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Harris Financial Group Managing Partner Jamie Cox offers tips for managing a financial windfall such as winning the lottery.
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Two lucky folks hit last -- 588.
Million dollar powerball jackpot.
Not me of course they matched all six numbers.
One ticket was -- near Phoenix Arizona the other just outside Kansas City, Missouri.
But if -- it was the year though this many lottery winners and up going bankrupt take a look at this.
There it is -- -- This recent study found 19100 lottery -- winners over I think ten years.
-- at all.
That they wouldn't have if they knew how to manage the -- properly and it's a lesson for all of us if we have the jackpot Regis make money the old fashioned way.
Jamie Cox joins me now he's managing partner of the Harris financial group.
Thanks for -- I'm.
Now I -- your notes and -- funny thing you said is the first advice you would have to any lottery winner is stop playing the lottery.
That's right I mean you know lightning doesn't strike normally in the same place twice and if you're lucky.
You've won the lottery stop wasting money on lottery tickets and -- now wisely.
Although the probability of winning the lottery is really low.
The probability of squandering an all being -- as you just talked about is really really high so free to one of the things that you're doing if you're playing the lottery is wasting money so it.
-- all of these I don't like any -- and you know we always do this segment when there's a big lottery winning on on how to -- and best.
-- ever navigate a windfall that the and but the reality is people just do it really badly now.
With lottery winnings you can usually taken annuity or a lump sum which now Michael get today until dad one that lottery what would you tell me.
Well I I would that would take two pronged approach wander without evaluate whether you were able -- to control your spending.
If you were completely unable to control your spending -- -- that -- take that monthly annuity because you can only spend it as fast as you receive it.
If however your a person -- can control your spending who have been responsible than the lump sum option could be a viable.
Choice for you coming okay just did get a little push back here wouldn't want to pay the taxes upfront be -- -- What depends I mean it really depends on what the tax rates are at the time I mean you could you could argue that right now that since -- are probably the lowest are going to be and what some time that you'd want to liquidate pay the taxes now I can make that argument but.
The other thing -- -- pay attention to visit the 4% kicker for a 4% CPI increase.
In the cost of living over that annuity so you have to look at that -- it in the context of tax opportunity tell -- it's yet to be really careful when -- making decision to take that cash.
Well -- -- read the stories about these people over time they always have problems with their family.
Your advice which I cannot even imagine your making it you say learned to say no to families and friends.
Do you live alone.
-- That's that's that's -- that's not -- August saying that you could become very popular.
When you -- you windfalls.
You may you may have had nothing before all the sudden you have all this money so everybody that that nature around sort of becomes your best friendly news to be very careful.
And that you need to measure your benevolence you should always be -- you should always be charitable but you should never support someone that.
You know couldn't otherwise support themselves -- need to make sure that you don't create dependency -- For other people look at this money doesn't last for ever -- -- be careful about that -- same note that the reasons why people are broke after ten years as they spend all the money.
And what they spend it on -- things other than themselves he would be very very careful about that's what I'm saying if -- and I always get us out of us.
What I like about your advice and it's good for anybody out there whether you got fifty bucks instead of 5889.
Whatever you got you say pay after debts become your own bank.
And then -- -- -- about all the other stuff what's your debt is gone -- your free and clear then you can start thinking about charitable giving giving to family.
Buying that new car right.
Debbie cash flow is the most important part whether you're.
Though they're working retired whatever.
In the first place you always go is paying off your debts that is a no lose proposition I've never seen anybody fail -- any endeavor they've done if they have no debts so that's the number one day Ramsey.
You know a perfect fox contributor he's very good at that I think it's absolutely sage advice.
And then on top of that you should invest after you've done basic saving everybody gets this backwards they try to.
Get rich quick by either play the lottery you're investing think -- they're gonna get really -- off and these are these are things that happen over time so you have to put them in stages.
Have no debt develop savings and then invest if you do it our way.
Then you're gonna have money for the rest -- -- -- I think I got it have no debt and that's I'm prepared.
Should monies that showering on -- banks recover and -- we appreciate it.
Thank you very Christmas Merry Christmas to you.
