it. This will set up your finances as wisely as possible to (a) avoid taxes as much as you can and (b) protect yourself from fraud and malfeasance.
That takes you to the second part of your newly complicated life: what to do with your newfound wealth. I would recommend the same thing that I would someone just starting out in the world with a $35,000 job -- make a budget. Track everything you spend, to within $100. Take the time to CARE about where the money goes. You can ratchet up that spending -- if you've won $50M and are taking payments over 20 years, you're still bringing in $100k per month, after taxes. Even if you say "I'll spend $25k per month and sock away the rest", track everything you spend over $100.
But rather than suddenly spending gobs of money, I would give myself a slowly increasing budget. If I spend $5000 per year today, I would up that by $500 or $1000 a month, so I don't go crazy. The primary impact of wealth on happiness is if it continuously increases -- if it jumps up all at once and stays there, you'd be amazed at how "used to it" you'll get and how quickly it's just not as big a rush as it used to be.
How do you spend it? That's up to you. Buying things usually doesn't impact happiness as much as you think it will. Buying experiences has a more lasting impact. Using your money to improve the lives of others might have the biggest kick to your happiness at all -- but it depends on the person.