The five things to do after you win the lottery


By: Olivia Glauberzon, Special to the Star, Published on Tue Jan 26 2016

When it comes to buying lottery tickets like ones this month’s $1.5 billion Powerball, players put plenty of thought into picking their numbers. But how much goes into the plan if they actually win?

In 2001, Vicki Damant was close to the dream that many lottery players have: second place to the jackpot. A Torontonian living in the U.S. at the time, to her shock, her ticket had five of the six winning numbers.

lottery“It was 7:30 a.m. on a Sunday morning. When I check the numbers on the computer, I had one match, then another, then another . . . then I started screaming,” says Damant. “I was so loud that my husband came running into the room thinking he had to kill a spider.”

While the couple hadn’t won in the millions, Damant did win $103,682 (before tax, as it was a U.S. lottery; in Canada, lotto winnings aren’t taxed as income).

“That’s when we started making all of our phone calls,” she says. “It wasn’t a life-altering amount of money, but it was enough that we were able to buy ourselves new cars, invest in an annuity and send both of our parents on vacation.”

Whether you’ve won a modest amount like Damant or $528 million (U.S.) like one Tennessee couple this month, here’s what the financial experts say you should do next:

1. Cool off for 30 days

That’s the suggestion of Larry Moser, regional manager with BMO Investor Line, based in Ottawa: “You don’t want to start writing cheques before you have a chance to figure out how you want to spend your prize.”

Since most lotteries are required to make the winners’ names public, the prize announcement (depending on its size) can wreak havoc on your personal life. “All sorts of people are going to come out of the woodwork. I’ve even heard of people getting blackmailed,” says Moser. “You need to be prepared for how you’ll handle various situations.”

A cooling-off period also gives you time to reflect on how the winnings will add to your happiness, says Ted Rechtshaffen, president and CEO, TriDelta Financial, a Toronto-based independent financial planning firm. “Whether you’ve won $500,000 or $500 million, it’s not about the investments you make, it’s about how the money helps your lifestyle going forward.”

Rechtshaffen recommends using the old adage of “Spend $1, save $1 and give $1” to allocate the winnings to your personal and financial goals. Just be warned, adds Rechtshaffen, that deciding how much you want to spend, save and give can be a complex psychological and emotional undertaking. “You may want to talk to a psychologist before doing anything else . . . that could be the best investment with your winnings you’ll ever make.”

2. Get professional help

Once you’ve figured out how to divvy up your winnings, find a lawyer or financial advisor who can help structure a financial plan for you.

“Whatever you do, don’t go flipping through the phone book and call the first lawyer or investment advisor you see,” says Moser. “Ask your friends and family for someone they recommend and trust.”

Another way to screen for a good advisor is by noting the balance of personal versus financial questions he or she asks you. “The best advisors will always spend more time figuring out who you are as a person before structuring a plan,” says Rechtshaffen.

3. Calculate your income needs

Depending on how much you’ve won, you may decide to stop working or splurge on a big-ticket item like a house, trip or boat.

Just don’t blow all of your winnings on one big trip to Vegas, says Moser. “Every dollar you spend today is less you have to invest for tomorrow.”

A financial plan will help you determine how much money you need to maintain the lifestyle you want to lead without working, especially if it includes a larger home or second property with bigger annual expenses.

4. Sort out your give-aways

Decide how much money you’ll give away to charity, family and friends. Like Damant, it’s not uncommon to want to share your newfound fortune with family and friends, or your favourite charity.

“With family and friends, one idea might be to share your good fortune in the form of a one-time only gift,” says Rechtshaffen. “If you are disciplined about it, you will be less vulnerable to being asked for money down the road.”

For charities, giving can be complex depending on the amount of the donation.

If you are planning to donate over $5 million, Rechtshaffen recommends setting up a private charitable foundation. “By donating through a foundation, you have an ability to generate large tax credits you can use to offset any investment income you may have.”

If you want your foundation to continue donating long after you are gone, Moser says it’s also critical to hire an estate lawyer for the set-up. “You won’t be able to set this up yourself with a $29.99 kit you buy at a store.”

5. Invest tax efficiently

Once you’ve determined how much money you’ll need for your lifestyle and how much you can part with, chances are the amount left over may be too much to place in a registered savings account. This leaves your wealth in unregistered territory, which makes minimizing tax exposure on income-generating investments a priority.

Investments can range from a diverse equity portfolio — which takes into account your risk tolerance — to a permanent life insurance policy, which allows you to grow your money tax-free.

“An advisor will help you navigate your investment options and do so in a way that minimizes your tax exposure,” adds Rechtshaffen.

Buying Bread Boggles The Mind


When you went to the supermarket recently did you wonder what has happened in our bread aisle, loaf upon loaf upon loaf now greet us, what used to be a simple task has now turned into a mammoth mission involving a lot of patience, concentration and a good pair of reading glasses. It’s hard to tell what is good for you and has the most nutrition.

To help you along here is what you need to know:

What is the difference between whole grain, whole wheat and Multigrain:

Whole grain has the entire kernel of the grain from the bran to the endosperm to the germ. Whole grain flour is not refined and therefore maintains its full nutritional value.

Whole wheat has the bran and the germ removed during the refining process and is left containing only the endosperm. Unfortunately, the majority of vitamins and fiber are contained in the wheat bran and wheat germ that is shed during the refining process. Whole wheat flour has half of the nutrients stripped away during the refining process.

breadMultigrain bread is bread that is made with more than one type of grain. Multiple grain products can be made in any fashion, including bleaching and starching and using the less nutritious part of the grain. This product maybe refined which means the healthy parts, such as the germ and bran are removed and the grain is enriched with chemicals and bleached. Don’t be quick to assume that multigrain products are healthy products. We know they can be made in multiple fashions, and could contain as much refined grains that are devoid of nutrition as the basic bleached white flour. You can’t even assume that at least your getting some grains and their nutrients, because you may only be getting as few as two different grains. And, if the grains are refined, they’ll be lacking in original nutrients and fiber.

Next time you are at the supermarket here is what you need to look for:

  • Don’t forget the 100% rule, First ingredient should be 100% whole grain. By law the ingredients must be listed in descending order, by how much they weigh in the product. This means that the first ingredient is the most prevalent ingredient in the product.
  • Low or no sugar. Sugar is not great in any diet, as someone I know used to call it “white death”. Sugar is high in calories which can cause you to gain weight. Sugar suppresses the immune system and also raises insulin levels.
  • High in fiber. Research has shown a diet adequate in fiber may reduce the risk of cardiovascular disease, type 2 diabetes and constipation. It is a safe and natural way to keep your blood sugar levels and cholesterol within a normal range.

So remember when you are out shopping:

100% whole grain, no sugar and high fiber at the top of the ingredients list, and don’t even think about that white loaf.

Good luck shopping.

Anton Tucker
Written By:
Anton Tucker, CFP, FMA, CSA, FCSI
Executive VP
(905) 330-7448