If I Win the Lottery, Here’s How I’ll Spend My Millions


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My plan for a winning lottery ticket would ensure I’m taken care of for life.


Key points

  • Winning millions in the lottery isn’t very likely.
  • I still have a plan for what I would do if I win big.
  • I’d use the money to make sure I was set up for life.

When I was growing up, I always heard the lottery slogan that all you need is a dollar and a dream. The reality is, the odds of winning the lottery are not very good, but it’s still fun to play if for no other reason than it gives you a chance to fantasize about what you’d do with the cash.

While I used to fantasize about all sorts of crazy purchases when buying lottery tickets in my younger days, I now have a much more solid plan for what I’d do with my millions if I won big. Here’s where I would spend my cash should my lottery ticket end up paying off.

1. Max out my tax-advantaged accounts

The first thing I’ll do after winning the lottery is max out tax-advantaged investment accounts that I am eligible to contribute to such as a solo 401(k) and an HSA. Investing as much as possible in accounts that provide upfront tax breaks for contributions will be important because my tax rate will be much higher after becoming a lottery winner.

2. Invest enough in a taxable brokerage account to produce returns that cover my annual costs of living

The tax-advantaged accounts that I will be investing in have contribution limits, so I won’t be able to put all of my lottery winnings into investment accounts offering tax breaks. I wouldn’t want to either, in a large part because most of those accounts come with strings attached. With a 401(k), for example, I can’t take the money out until I reach age 59 1/2, so I don’t want to tie up all of my lottery winnings for decades.

Once I’ve maxed out my tax-advantaged accounts, the next thing I will do is deposit a substantial amount of money in a taxable account with a brokerage firm that offers a good selection of commission-free ETFs.

Specifically, I will invest enough money in the account that I could live on my average annual returns. So, to take a very simple example, say I needed $100,000 per year to pay my desired expenses and I anticipated my investment account would safely earn me returns of around 6% annually. I would invest around $1.6 million as this would produce average annual returns of $99,960 so I could live off the returns alone without touching my principal balance.

Making this type of investment would ensure that I would never have to work again if I didn’t want to. My investment would never run out because I wouldn’t touch the principal, and the returns alone would be able to support me.

3. Pay off my mortgage

The next thing I would do is pay off my mortgage so I owned my home free and clear. My mortgage is my only debt and if I was able to eliminate it entirely, then I wouldn’t have to worry about giving any of my hard-earned money to creditors ever again.

4. Set up a charitable foundation

Finally, if I had any money left over, I would set up a foundation to do charity work with animals since this is something I’m passionate about, and I don’t need tens of millions of dollars for any extravagant purchases as I tend to feel that owning a lot of stuff can become a burden.

The good news is, I don’t necessarily have to win the lottery to accomplish all these goals — although it would be nice. With responsible saving, I can do these things over time anyway and so can most people. So don’t count on a lottery win to achieve your dreams — create a plan to make it happen on your own.

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