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17
Jun
2021
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Know the 19 Things to do if You Get a Windfall of Inheritance, Lottery Winnings, or Athletic Contract? Pay off your debts, financial literacy is king.

Do You Know the 19 Things to do if You Get a Windfall of Inheritance, Lottery Winnings, or Athletic Contract?

Coming into money through a windfall of inheritance or lottery winnings can be both a blessing and a curse. The good news is, you can take the curse totally out of the equation if you understand a few hard and cold facts. Then act on those facts. Some are listed below.

Statistics show over 70% of people who get a large monetary windfall of inheritance or lottery winnings are broke in 3-5 years! An athletic contract or entertainment contract doesn’t do much better. There are many documentaries about lottery winnings or athletic contracts going bust.

An even sadder fact according to those who lost their money after winning it, is that they usually end up poorer after their windfall than before.

The following points are only suggestions but have worked for others when it comes to a windfall of inheritance, lottery winning or athletic contracts.

1. Don’t tell others about your windfall – keep it to yourself if possible

Everyone has the urge to go out in the street and yell, “I have been blessed!” or “I have finally been struck with good luck!” Do not, and there are many reasons those who have done it lived to regret it for decades.

I will tell you later why it is important to keep your good luck to yourself. In cases such as athletic contracts or entertainment contracts that may not be possible, but you can keep a lid on your process of spending and investing your windfall.

2. First, it is a good idea to pay off your debts – and do not make new debts

The first thing to do, is NOT to go on a spending spree. That is usually the first inclination of those who have never held a lot of money. Take a long deep breath, go over to your bill drawer, and start writing checks to pay off your debts, and do not make new debts. You are just getting grounded in your newfound wealth and the idea of living debt-free.

3. Don’t quit your job – right away – we all need to stay busy and useful

Everyone has the need to feel useful and productive. When you do not feel useful and productive, that is where boredom and the feeling of uselessness sets in. Sometimes the boredom is so painful, it makes the bored do silly or damaging things they would never have done when feeling useful. So, until you figure out something else to replace your usefulness, keep your day job.

4. Secure your money and let it sit for a while – at least 3 months – engage in the study of savings banks

 Study banks, investing, particularly mutual funds. Secure your money and let it sit for a while, so you do not make dumb mistakes based on lack of knowledge or forethought. Savor your newfound good fortune. All sorts of advisors are out there to give you all sorts of advice – most will be confusing, and some will be misguided.

So, you need to educate yourself on finances, so you can sift through the bad advice. Keep the money and what you buy with it, in your name and your name alone. Become financially literate.

5. Make an investment in yourself a priority

 You must become financially literate, so you do not become reckless with money or let any of the so-called professionals or family members take advantage of you, there are a few bad apples in every batch. Before you trust an advisor, understand the different types of simple and low-cost investments.

You can also set up your own account at one of the major online brokerage firms or investment bank (same thing), with some of your money. It is wise to balance your money in different places and make sure you can see it and control it. If you do not fully understand what someone is doing with your money, they can cheat you, and many have. Read up on online investment banks.

6. Read articles in MsFinancialSavvy.com – then onto the financial course

There is a lot of information about financial literacy. Using MsFinancialSavvy will give you a head start.
Then, go on to a full-on experience of financial literacy with the CourseForFantasticFinances.com, financial literacy is the best gift you can give yourself.

7. If the money is inherited, leave it in the financial institution it is in for now

Most inherited money is in a local bank or investment bank when someone dies. If they have a lot of money, they usually choose a quality investment bank. Leave it there for now.

8. Pay off your big bills – Do not buy expensive property, the maintenance cost could be outrageous

Bill payoff is crucial, it will get you out of debt. If anything happens to your money, it would be tragic if you did not get the chance to pay off your bills. If you need a home and car research the right ones to buy. Find out what it means to buy a good quality home and car that is not overly expensive. An expensive home and car cost a lot to maintain, there is sticker shock in general maintenance, not to mention if something breaks – costs can be daunting.

Money goes fast, so it is important to be careful with big items. There were two different athletes profiled on a TV documentary who had lifetime winnings of $300 million and $600 million who are now broke. One problem was excessive spending in big things and getting behind in taxes, they should have been set for life. There were other smart athletes who saved and invested well and are set for life.

9. Don’t buy expensive things for your family

Your family members may ask for over-the-top luxury items. Refrain from meeting their demands, you must get used to paying off your bills, paying bills as you go, pay property and car taxes, and maintenance of your home and car. Make sure you are fully insured with everything.  A family member who has not had expensive things will be shocked by the huge maintenance cost of expensive homes or cars.

10. Don’t invest in your friends anything

Friends and even family members may come to you with exorbitant ideas for a new business or a new business venture. If they are so sure it will work, let them use their own money or a bank loan. It is easy for others to waste your money. They did not have any before they came to you, so if it does not work, they will feel no loss. There have been some big money entertainers or athletes who went broke listening to pie-in-the sky investments by family members.

