The Powerball lottery just keeps on rolling higher and higher this summer. Mega Millions crossed over the $500 million mark in recent weeks, and now we have the Powerball lottery at an annuity value of $390 million. Its discounted lump sum cash value is $270.5 million, and this weekend’s drawing is set for Saturday, July 23, 2016.
It seems evident that the American Dream has moved from a life of hard work and having a comfortable life to winning the lottery. After all, being handed millions upon millions of dollars all at once is just a lot more fun than a lifetime of hard work and living responsibly. And to prove it even more, the media keeps telling you every day that it’s just too hard to get ahead these days by hard work alone.
Whether you are talking about $390 million paid out over a lifetime or a lump sum of $270 million, this is going to be a lottery that creates multi-generational wealth. The winner is also going to need to exercise extreme responsibility. This is why 24/7 Wall St. has created the 12 Things Not to Do If You Win the Lottery.
Most people choose to take the cash lump-sum option. Even after the discount and the high tax bill, this will be more money than most people can imagine.
This is hard to say, but many lottery winners have gone broke shortly after winning the big jackpot. Wanting to buy and consume can be too much for some people, and many lottery winners ignore all the classic warnings about temptations. The reality is that it is quite simple nowadays to blow through $100 million or $200 million in a short time. The real damage comes from a lack of planning and refusing to live within reasonable limits.
Family relationships and friendships may come under pressure. Bragging can get you killed. Thinking that financial and tax advice are not needed will wreck winners, and living within a budget is crucial. Winning the lottery does not make anyone suddenly smarter about money. If these points sound silly, then there is a real good chance you are at risk of going broke after becoming filthy rich.
There are endless temptations that cost a lot to get into and cost a lot to keep up. Is an entourage cheap? What about jets and yachts, mega-mansions and private islands? These are all expensive, and they keep eating cash while you sleep. Multi-million dollar art auctions can go up endlessly, as can the prettiest jewelry in the world. Vintage car collections and buying into a racing team are not cheap. Why not buy a ticket to go into space?
Hopefully this is a reality check here. The entire point behind the 12 Things Not to Do If You Win the Lottery is to keep anyone who becomes suddenly wealthy from going broke. This also would pertain to anyone who unexpectedly inherits millions or anyone who receives a large judgment. 24/7 Wall St. does not want anyone who comes into instant wealth to go broke. Remember this adage: You should only have to become rich once!
Here are the 12 things not to do if you win the lottery.