It seems as though the new American Dream has become winning the lottery. After all, this is a chance to go from rags to riches instantly. There are no requirements needed other than simply buying one lottery ticket. Another thing that makes this attractive versus the old American Dream of your parents and grandparents is that no one has to work hard and save money their whole life just to have it easy during the golden years.
There was already a massive lottery tally earlier in 2018, but now there is a repeat of unusual circumstances for lotteries. The Powerball lottery is $420 million in annuity value for the March 14 drawing. And the Mega Millions drawing for March 13 is at a $318 million annuity value. That’s $738 million in combined lotteries up for grabs.
The cash values are of course lower, because this is the lump sum option rather than being paid out over a lifetime. There is a $248.7 million cash value for the Powerball lottery, versus $187 million for the cash option.
In a world where the media and politicians tell the public every day that it’s just too hard to get rich the old-fashioned way with hard work and years of planning, everyone wants to win the lottery. The odds of winning are incredibly low, but the notion of creating an instant multi-generational empire of wealth is too alluring for lottery players to ignore.
Unfortunately, there is a dark side to winning the lottery. Many lottery winners actually manage to go broke. Some of them even go broke in just a few years. 24/7 Wall St. does not want to see anyone go broke, so we have created a self-help guide for lottery winners: 12 Things Not Do If You Ever Win the Lottery.
It may seem impossible that you could literally blow through $100 million, $200 million, $300 million or even $500 million in wealth. It has to seem even more impossible that you can blow through that vast sum in a period of weeks, months or just a few years. In today’s world, it is more than easy to blow through that vast fortune quickly. Lottery winners who do not make immediate plans and who do not put safeguards in place are on the path of going broke.
These tools of what not to do can easily be applied to anyone who comes into fast and unexpected wealth. That could be wealth from a business sale, an unexpected inheritance, a legal judgment, selling a family asset or becoming a stock-options millionaire. It’s already hard to get rich once, so take it to heart that no one should ever have to get rich twice.
An endless number of things that can be bought and endless experiences that can be paid for that can part the newly rich from vast wealth if they have no discipline. And even worse, there are predators and other people who will try to take away all the new wealth of lottery winners or anyone who becomes instantly wealth. Some pitfalls may even come from friends and family, and others will come from acquaintances.
An even worse risk is that there are people who would love to do harm to those coming into instant wealth. It should never be ignored nor forgotten that some people who come into instant wealth have literally lost their lives. Bragging about getting filthy rich could get you killed.
Most lottery winners choose to take the lump sum cash option to have instant and vast wealth. After all, it’s all now and all at once rather than having to wait for paydays again. Getting a financial plan, setting up a budget and understanding taxes and finances will be imperative. Again, it’s just too easy to blow through a vast fortune.
Start adding up the costs of buying mega-mansions and yachts, private jets and luxury cars, and the cost of lavish vacations, fine art and the best jewelry money can buy. Things like owning a private island can drain you, as can buying a luxury cruise for everyone you know or having the top music performers conduct a private concert. Paying for these things is one thing, but the ongoing costs of insurance, personnel costs, security and taxes will keep draining your money.