19 things do do with a windfall of inheritance, pay off your debts thenbecome financially literate

11. Everyone and their friends and relatives with BEG you for your money

The minute people find out you have money; they will attempt to use you as a siphon. To them, another person’s windfall is always unlimited. Some lottery winners tell stories of relatives they never heard of or relatives who never speak to them who show up for loans or just large gifts of money. After getting the money they disappear until they need more – it never stops, they always need more of your money. Do not succumb to the pressure. If you do not start it, you do not have to stop it.

Then, of course, there is the best friend’s angle, they will try to convince you that you owe them something because you are lifelong best friends. If you owe them anything, pay it back, but do not get caught up in their guilt-mongering. If you want to share with someone, pick someone who has helped you relentlessly with something big in your lifetime, like your Mom, Dad, wife, husband, or friend, or sibling and give them one great gift to show your appreciation for what they did.

12. Don’t try to start a business

You need years of product knowledge and business management first, according to statistics, 65% of new businesses fail in just 3-5 years. Everyone has this dream of being their own boss, but truth be told – because you have your own business, does not mean you are your own boss. As a business owner you still have many bosses, and those are the excessive numbers of vendors you use, and taxes you must pay, as well as other things.

If you have a brick-and-mortar business, you may have to sign a 5- or 10-year lease. That lease is usually secured with a large bank account or your personal property. I have signed leases in the past, so I know how they work. Anyhow, to own and operate a business, you must know how to own and operate a business.

It is a good idea to first take tons of business classes and then work in the business you are interested in, to learn the facts about the business. Hint! no matter what business you have, a larger business can open close to you and grab up all your clients. This is what happens to mom-and-pop coffee shops when Starbucks came on site.

13. There will be lots of change in your life – prepare for it, do not let changes make you miserable

When you come into a lot of money after having little, your life will change. If you do not change with the changes, you can become miserable. Stay conscious of everything you do and do not let others talk you into decisions you do not feel comfortable about. Constantly do your research.

14. Stay healthy – Get good doctors, eat right, and exercise


It is easier to stay focused on doing right if you are healthy. Search the best doctors in your area and choose a good one as your main doctor. Focus on eating right and cooking healthy. Just as important as eating right; is exercising. Make sure you keep health insurance.

One big medical issue can cost $1 million to $2 million dollars (I have a family member doctor whose patients end up with such bills) – do not lose money that could have been paid for by health insurance. If your job does not have it, you can get it at healthcare.gov.

15. The 5% ruling – You should get as close to 5% interest on your money as possible

After paying off your bills and buying a reasonably priced home and car, try to get as close as possible to 5% interest on your remaining money, so you at least stay ahead of the average rate of inflation. When you do this, you will make a profit from your money.

 Then, consider using the interest to live on. The S & P 500 index is what is called an index fund, it is the same everywhere and made up of the standard and poor’s 500 stocks. Since it does not have to be actively managed by its managers, the cost to maintain it is cheap, and there is no-load. Since it is a mutual fund, it is paid out in compounded interest. It must be purchased from an investment bank.

16. The book “The Millionaire Next Door” will tell you how rich people get and keep their money.

 In the book, they show how most people who become millionaires, did so in their lifetime. They also explain how those who keep their money long term and live a comfortable life, do not tell others about their riches. They manage and spend money wisely and frugally.

17. Set up a “Trust Fund” for your kids.

Make sure if something happens to you, your kids are taken care of. You can set up a trust fund by a trust attorney and have it dispersed by a trustee at a trust bank if you die. There are different ways to handle this, study it, read about it, and then talk to a certified public accountant and trust attorney. If your child’s windfall of inheritance is kept in their name, in their trust, it could be protected for them. They need to understand that early.

18. Do not be a wandering spouse – Keep your spousal relationship solid.

When you are worth a lot of money; and homes, cars, and other properties are put in a joint account, in most cases your spouse gets half when you divorce. Sometimes the divorce attorney gets as much as you. That is a lot. But, in addition, child support could be atrocious. So, it is best to get along with your spouse and keep your money, another relationship may take your remaining money anyway – how disastrous. Your windfall of inheritance, lottery winnings or athletic contract could easily fizzle to nothing, for the simple idea of not respecting your spouse.

19. Play it safe – If a business idea sounds too good to be true, best chance it is

 Stay away from “shady” businesses and investments, no doubling your money scams. no investing with individuals and their hot products. No get-rich-quick offers or guaranteed high-interest payouts. Stay safe with major banks and major investment banks. When you become financially literate you will understand how important it is to stay away from unsafe, high-risk practices.

So, here you have the 19 things to do if you get a windfall of inheritance, lottery winning, athletic contract or entertainment contract. The most important things being to get it to yourself and pay off your debts. Become financially literate and understand online investment banks or local investment banks. Don’t allow a financial advisor to give you bad advice, you can avoid this is you are financially literate.

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4 Responses

  1. Jennifer Dagi

    Wow! These are really great tips for managing a large sum of money. If only people will get their hands on this article before they get a windfall, it will save them a lot of headache.

  2. Kevin Foodie

    Knowledge is power. Thanks for sharing such great tips. I hope i win the lottery one day. I am now more prepared to manage winnings much better.

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