6 Wealth Management Tips to Help Navigate Winning the Lottery 

Work with a Certified Financial Transitionist® when managing your winnings from the lottery. 

“When I win the lottery…”

Most of us have said this at some time or another, followed by a laugh. The odds are against that happening, and the daydream seldom goes past telling your boss you quit, paying off the mortgage, and buying Mom a Cadillac. Then it’s back to microwaving leftovers. 

But then it happens. According to Search Logistics, only 0.09% of lottery winners win over $10,000 but for those who do, there’s a rush of excitement… and fear. We’ve all heard the horror stories. Again, from Search Logistics: about 70% of all lottery winners end up entirely broke. If you’ve been fortunate enough to win a substantial sum, you’re faced with a world of new legal, financial, and tax challenges. How can you make the right decisions?  

Why do lottery winners need expert guidance? 

Some winners make irreversible decisions without a well-qualified guide, significantly reducing their new wealth. Hasty decisions such as quitting your career and retiring early may jeopardize your financial well-being. You need an advisor and not just any advisor.  

A sudden wealth financial advisor has the knowledge and tools to aid you in using your winnings wisely and maintaining them long-term. At Moneta, the Hadary Team can help ensure you make the right decisions to maximize your winnings, and also to understand the longer-term challenges that come with sudden wealth.  

You’d like to have enough wealth to live the life you imagine – and yet, you may feel overwhelmed and confused about how to navigate the decisions that come with all this money without making mistakes. Which solutions are the right ones for you and your personal goals? How can you be sure you’ll be in the proper position for your life’s changes?  

6 Tips to Help Navigate Winning the Lottery

  1. Think In Terms of Stewardship

The excitement of winning the lottery can quickly launch people into a spender’s mindset as they begin to dream of all the wonderful things and experiences they could buy. This good fortune, however, can be much more powerful in your life if it is stewarded properly to maximize its impact and sustain wealth over the long term.  

  1. Understand Your Options

Winning the lottery comes with choices about how to receive your prize and what to do with it. Different options make sense for different situations. There is not a one-size-fits-all solution, so it’s important to understand the implications of each path, such as taking a lump sum compared to a monthly payout. 

  1. Consult Your Financial Advisor

As you explore your options, it’s important to seek advice from a trusted guide who understands the nuance involved with these complicated decisions. A financial advisor that has the Certified Financial Transitionist® (CeFT®) and Certified Financial Planner® (CFP®) designations is likely well-trained on specialized risks and opportunities involved in sudden wealth. Erin Hadary, Moneta partner and lead of the Hadary team, has both designations, as well as the Chartered Advisor of Philanthropy®(CAP®). This additional training helps the Hadary team build comprehensive plans for clients in complex scenarios, including helping the charitability inclined to do something more with sudden wealth. We can help you identify a path forward that is aligned with your individual goals, concerns, and risks, while also helping ensure you don’t miss or misunderstand the consequences of a particular choice. 

  1. Consult Other Professionals

Depending on your specific situation and goals, you may need to consult an estate planner and tax specialist to help you navigate your lottery winnings. At Moneta, we employ both of these specialists to help you. Our small-team customer service is backed by the large-scale resources of a nationally ranked firm with a deep bench of specialized experts across a variety of financial disciplines.  

  1. Enjoy Your Winnings Responsibly

Getting too deep in the weeds of managing your new wealth can be overwhelming, confusing, and burdensome. Don’t let the process steal the joy from such an exciting life event. It’s okay to set aside some of your winnings for fun experiences or items on your wish list. Just maintain a mindset of stewardship as you spend so you don’t get carried away to the point of regret.  

  1. Have a Plan for Requests

Sudden wealth may attract friends, family, or even strangers to make requests from you that can be overwhelming; you may have kind ambitions to share your wealth with others, but doing so without a plan or trusted advisor involved can make a person more likely to end up in the 70% statistic provided above. Having a plan and setting reasonable boundaries for how you consider requests from friends and family is the type of immediate planning that a qualified advisor can help you develop.  

An Experienced Guide

If you have questions or would like more information about a financial plan tailored to sudden wealth, a conversation with Erin Hadary and her team may be a valuable start. We are based in Denver, Colorado, and service clients nationwide. We offer a free consultation to discuss how a comprehensive financial plan can help protect the new wealth and enable it to grow.  

Partnering with Moneta means working with a financial advisor who puts your needs first. As a fee-only firm, we never receive compensation for the products we recommend. Additionally, we are 100% partner-owned, ensuring that outside private equity firms and corporate shareholders do not influence our recommendations for our clients. Our clients’ best interest is our top priority. Although we are backed by the resources and security of an established firm, we deliver personalized attention found at a smaller office. 

Contact the Hadary team at Moneta to learn more about sudden wealth management and our other services. 

© 2023 Advisory services offered by Moneta Group Investment Advisors, LLC, (“MGIA”) an investment adviser registered with the Securities and Exchange Commission (“SEC”). MGIA is a wholly owned subsidiary of Moneta Group, LLC. Registration as an investment advisor does not imply a certain level of skill or training. The information contained herein is for informational purposes only, is not intended to be comprehensive or exclusive, and is based on materials deemed reliable, but the accuracy of which has not been verified. This is not an offer to sell or buy securities, nor does it represent any specific recommendation. You should consult with an appropriately credentialed professional before making any financial, investment, tax, or legal decision. Past performance is not indicative of future returns. 

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