The American Dream has changed. Your parents and grandparents believed the American Dream was becoming successful and comfortable through a lifetime of hard work and savings. The new version of the American Dream has become winning the lottery, where anyone can go from rags to riches instantly and without any qualifications other than buying a lottery ticket. And 2018 is starting the year off with a very odd set of circumstances: the Powerball lottery jackpot has risen to a whopping $440 million, and the Mega Millions lottery jackpot has risen to $343 million.
Winning either lottery would easily make for the best New Year’s gift anyone could imagine. The massive Powerball drawing will be Wednesday night, and the “smaller” Mega Millions drawing will be on Tuesday night.
It may seem odd that lotteries are so enthralling to the public due to how incredibly low the odds are against winning. Still, the combined winnings of $743 million between the two is a very rare instance in the world of lotteries. And the public is constantly reminded by politicians and the media that it’s just too hard to get rich the old-fashioned way with hard work and years of saving and planning.
The Mega Millions jackpot of $343 million is the annuity value, but the cash lump sum payout is $215 million. The Powerball drawing’s annuity value of $440 million has a lump sum cash payment option of $278.3 million. It doesn’t matter which lottery is won, and it doesn’t matter which payout option the winners choose. This is enough money to create multi-generational empire wealth.
Unfortunately, there is a dark side to winning the lottery. Many winners somehow end up broke, and some of those boom-bust winners go broke in just a few years. It is for this reason that 24/7 Wall St. has created a self-help guide for lottery winners. This is a list of 12 things you should not do if you ever win the lottery.
It may seem impossible to blow through $100 million, $200 million or even $300 million. Guess again. Those winners who do not make immediate plans and set protections in place are on the path of going broke. Who wants to go from rags to riches, only to go back to rags or mediocrity? The adage to consider here is that no one should ever have to get rich twice.
While the things not to do pertains first to lottery winners, they can easily be applied to anyone who comes into fast and unexpected wealth. That could be from an unexpected inheritance, the sale of a business, a legal judgment, or even becoming a stock-options millionaire.
There are literally endless and limitless opportunities for what lottery winners can buy. There are numerous ways to overcommit. And there are many tricks and crooks that are out there just waiting to pry away money from those who take no precautions and set up safeguards to protect their newfound wealth.
The pitfalls coming the way of lottery winners have to be avoided at all costs. Sadly, some of those pitfalls may come directly from friends and family. Other pitfalls may come from acquaintances, and others from those who intend to do harm. It may sound like a joke, but it is no joke at all that your life may depend on taking quick action and having a plan in place if you win the lottery.
Most lottery winners choose to take the cash lump sum option. This is instant wealth, rather than waiting for a few million each year for the annuity payout. It turns out that vast and instant wealth is just more enticing than taking a multi-million paycheck each year.
Lottery winners need to assume that their family relationships and friendships will be tested immediately and over time after winning the lottery. Bragging about getting filthy rich could even get you killed. Getting a financial plan and tax advice have to be followed with setting up a realistic a budget.
Again, it’s rather easy these days to quickly blow through $100 million, $200 million or even $500 million in a short time. Just add up the costs of buying mega-mansions, yachts, private jets, luxury cars, lavish vacations, art and jewelry. Then think about private islands, taking everyone you know on a luxury cruise and endless other temptations. Buying and paying for these is expensive enough, but now think about insurance, personnel costs, security, and taxes on all these belongings.
Now listen closely here if any of these points about being responsible and setting up a plan to protect yourself from the temptations after becoming filthy rich sound silly. If that is so, then you are already at severe risk of going broke if you ever suddenly become filthy rich.