Ok, so you've won the mega jackpot and suddenly
you're ten million dollars richer. You're a pretty smart cookie though- you do
watch The Infographics Show after all- and you've seen one of our previous episodes on
lottery winners who lost it all, so you know you need to take some steps to protect this
incredible windfall, or else you'll end up in one of our episodes as another disaster
story. But what in the world do you do with all that
money when up till now your focus has been on making it from paycheck to paycheck? Don't worry, because as usual we've got your
back with another episode of The Infographics Show- the intelligent person's guide to spending
your lottery winnings. Winning the lottery can be a mixed bag. On one hand it can have the power to make
all your dreams come true, and you can finally tell that boss of yours with the stupid little
mustache exactly how you feel about him. But on the other you're going to have to deal
with the instant celebrity, and a whoooollleeee lot of people in your life who suddenly want
a handout. If you've seen our episode on lottery losers
then you'll know that people are going to come begging, and not just your own family
but complete strangers who somehow think that suddenly they're entitled to some of your
cash! But you'd be lucky if begging is all that
comes with your lottery win, as some of your own family members may in fact be out to kill
you just so they can hope to inherit some of your cash! It's said that big lottery wins are good for
three types of businessmen: those who sell fancy vacations, ones who sell fancy cars,
and hitmen. So if you don't want to end up being fleeced
by leeches trying to get at your dough, or on some hitman's list, you're going to want
to spend that money intelligently. First thing, it's ok to splurge some- I mean
after all you did just win the lottery. Get yourself a few fancy things, take a nice
vacation- maybe take some of your more murderous family members with you to stay on their good
side. But don't go overboard with it. First, if you start spending big it's only
going to encourage moochers and beggars, and suddenly you're going to start finding people
that you played jump rope with for one day in kindergarten popping up in your life, claiming
you're the best of friends. Or worse, old boyfriends and girlfriends,
wives and husbands, who are going to serenade you with ceaseless sonnets of their unending
love for you- or who by the way, also might hire someone to try to kill you. It's not just family you have to worry about. But there's another good reason why you shouldn't
start spending money right away- it attracts criminals. Lottery winners are prime targets for thugs
who intimidate, coerce or outright threaten winners into giving them large sums of money,
or perhaps bundles of all the expensive things they just bought. Even more insidious though, it attracts a
specific type of criminal: the scam artist. These professional con men will grease their
way into your life claiming to be anything from a financial advisor to a business entrepreneur-
or they might actually pose as old friends you lost touch with. Whatever their mark's emotional vulnerability,
these pros will exploit it for their own benefit. So the best way to avoid all this unwanted
attention, is to spend discreetly. A few luxuries are nice, but don't suddenly
go from driving a Ford Fiesta with a clutch that sticks to zooming around in a Lamborghini. Another prudent reason not to go into a spending
spree is the simple fact that most high end luxuries don't come with a one-time price
tag. That fancy fiery red Lamborghini you just
bought? It's monthly insurance could be as high as
$568 a month! Think buying a mansion is a smart move? Hope you're ready for heating and air conditioning
bills that are a few thousand dollars a month- big homes take a lot of heating and cooling
after all. How about paying landscapers to keep your
home from being overrun by nature? That's about one thousand a month. Oh, and let's not forget the government, who
definitely is going to get what's coming to it- property taxes every year can be in the
six figures! So maybe set more realistic expectations for
yourself, because we really can't stress it enough: luxuries are not one-time purchases,
and once the money is gone there's little chance your grocery bagging income is going
to cover all the fees of your new fancy lifestyle. Instead of blowing money on the things you
see on tv, focus on spending the money on helping you achieve a lifestyle that can afford
those things on its own- you have a ten million dollar opportunity to completely change your
life! And that's the secret to why most lottery
winners end up dirt broke- they see the money as a windfall, not an opportunity, and when
it runs out they are back in the same place they started. So how do you prepare yourself for a brand
new lifestyle and use this mula-rich godsend to catapult you into a brand new life? First, remain anonymous if your state's lottery
rules allow it. States differ, and while in New York lottery
winners are a public record, other states allow winners to remain completely anonymous-
which will help cut out a lot of the freeloaders and moochers coming your way. You can set up a trust or limited liability
company to receive the winnings in your name, with a lawyer claiming the prize on behalf
of the trust. It might sting a little to have to spend a
few thousand dollars to get some suit just to show up and receive your check for you,
but hey it's money well spent for the peace of mind it'll bring you. Next you have to decide if you want to take
the cash up front or receive payment in 30 installments over 29 years. There's a lot of things to consider here,
such as what exactly are your plans for this money? If you don't have plans yet or if you know
you'd be too tempted to spend foolishly, take the installment plan. You should also consider which way you will
end up receiving more of your money, as tax laws in different states might favor you taking
