You may have heard the notion that the American Dream is dead. A lifetime of hard work and planning and being financially responsible is just too much for many people to endure these days. And the media and politicians keep telling you that it’s just too hard to get ahead now. That isn’t quite true, but what that American Dream is has certainly changed over time. The new version of the American Dream is winning the lottery. After all, why endure a lifetime of struggle when you can become filthy rich overnight with wealth beyond your imagination?
Now we have a unique situation in the world of lotteries that should add fuel to the fire for the new American Dream and the people chasing it. Two U.S. lotteries with values of more than $300 million are up for grabs. The Powerball lottery has a $307 million annuity value, or a $193.2 million cash value for those who choose the lump sum. And the Mega Millions lottery now has a $382 million annuity value, or a $238 million cash value for the lump sum payment. The Mega Millions lottery is Friday, August 11, and its jackpot has been rolling for 14 weeks since it was last won on April 28. And the Powerball’s next drawing is Wednesday, August 9.
Whether lottery winners take the annuity payment or the all-cash payment, both of these are such vast sums of money that they can create multi-generational empire money. While it is easy to get wrapped up in what you would want to do if you won such a vast sum, it’s real easy to forget that there are some things that you would need to do to protect yourself. Perhaps more importantly, there are 12 things you should not do if you ever win the lottery.
24/7 Wall St. has created a guide for lottery winners. This can also be used for anyone who comes into money via an unexpected inheritance, a settlement, a suit or the sale of a business. Sadly, many lottery winners have gone broke in just a few a few years after winning the lottery. Any lottery winner better have an idea ahead of time about what they should do — and not do — if they are lucky enough to win.
This is the 12 Things Not to Do If You Win the Lottery.
There are some serious pitfalls that lottery winners must avoid at all costs. After all, with extreme wealth comes extreme responsibility. Most lottery winners will choose to take the cash lump sum option rather than the annuity payout over 20 years. The reason is that it is vast and instant wealth and more money than almost everyone can imagine making in their lifetimes. Still, even this choice needs consideration.
24/7 Wall St. does not want to see anyone who attains new wealth suddenly go broke. But there are many temptations waiting the newly rich that often seem too tempting. Some temptations prove to just be too much for some people to handle.
This may seem hard to imagine, but these days it’s easy to blow through vast sums of money. You can easily spend $100 million, $200 million or even $500 million if you want to and if you allow all those new temptations to eat away at you. A lack of planning and refusing to live within reasonable limits have to be prevented above everything else.
Lottery winners should assume right at the start that their family relationships and friendships will be tested by such instant and vast wealth. And this is no joke, but bragging about getting super-rich could even cost you your life. Thinking that financial and tax advice are not needed will wreck you. Thinking you don’t need a budget for your wealth over a lifetime is a recipe for disaster.
Again, no one who gets super-rich should ever have to worry about heading back to the poor house. But there is one thing that needs to be considered here: If any or all these points sound silly, then the key lesson to take home is that you are already at severe risk of going broke if you ever become filthy rich in a short time.