If there is anything worse than your lottery numbers coming up and forgetting to buy a ticket, it’s winning the jackpot and blowing the lot — this is known as the lottery winners’ curse.
A windfall awaits the winner of the lottery, but for some, such a life-changing pay-day is too much too soon. Among many, perhaps the most notorious of these winners is Michael Carol who got his big win during a draw of the UK’s National Lottery in the early 2000s. Nicknamed the Lotto Lout, living a life of excess meant he soon squandered the £9.7 million jackpot and filed for bankruptcy.
For those ill-equipped for the pressure of a financial windfall, it’s clear winning the lottery is a burden as much as a miracle. With this in mind, Psychology Today surmised that money can’t buy you happiness, but smart money management can. In this article, we explore how the lottery winners’ curse can be lifted by playing smart with your winnings.
Play a set for life lottery
Playing a set for life (or cash4life) lottery is a sensible way to enjoy the game of luck. Why? Because the payout is gradual and provides a steady income rather than a one-off windfall. For instance, the CashLife jackpot — a popular US version of the lottery — offers players the chance to win $1000 per day for life.
Precedence for this was set in 2018 where Canadian teenager, Charlie Legarde, won the lottery and was given the choice between taking a $1 million lump sum or $1,000 a week for life. After seeking financial advice, Charlie chose the latter and is earning roughly $100,000 a year simply from matching those lucky numbers.
Focus on paying off existing debts
Popping a bottle of champagne or a glass of fizzy water is likely your first thought following a lottery win. But after the initial celebrations, you should look to pay off your existing debts, be it student loans or a holiday credit card. Mortgages are also an important debt to settle, which means you can own your home outright — an incredible achievement for anyone.
While paying off debts may not sound like the most exciting use of your lottery winnings, it does put your best foot forward, allowing you to kick off your newfound fortune with no financial anchors holding you back.
Invest in property
A big lottery win means you likely have enough money to make multiple investments. For example, you could purchase and develop a number of properties to sell for a profit.
Investment is a gamble, but property remains one of the safest investments you can make in life. This is particularly true if you live in a popular market like the UK where prices are predicted to grow by 21.5% by 2025. But a profit is not guaranteed, even less so if you go it alone. To structure investments and better manage your portfolio, heed the advice of a financial advisor. Receiving a financial windfall does not make you a money expert, and talking to one will safeguard your future by putting your money in the right places.
If you’re ever lucky enough to win the lottery, it pays to understand the causes of the lottery winners’ curse. From focusing on paying existing debts and investing in property to playing a set for life lottery — this is how to lift the curse.