If you’re calmly seated in your chair reading this story, you’re probably not one of the three people who won the $425 million Powerball jackpot. (If you are one of those people, please feel free to contact me at the MadameNoire offices.) In case you hadn’t heard, the winning numbers were: 5-25-30-58-59 with Powerball 32 and the three tickets were sold in New Jersey (South Brunswick and Little Egg Harbor) and Minnesota.
But hey! You’ve got a couple dollars and a dream, so maybe next time. And on a daily basis, there are giveaways popping up on social media, giving fans the chance to win cash prizes from a variety of companies. And the question is always: “What would you do with that money if you won it?” Usually people say they’d pay some bills, buy a house, help their family… all things that are noble uses for the money. But people who actually do win, in many cases, end up losing it all. TIME did a round up late last year of all the tragic stories of winners who went bust because of foolish spending and bad financial management. Not to mention the cases of winners winding up dead after cashing in.
The Huffington Post offers up a mostly comical list of things you shouldn’t do if you win the lottery: Don’t give your ticket to someone else to cash, don’t tell anyone (including family and friends) that you’ve won, don’t avoid taxes, do avoid strip clubs.
There are actually a couple of things on the list worth noting. And this goes for anyone who comes into any kind of money, whether it’s a tax return, an insurance payment or an inheritance.
-Don’t suddenly believe you’re an extraordinary entrepreneur. You can lose a lot of money on a bad business venture.
-Don’t give everything to charity. Even if you want to help, use your money to raise even more money rather than just giving it all away in one shot. Plus, it’s not selfish to keep some of it for yourself.
There is actually some truth to the point about not telling everyone that you’ve come into some money. Not only will it prompt lots of requests for gifts and loans that will never be repaid, but you open yourself up to the shenanigans of others. We’d also add to this list:
-Don’t forget to invest. It’s important to use your money to make money. That’s how you go from being rich to building wealth.
-Pay your debts. It’s not fun to take “free money” and pay a tax bill, a student loan, or a mortgage, but that should be your first priority. There’s a great luxury to living with less or no debt.
-Live within your means. Sure, your means might change a little if you come into some money, but you still have to be mindful that the money can run out if you’re not careful. Once your bills are paid, some has been put aside for savings, and more has been set aside for retirement, see where you are and how best to proceed. No one’s saying you can’t get yourself a little something. But a few moments of brief baller-dom will be all you have if you waste this opportunity.
