It almost seems hard to imagine that this is possible, but we have another rare instance in the lottery world where two lotteries combined are approaching the $1 billion mark in potential winnings in 2018. There are a $455 million Powerball lottery and a $345 million Mega Millions lottery — that’s $800 million that could be won this weekend!
The $455 million Powerball annuity value for Friday night’s drawing translates to a cash value of $269.4 million for the lump sum. And the Mega Millions $345 million annuity value for Saturday night’s drawing translates to a $205 million cash value for the winner who chooses a lump sum payment.
Playing the lottery has become the new American Dream. The old version of the American Dream was a lifetime of achievement and advancement through years of hard work, including years and years of savings and responsibility, all adding up to being able to have a comfortable life in your advanced years. But winning the lottery is means you get it all right now, with no hard work and no qualifications needed other than ability to buy a lottery ticket. The reality is that multigenerational empire-building money is at stake here.
While the odds of winning the lottery are actually lower than being struck by lightning on a mostly sunny day, the allure of becoming vastly wealthy in an instant makes the lottery irresistible to millions of Americans.
Unfortunately, there is a dark side to winning the lottery. Many lottery winners somehow manage to go broke. Some winners even go broke in just a few years. 24/7 Wall St. does not want to see anyone go broke after making it big. We have created a self-help guide here: the 12 things not to do if you ever win the lottery.
It probably seems hard to imagine that a sum of $100 million, $200 million, $300 million or even $500 million can be blown in a lifetime. It’s actually quite simple, and the foolish lottery winners who take no warnings to heart could up broke in just months or a few short years. Can you imagine the ridicule you would have to endure from your friends and family if you went from being instantly a member of being the super-rich back to being middle class or a plebe?
The tools for what not to do if you win the lottery also can be applied to anyone who comes into fast and unexpected wealth. That could come from a business sale, an asset sale, an unexpected inheritance or a legal judgment, or even be applicable to those who become stock-options millionaires.
The odds of becoming wealthy are stacked against you. That’s what you keep hearing from the media and politicians. So if you do manage to become wealthy, take the precautions that would keep you from losing it all. No one should ever have to get rich twice.
Endless things can be purchased with vast wealth. Those things, followed by poor decisions, friends and family, predators, and ongoing costs and other considerations that many people ignore can rapidly drain away anyone’s new wealth. There are also people who would without consideration do harm to those coming into instant wealth if they could benefit from it. Some people who come into instant wealth, including some “unlucky” lottery winners, have literally lost their lives. Never forget that bragging about getting filthy rich could ultimately get you killed.
Most lottery winners choose to take the lump sum cash option to have instant and vast wealth rather than to get paid out over a lifetime. It’s easy to understand why. This makes getting a financial plan, setting a budget and understanding taxes and the world of finance become imperative for anyone coming into wealth. Again, it’s just too easy to blow through a vast fortune.
Add up the cost of buying mega-mansions and yachts, private jets and luxury cars, as well as the cost of lavish vacations. Then think about the cost of fine art and collectibles, antique cars and the best jewelry money can buy. What about renting out or buying private islands or taking your entire cadre on a lavish cruise? And why not throw in a private concert from your favorite music performers? The costs can be massive, and ongoing costs of insurance, personnel costs, security and taxes will keep draining your money.