the full payment up front over being taxed on every single annuity- or vice-versa. With taking an annuity though there's another
issue to consider, and that's what'll happen to your family if you die before the 30 year
period is up. This will leave your family with the burden
of paying an estate tax on your winnings, which could see the money quickly dry up. Do yourself a favor and have a conversation
with some tax professionals before you decide how to get your money- since you have 60 days
from the time you claim your prize until you have to decide, there's plenty of time. Next, do the obvious thing: pay off all your
debts. Just do it. We shouldn't even have to explain why, but
you'd be surprised at how many lottery winners cash in their big prize and continue to make
monthly payments on their old debts- and then when the money is all gone they're still stuck
with their old debt, and likely with a great deal of new one. Don't be a dummy, bite the bullet and pay
back any debt you currently have, then you can enjoy the rest of your money with a clear
conscience! The next thing you should do is set yourself
up a team of legal and financial advisers, and we don't mean your mom, dad, and big brother
who has a rad idea to turn a used car lot into a restaurant. We mean professionals, people with credentials
that you can trust to advise you on how best to handle your money. This is another major pitfall for lottery
winners, and even though we read every day about the rich amongst us having financial
advisors, for some reason lottery winners mostly never think to actually get one themselves. Here's a protip: if even the rich and wealthy
need financial advisors, it's probably because having boatloads of cash is something that
needs careful management, specially if you plan on using it to make even more boatloads
of cash- which you should. Vet each advisor you meet with and check broker
records at the financial Industry Regulatory Authority, where you'll be able to see if
they have any pending or past legal actions or legal complaints against them. You can do the same with attorneys and insurance
agents to see if they've been subject to any state complaints or legal filings against
them. It's incredibly important you vet the people
you're entrusting to advise you on how to manage your fortune, so don't take shortcuts. Plus having a financial advisor lets you pass
off the responsibility of telling moochers and freeloaders no onto him or her- which
is perfect when your big bro comes around again to tell you about his great idea to
turn a former junk yard into a restaurant where the customers can eat inside old bulldozers. Ask your advisors on the best route to invest
your winnings, many will recommend that you don't even touch it for the first six months
and instead put it into short-term investments that will yield some initial returns. Yes, this means you won't be able to live
the high-life right away, but you're already putting your money to work for you, and you'll
be able to tell people you can't give any money away because it'll be safely tied up
with various investments. In six months time you can start to live off
the interest earned on those investments and ask your financial team for more long term
plans. And no matter how insistent he is, continue
to ignore your big brother's idea to turn an old bowling alley into a Nerf-gun arena
and Hooters restaurant all in one. While your money is being invested, learn
to live within a budget. Set spending limits for yourself, or better
yet ask your lead advisor to set up a monthly allowance for yourself. As your money does more work for you and earns
more, this monthly allowance can grow to reflect your growing fortune. It might feel like being a kid again, and
might be frustrating that you're not living the high life right away, but prudence and
discipline will be exactly what lets you completely redefine your lifestyle, and in a few years
your money will have (hopefully) exponentially grown through wise investments. Another smart move will be to set up an annual
charitable donation. Not only will you be doing a good thing for
others, but those who donate to charity are eligible for huge income tax deductions- and
remember, your income taxes are now going to be based off your new wealth, and not your
old paycheck from bagging groceries, so basically don't expect a return on your taxes and instead
expect to owe. A lot. But with deductions of up to 50% of adjusted
gross income, you can offset how much money you're giving back to Uncle Sam and do some
good at the same time, a natural win-win. Honestly we can't harp enough on how prepared
you need to be for taxes, because if you win big, you better be ready to pay up just as
big. Not only do you have to worry about property
taxes on any new homes, and income taxes on your winnings, but you'll also likely for
the first time have to worry about the estate tax. As of 2016 each person was entitled to a $5.45
million limit on tax-free transfers of wealth after they died, meaning this is the most
money their family could receive before Uncle Sam came to get his cut. So if you win big- really big- it will be
prudent to start thinking about how your money is going to be handed down to your next of
kin in case you die. Yet another reason why you need financial
advisors. Winning the lottery can be a life-changing
event, but unfortunately for most it only leads to ruin and the depressing reality of
ending up exactly where they left off. For smart people though, winning the lottery
is they key to creating a brand new lifestyle for themselves, and setting them on the path
to financial success for life. But whatever you do, don't give any siblings
money to open restaurants. Restaurants are terrible investments. How would you spend your lottery winnings? What would be your plan? Don’t forget to watch our other video, why
you don’t want to win the lottery! And as always if you enjoyed this video don't
forget to Like, Share, and Subscribe for more great content!
