5 things you should do if you win the lottery

You've always dreamed of escaping the rat race by winning the lottery, but do you know what to do with the cash when you get it? Here are a few things you should consider if you win.

2 smart things to do if you win the lottery
Every week millions of dollars are up for grabs in Canada's various lotteries. And while our jackpots won't get as high as America's Mega Millions lottery did at the end of March -- three tickets split $656 million -- our Lotto Max draws do regularly hit $50 million.

Everyone dreams of winning, but would you know what to do with that cash if your numbers were actually drawn? Yes, you'd go on that trip around the world, but many lottery winners then buy cars, homes and other pricey things on top of that initial splurge. It might be hard to fathom, but even $50 million can run out.

If you're lucky enough to win the lottery, here are five things you should actually do with that money.

1. Use a high-interest savings account

While you have a year to claim your winnings, it could still take a while to sort out what to do with that money. When you get your cheque, consider putting the cash into a high-interest savings account. While interest rates are low today, even a rate of one per cent on millions can generate more cash than most people make after years of working. (Though admittedly you do have to pay tax on the earnings.)

2. Invest in dividend-paying stocks

Imagine if that lottery win could last generations. It really can, if you invest wisely. Consider putting your money into dividend-paying businesses. These companies pay shareholders a set amount every quarter or year. Average Canadians usually buy these stocks so they can get a reliable income in retirement. A lottery winner could make even more millions this way.

But don't invest in a risky business -- many bank stocks pay a five per cent annual yield, which is more than enough to make your money last, and the risk of them going bankrupt is minuscule.

Page 1 of 2 -- Check out three more essential things to do if you win the lottery on page 2

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