Winning a lottery is a dream come true for many. But winning a huge sum in lottery also needs extra care for your financials. All of a sudden you have got lots of real money in your hands and you are totally confused as what to do with the money or how to handle it. Remember to keep calm and have control on your emotions. So to act wisely come up with plans of what you would do you’re your winnings. If you are wise, you could turn your lottery winnings into more of winnings and investing it at right place. Therefore here are seven important points to take care of when you win a Canadian lottery.
1. Know your tax situation
As you know each lottery game has its own way of paying out the winnings. Some lottery wins offers you a choice between taking the prize money all at once or having it paid out in installments. Often getting a lump sum payment, means you must pay tax. Therefore it’s important to look at the terms and conditions attached to the lottery ticket. You have 60 or 30 days from the time you claim your lottery prize to weigh the pros and cons of what is best and will save you money. During this time, ask financial advisers to crunch the numbers and help you decide which type of payment suits you best.
2. Get away with your debts
We all have some kind of debts and if you win a lottery then best way to use your money is to pay off your debts and have a sigh of relief. Because debts can create even more debts. If it is a credit card debt or a mortgage, it is important to stamp out these debts as soon as possible and be free to decide what to do with the rest of your winning amount.
3. Have some savings in bank accounts
It is important to meet with your bankers and financial advisers to find out what type of bank account could be the most beneficial to you. You may be entitled to a high interest account which would really help you to increase your wealth with hardly any effort. Also many Canadian banks offer term deposits and other money growth schemes which you can put your wins in.
4. Avoid any unknown financial investments
Being a winner many types of investors will try to contact you and lure you to invest in their shares or companies. But it is always advised to be cautious and don’t take any such step which can lose all of your wins. It is best to take your own time and first six months of winning avoid any investment. Many lottery winners quit their jobs and buy properties. However this can be destructive for your financial investments. Take you spending easy. Rent a property first in the area you were thinking of buying and the gradually think of investing at a right time and place.
5. Think of your family
Family comes first if the family really loves and cares for you. If you have young kids or grandkids you can look for their future and secure money for them.The best way to pass on money to them while ensuring you retain control is to put the money into a discretionary trust. You can oversee the accounts by becoming a trustee. You can choose how much to put into the accounts every few years. This will be subject to tax for some years but will then be free from inheritance tax when you die. In this way, all the children and future grandchildren could be included as beneficiaries. Also be cautious of those family members who lure you to invest at a wrong place.
6. Hire a financial adviser
Some things need to be done in legal way. It is best to hire a financial adviser who knows the best of investments for your winning money. Also it is very important to keep meeting with a financial adviser to keep up with investing your winnings in the correct way. Also keep all documents and paperwork of your finances in order and in a proper place so that no one can temper it and you can find them when you need them.
7. Do not be a spendthrift
Many lottery winners after winning their lottery become more spendthrift and do lots of crazy things. But there are many winning stories where winners have become losers because of this habit. Going on vacation or holidays is right to enjoy some time with your family or friends. But spending money on luxury or playing more casino or lottery games, boozing away, buying expensive things or giving money to your friends to spend can soon make you bankrupt. Thus act wisely with your money and spend only if you need. Remember your old days when you were without money and were desperate to win the lottery to have money.
Finally apply all these points and remember them whenever you are tempted to spend your lottery wins without proper financial advise.