Be careful in your dealings with friends and family. If everyone knows you're now worth – let's dream big – $100 million because you've won the Powerball Mega Millions jackpot, and your name and face have been splashed on virtually every newspaper and website, it's inevitable that family and friends are going to hit you up for a loan.
You'll have to come up with your own approach, but if someone is asking you for big money, "approach it like you'd approach any other business opportunity," advises Jim Flanagan, a financial advisor and founder of Bentron Financial Group, Inc., in Naperville, Ill. He suggests: "Establish criteria, such as their need to submit a résumé, a business plan and business projections. These are things that are asked for in any business relationship. If the family member or friend is really serious and has their act together, they'll come up with all that stuff. But if they're just blowing smoke, that will become clear pretty quickly."
Another way to look at this approach, Flanagan says, is that if people are always hitting you up for money, "now you are [like] a bank, so you have to think like a banker."
If you're not comfortable saying no or asking for a business plan, Mulhern has an idea: "Have all requests for junkets and loans go through your attorney. You'll be amazed at how few requests you'll receive."
Don't lose your head. That is, do all or at least some of the above. Try to keep your newfound wealth quiet, get financial advice and ease into your wealth. Stay as grounded and safe as possible. Because while money may buy you happiness, it does not guarantee happiness.
Just as you have seen stories in the press of overnight millionaires on their way up, you're likely familiar with the same people on their way down.
There are numerous rags-to-riches-to-rags stories out there, such as the one of William "Bud" Post III, who won $16.2 million in the Pennsylvania lottery in 1988 and had anything but a happy ending. His girlfriend sued him for a portion of the lottery winnings, and a judge agreed with her. His brother, hoping to inherit some of the money, unsuccessfully hired a hit man to kill him. Businesses he started and heavily invested in failed. By the end of his life in 2006, when he was 66, bankrupt and ill, Post owed more than a million dollars. According to the Los Angeles Times, he once called his winnings "the lottery of death."