THE BLOG
11/23/2012 11:46 am ET Updated Jan 23, 2013

Five Things to Do if You Win the Powerball Jackpot

The Powerball jackpot is climbing to record levels as I released a new book, Life Lessons From the Lottery: Protecting Your Money in a Scary World. It is a follow up to my 2008 best-selling book called Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery.

If you win the jackpot, follow this advice carefully.

1. Tell as few people as possible (preferably no one) that you won.
2. Take a deep breath and make some good, long-term decisions. You don't have to cash the ticket today.
3. Work with a financial adviser who works with more money than you have.
4. Take the money in annual payments instead of the lump sum.
5. Use some of the money to give back to society.

Those are five simple rules that about 90 percent of lottery winners don't follow.

1. Tell as few people as possible (preferably no one) that you won.

If you can keep your jackpot quiet, do so. As I told Rebecca Jarvis during an interview on CBS Morning News, "Once you have told the world that received money that you never expected to have, everyone has their hand out, and you are not prepared for it." I once told a young, single, publicly known lottery winner that he had just become the best-looking man in his city. He was realistic enough to know that that wasn't really the case.

2. Take a deep breath and make some good, long-term decisions. You don't have to cash the ticket today.

Some people can't wait to cash their ticket. There have been stories about people camping out in front of lottery offices overnight with the winning ticket. Most lotteries allow you several months or a year to cash a winning ticket. The money will still be there in a month or so. Take some time to figure out what you are going to do with the money and how you are going to do it.

3. Work with a financial advisor who works with more money than you have.

There are financial advisors, estate-planning attorneys and trust officers who have worked with $100,000,000 or more. The scorekeeper for your local bowling league is not one of them. People will often hire a friend as opposed to someone who really knows about big money. A good friend would tell you the situation is too complicated for them and help you find some real experts. A lottery winner has tax, estate and planning issues that they didn't have the week before.

4. Take the money in annual payments instead of the lump sum.

Roughly 98 percent of all lottery winners ignore this advice, but I continue to preach the mantra. Taking the payments over time allows you to adjust, with the money coming in on a gradual basis. If you make mistakes and lose all your money the first few years, you have 24 more opportunities to get it right. There are also some tax advantages to taking the money over time, as you are taxed on the money as you receive it. That may not be relevant with $100 million, as you are always going to be in the highest tax bracket, but a person who gets $1 million and takes $50,000 a year might be able to save overall.

5. Give back to society.

There are many people who have accumulated great wealth, like Rockefeller and Carnegie in the 20th century and Bill Gates and Warren Buffett in this century, who are giving away most of their money during their lifetimes. People who use their wealth to make an impact on society are far happier than those who use it to show off to the neighbors.

Don McNay, a financial consultant and award-winning writer, is an expert on managing money and one of the world's leading authorities on how lottery winners handle their winnings.
His syndicated financial column appears regularly in The Huffington Post and in hundreds of publication worldwide. McNay also has appeared in several hundred television and radio programs, including CBS Morning News, CBS Evening News with Katie Couric, ABC News Radio, BBC News, KPCC- Los Angeles, WLW-AM-Cincinnati, Al Jazeera-English, CBC Television (Canada), CTV (Canada) and Radio Live (New Zealand).

His insight has been sought by hundreds of print publications, including the Los Angeles Times, USA Today and Forbes.