The winner (if there is one) of Friday’s Mega Millions lottery drawing will instantly become one of the richest people in the world, with the jackpot eclipsing a cool $1.25 billion. While it’s been well-documented that winning the lottery won’t necessarily translate into a lifetime of eternal happiness, it’s impossible not to daydream about what you’d do with such a life-changing windfall. But before you get carried away thinking about the mansions you’ll buy, you need a plan to best set yourself up for a stress-free life of financial freedom. So, if you win, what are the first things you should do?
To find out, we asked Dr. Robert Pagliarini, president and chief financial advisor of Pacifica Wealth Management and the author of The Sudden Wealth Solution: 12 Principles to Transform Sudden Wealth Into Lasting Wealth. Pagliarini has 24 years of experience advising lottery winners and has some choice advice for your to-do list should you strike it very rich.
Keep calm, and protect the lottery ticket
The first piece of advice Pagliarini has for the newly minted lottery winner is simple: Just breathe. “You have some life-changing decisions to make that require your full mental abilities,” he says. “You don’t want anxiety, excitement, nerves, or fear to cloud good judgment. Tell yourself that you can go crazy with excitement later, but for now, you’ve got a job to do.”
Once you’ve wrapped your head around your nearly impossible stroke of good fortune, the next, most important step to take is to ensure the safe-keeping of your winning ticket. After all, you didn’t win the lottery—the ticket you bought did.
“The lottery ticket is a ‘bearer instrument,’ which means whoever has it owns it,” Pagliarini says. “This means you have to document that you are the rightful owner of the ticket. How? Take a selfie of you and your ticket. Take a video. Keep it safe!” It’s also frequently suggested you add your signature to the back of the ticket to further demonstrate your ownership.
Understand what your winnings will actually look like
According to Pagliarini, one of the most common pitfalls lottery winners face is they think they’re coming into more money than they actually are. “If you win a $100 million jackpot, you (and your family and friends) might think you have $100 million. You don’t. If you take the lump-sum, you get about 60% of the jackpot. So that drops you to $60 million. But then you have federal and (often) state income taxes. That cuts your win in half.”
To be fair, whoever wins the $1.25 billion will be taking home more money than any one person could typically dream of spending—around $492.9 million after paying (a lot of) taxes if you take the lump sum cash option.
Additionally, Pagliarini cautions lottery winners to consider their lottery winnings with the correct mindset. Since lottery winners didn’t earn the money, he’s seen them be susceptible to spending it more freely. “It feels like Monopoly money,” he says. “You are likely to spend it more freely, give it more freely, and invest it in much more risky investments.” Even people who have won absurd amounts in the lottery have gone broke.
Stay quiet about your win—and lawyer up
Among the advice Pagliarini gives lottery winners within the first twenty-four hours after winning is keeping the bombshell news on the down low for as long as possible. “Only tell one family member,” he says. “Keep it a secret to everyone else at this point.” After all, the sooner people know about your winnings, the sooner you’ll be fielding correspondence from those hoping to get a piece of the pie. And as previously discussed, their idea of how much money you’ve truly come into will most likely be inflated.
After having presumably one of the most fun and out-of-body conversations of your life with your chosen loved one, Pagliarini suggests securing a lawyer. “Hire an attorney,” he says. “You want someone on your team to help you and who has your best interests in mind.” A lawyer will be able to help you with claiming the winnings (and will advise you on whether your state will let you do so anonymously), as well as laying the groundwork for protecting your newfound bounty.
This article was originally published in July 2022, updated on Nov. 4, 2022 with context surrounding the new Powerball jackpot, and updated again on Aug. 2, 2023 to reflect the Mega Millions jackpot.