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.

3 smart things to do if you win the lottery
3. Buy your dream house in cash

If you win the lottery, there's no way you won't upgrade your living conditions. Don't go crazy, of course -- think twice before buying a $20 million abode -- but if you want to spend a couple million on a new place, then go for it. But do pay in cash. Otherwise, you'll be locked into a mortgage and either you'll have to pay part of your winnings to the bank in interest or, if you end up wanting to break the mortgage, you'll owe a hefty penalty. Fork the entire amount over and never worry about a mortgage payment again.

4. Set up a donor-advised fund
Rather than simply cutting some cheques to your favourite charities, go to your bank and set up a donor-advised fund. You'll still be able to donate that money to whomever you want, but the financial institution will grow your dough in the markets so that you'll always have cash to give to people in need.

You could also set up a charitable foundation, but then you'll have to do all the accounting and administration work yourself. With a donor-advised fund, the financial institution takes care of all the tedious paperwork.

5. Spend, but not too much

Of course, you should take some of that cash and buy something nice for yourself, but don't overdo it. Make sure you talk to a financial professional -- one that deals with high net-worth clients -- who can help you spend that money wisely.

Follow this advice and it'll be difficult to blow through all those millions. If you don't plan properly and invest prudently, though, you may find yourself back at the lottery kiosk sooner than you think.

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