You Just Won the Lottery? Avoid These 4 Mistakes

Winning the lottery will, without a doubt, change your life. The real question is whether that change will be for the better or the worse, and that often comes down to the decisions you make in the first six months.

I’m privileged to work with four wonderful families who’ve won the lottery, each of whom have successfully navigated the life-changing experience of an eight-figure windfall. That experience puts me in a unique position to offer insight into what you should, and shouldn’t, do if you ever find yourself in a similar situation. I’ve seen the euphoria that lottery wins can initially bring to families, and on the flip side, the stress and strained relationships the win can lead to. The goal of this article is to walk you through what not to do if you’re the person holding the big cheque for the TV cameras one day.

Here’s the thing: money doesn’t magically change who you are, it can just amplify aspects of your character that were already present. If you’re already responsible, thoughtful, and goal-oriented with your money, you’ll probably treat a big win as the responsibility that it is. But if you’re impulsive, financially unprepared, or unable to plan for the future… well, the stakes (and the speed) go up when more money enters the picture.

In my last article “So you just won the lottery: Advice from a family office,’’ I outlined the steps to take when fortune smiles on you. In this article, I’m flipping the script and highlighting the mistakes to avoid so your dream come true doesn’t become a nightmare.

Mistake #1 – Making your lottery win too public

For many lottery winners, the biggest whirlwind isn't seeing a previously unimaginable number in their bank account; it's the attention and publicity that come with the big win. In Ontario, lottery winners are required to have some form of media announcement, which inevitably attracts attention from family, friends, and strangers eager to share in the good fortune.

While you can’t avoid all publicity, you can avoid fanning the flames. Don’t go above and beyond with extra media interviews or big public declarations. Follow the adage of most hockey players and be as boring as possible in the mandatory interviews that you do participate in. The wider your news spreads, the longer you’ll be fending off “opportunities,” and “opportunities” often means someone else’s dream funded by your windfall.

What to do instead:

Before claiming your prize, confide only in those who truly need to know: your immediate family and a core team of professional advisors. Additionally, consider limiting your public profile and eliminating social media to make it harder for others to find your personal information after your win is made public. The goal is to share the news on your terms, leaving the rest of the world to wonder why you suddenly seem more relaxed on Monday mornings.

Mistake #2 – Making Big Life Decisions Without a Financial Plan

One of the biggest mistakes lottery winners make is rushing into permanent life changes without a solid plan and a clear understanding of what they can afford.

Let’s say you and your spouse are 45 years old, and six months ago you won the lottery. In that short time, you’ve both quit your jobs, bought a $3,000,000 house in an upscale neighbourhood, purchased two new cars, moved your children to private school, and started an annual tradition of taking your family and close friends on a two-week vacation to Mexico. This lifestyle can easily cost $350,000 after tax each year.

If you want to maintain that lifestyle for the rest of your lives, and we assume age 95 for financial planning purposes, you would need a starting investment portfolio of approximately $12,000,000 today. That’s based on a 5% return on investments and a 2% annual increase in spending due to inflation. In other words, if this is the life you want to live, make sure your lottery win exceeds $12,000,000 before you start making irreversible changes.

What to do instead:

Hit pause for at least six months (ideally a year) before making big-ticket decisions. Use that time to work with a financial planner to test whether your dream life fits your lottery reality. If it doesn’t, it’s far easier to adjust now than to face the emotional and financial pain of downsizing later.

Mistake #3 – Making Financial Promises You Can’t Keep

For many lottery winners, the biggest emotional challenge isn’t what to do with the money; it’s how the money changes relationships. Winning the lottery can be a deeply isolating experience. Friends and family may treat you differently, not always out of malice, but because their expectations change, sometimes without either of you even realizing it.

If the people closest to you believe they’ll share in your good fortune and that doesn’t happen (or doesn’t happen in the way they hoped), resentment can creep in. Even acts of generosity can be met with disappointment if they don’t match what someone had in mind. And when relationships you’ve relied on for years start to feel strained, it can leave you feeling unmoored at exactly the moment you need a trusted support system.

What to do instead:

Be transparent about your situation. You don’t need to share financial specifics, but it’s important to communicate that you need time to figure out a plan. A simple “we’ve been advised not to make any commitments until we’ve done proper planning” sets a respectful boundary and keeps expectations realistic.

When it comes to requests for money or business investments, lean on your advisors. I’ve personally reviewed countless proposals from friends and family on behalf of the clients we work with. Being a neutral 3rd party allows me to say, “This isn’t the right fit for my client’s portfolio,” while hopefully maintaining the client’s personal relationship with their friend or family member. By relying on your advisors, you can distance yourself from the decision and protect your finances and relationships.

Mistake #4 – Trying to Do It Alone

Sudden wealth is like being dropped into the middle of a foreign country where you don’t speak the language. You might have a guidebook, a translation app, and some good instincts, but without a local guide, you could miss important nuances, make avoidable mistakes, and end up in situations you don’t fully understand until it’s too late.

Yes, we live in a world where you can Google anything, watch investing videos on YouTube, and even ask ChatGPT for financial tips. And while I’m a huge advocate for financial literacy, the reality is that sudden wealth comes with complexities, including tax planning, legal structures, investment strategy, and estate considerations that you can’t master overnight. Considering the size of most lottery wins, the stakes are simply too high to learn solely through trial and error.

What to do instead:

Find your “local guides,” a team of experienced professionals who have helped others navigate sudden wealth before. That typically means:

• A financial planner to chart your route and make sure your money lasts for the entirety of your journey.
• A tax expert to help you avoid hidden traps that could drain your winnings.
• A lawyer to protect your assets and make sure everything is structured properly.
• A family governance or wealth coach to help you manage the human side of wealth, including the values, conversations, and decisions that will shape your legacy.

The right guides won’t take over the trip; you’re still in control of the destination. But they’ll help you avoid wrong turns, spot opportunities you might have missed, and arrive where you want to go without unnecessary detours or expensive mistakes.

The Bottom Line

Winning the lottery is one of the rare moments in life when the rules change overnight. What you do next will shape not just your finances, but your relationships, your lifestyle, and your peace of mind for decades to come.

Use the first six months to slow down, surround yourself with the right people, and make informed decisions. Think of your winnings not just as money, but as the seed of a future you can grow or squander. How you nurture it now will determine whether it becomes a legacy or just a fleeting windfall.