There are so many stories of how people lose their winnings when they have a windfall, such as winning the lottery. Here is a simple way to keep your windfall working FOR you for years!
It's really simple, ready?
Let's say you won the lottery. Let's imagine the smallest win in California . . . $7 million
If you take the cash value, you can say goodbye to 50% of the winnings. So you actually get a lump sum of $3.5 million. Oh but wait, you have to pay your taxes! If you consider Federal and State Taxes think 40%.
So take your $3.5 million x .40 = $1,400,000. Now $3,500,000 - $1,400,000 = $2,100,000
So, Ultimately you have $2,100,000. Now let's create simple steps to make your life better for the rest of your life.
Step 1. Hire a tax advisor, financial advisor and attorney. It's very important that you do this first because these guys can help you avoid taxes, fees or any problems. This should cost you now more than $25,000 initially.
Step 2. Get rid of debt. Most U.S. Citizens have no more than $100,000 in debt. Let's just say for this exercise you have $100,000 in debt.
Step 3. Good Karma and great tax deduction. Take 10% and give to charity
Step 4. Play time! What good is winning anything if you don't take some of that money and play with it, spend it frivolous things you've always wanted. Take 10% and play, play, play
Step 5. Now take the rest of your winnings and put it in a safe investment yielding at least 6% per annum. Your financial advisor will be able to tell you were you can find investments that will yield you 6-10% in interest SAFELY. For this exercise we'll go with a conservative 6%.
You have $2,100,000 (cash winnings) - $545,000 (Steps 1-4) = $1,555,000
So, $1,555,000 x .06% = $93,300 per year.
If you keep this cash winnings in this investment, never touch that $1,555,000 million and leave it in that account you will receive at minimum $93,300 per year. This is your yearly salary, without working a 9-5 job, automatically. With no debt, could you live on $93,300 a year?
I don't know about you, but I sure can!
Now that you have a concrete plan if you win the lottery. Go buy a ticket! And good luck.
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