Maybe the election is over and maybe we all have to get back to work. What is not over is that the current Powerball jackpot has reached a massive $320 million. Maybe this is a lower amount at $202 million for the cash value lump-sum payment, but either way it is empire making money that can create multi-generational wealth.
With the drawing set for Saturday, November 19, the reality is that the would-be winner, or winners, better have a game plan down in short order. It is one thing to know what to do. It is as important, or even more important, for a lottery winner to know what not do!
24/7 Wall St. has created a guide for lottery winners, which is also the same path for anyone who unexpectedly comes into vast wealth. That might be from a legal settlement, a business or asset sale or from that relative or friend who unexpectedly left you a fortune. This is the 12 Things Not to Do If You Win the Lottery.
It is obvious that the American Dream has moved from a life of hard work and having a comfortable life to winning the lottery. After all, getting millions and millions of dollars in hand immediately sure sounds a lot more fun than working hard and being responsible. And then there is the notion that the media and politicians keep telling you that it is just too hard these days to get ahead and live well.
Whether you are talking about $320 million paid out over a lifetime or a lump sum of $202 million, this lottery winner needs to understand there are pitfalls that must be avoided at all costs. Many lottery winners have gone broke. Some have even gone broke in a short time. 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. Even after the discount and then having to pay the super-high tax bills, the reality is that $200 million or $300 million is more money than most people can imagine making in their lifetimes.
24/7 Wall St. does not want anyone who attains new wealth to go broke. There will be many temptations waiting ahead that are too much for some people to handle. And it is easy to blow through vast sums these days. You can rather easily spend $100 million to $200 million in a period of weeks or months if you choose to. A lack of planning and refusing to live within reasonable limits have to be prevented at all costs.
Family relationships and friendships are going to be tested by instant and vast wealth. Bragging about getting super rich may even get you killed. Thinking that financial advice and tax advice are not needed will wreck those who do not treat their wealth with care and caution. Living on a budget is crucial. Winning the lottery certainly does not make anyone smarter about money overnight.
If any or all of these points sound silly, then understand one simple thing: You are at severe risk of going broke after becoming filthy rich.
Some simple math can spell all of this out. Add up the cost of private jets and yachts, mega-mansions, and lavish vacations for the rich and famous. Why not get a private island too? And throw in an entourage, and then think of all the insurance and security you will need to protect yourself and your vast collections. Art auctions, the best jewelry and luxury items, and vintage car collections are not cheap. Any combination of just a few of these can easily wreck your vast sum of wealth.
Hopefully reality is setting in 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. Keep in mind that you should only have to become rich once.
Here are the 12 things not to do if you win the lottery.