‘Shark Tank’ star’s tips for handling a lottery win or other financial windfall
Ingram Publishing/Getty Images(NEW YORK) — Mavis Wanczyk, the Massachusetts woman who won the second-largest prize in Powerball history, quickly quit her job at a medical center after learning she won the $758.7 million prize Wednesday night.
Wanczyk, 53, told reporters Thursday that she wants to just “sit back and relax” after her lottery win, which experts say is a good strategy.
“The best thing to do if you win the lottery is do nothing and find advisers that can help you,” Shark Tank star Kevin O’Leary told ABC News. “The key is to invest it so that you live off the interest, the dividends or the capital appreciation.”
In addition to Wanczyk as the sole winner, more than 40 other Powerball players won prizes of $1 million to $2 million in Wednesday’s drawing.
O’Leary said a common mistake by people who receive financial windfalls — whether from the lottery or, more commonly, an inheritance or bonus at work — is that they spend it on “frivolous” things.
“What happens within six years is they’ve lost all the money,” he said. “They’re not experienced in how to manage that kind of capital, and that’s because they tend to invest immediately in things that are frivolous.”
Wanczyk, a mother of two, said during a press conference Thursday that she has no immediate plans for the $336 million she’ll take home after taxes other than to pay off a car she purchased last year.
Wanczyk also made a smart decision, according to O’Leary, in choosing to get a lump-sum payment of her $758.7 million Powerball win.
“Get the cash up front,” O’Leary said. “Why? Because states, in many cases, are technically bankrupt.”
Wanczyk, or any people who receive an unexpected financial windfall, should focus on what they want to accomplish with the money rather than how to spend it, according to psychologist Steven Danish.
“The next important thing is that you develop or have goals and a plan for how you want to proceed,” Danish, a professor at Virginia Commonwealth University who has served as a consultant to lottery winners, told ABC News.
With a plan in mind, the newly rich should spread their money across different banks and investments, O’Leary said.
“You put it across three, maybe four financial institutions, and you let them compete for your business,” he said.
Experts also advise hiring a lawyer and an accountant or financial adviser who can be a point of contact for family, friends and acquaintances who may ask for money.
Wanczyk said Thursday she didn’t think twice about coming forward as the winner so soon.
“I always wanted to do this,” she said. “I wanted it over and done with, so everybody would leave me alone.”
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