I know – the dream right?? Can you imagine winning the lottery? I mean I can’t, but that’s because I don’t play it. Apart from the occasional Euromillions obviously, when the jackpot gets up to something like 46 squillion pounds, and you feel like you’d be an idiot not to.
It doesn’t stop me daydreaming though about what I might do if I suddenly found myself swimming in cash. Where would I want to live? Which countries would I want to visit? Who would be the first person I would tell?
There’s actually a lot to think about if you find yourself the lucky recipient of a big lottery win, and for a lot of people it’s not all champagne and holidays. Suddenly finding yourself with a very large sum of money comes with a lot of responsibility and pressure. If your bank balance says £274 then let’s face it, you don’t have much to consider, but if it’s £27,400,000 then there are a lot of decisions to be made and a lot of pressure to spend or invest it wisely.
So what are some of the things to consider if you win the lottery? Here are just a few:
Who do you want to tell?
While your first instinct might be to run out into the street and start chucking twenty pounds notes up in the air, don’t rush into going public with your lottery win. As soon as people know, you make yourself vulnerable to all kinds of unwanted approaches from friends, family, charities and complete strangers.
While you may well want to share your good fortune, it will be much easier to manage if it’s on your terms.
Spend or save?
How much of your lottery win you choose to go ahead and spend versus how much you decide to save will probably depend on the amount that you win. Part of the fun of the win will of course be treating yourself to those things you’ve always dreamt of but never been able to afford, like a luxury holiday, a sports car or whatever it might be.
What you definitely don’t want to do though is to blow the lot on frivolous spending and find yourself with nothing left to show for your win, so thinking it through beforehand and finding a balance is key.
Get financial advice
The chances are you’ve not had to think about large scale investments until now, and there are so many different investment options available that it makes sense to take a step back and get some proper financial advice from a reputable source.
Do plenty of research to find the best financial advice for lottery winners – different advisors will specialise in different levels of wealth, so choose carefully.
Do you want to share?
One big question to consider is how much of your lottery windfall you want to share with others, and how exactly you’re going to do this. While of course you will want to help friends and family as much as you can, don’t assume that this will be plain sailing and be aware that some people might not agree with your idea of ‘fair’.
Money can be extremely divisive, and feelings can be easily hurt. Be aware of this in your planning.
Keep in mind tax implications
While the lottery win itself is tax free, there will still be tax implications depending on what you choose to do with it. For example, interest you make on savings will be subject to income tax and anything you pass on to your children will be subject to inheritance tax. Your financial advisor will be able to help you understand the tax situation, just so that you don’t get caught out.
Once you’re happy that you’ve given everything plenty of thought and have a solid financial plan for your lottery win then you get to lie back in that hammock on the beach and enjoy yourself!