It is no secret that winning the lottery has become the new version of the American Dream. While the odds of winning are lower than the odds of being struck by lightning on a sunny day, it’s easy to see what is drawing so many people each week to buy lottery tickets. The Powerball lottery drawing for Wednesday, October 24 is now up to $620 million for the estimated jackpot, or $354.3 million in cash value of $199 million. If you think that’s just too large to imagine, guess again. The Mega Millions drawing set for Tuesday, October 23 has now ballooned to an unthinkable $1.6 billion. The cash option for the Mega Millions now sits at $904 million.
All in, this represents a whopping $2.2 billion up for grabs for those who take the payout over time. The combined cash values here are now over $1.25 billion. Either one of these lottery drawings is enough to make many new filthy rich people. While the cash payout options are always lower on the lump-sum, either one of these lotteries is instant empire-making money and should easily create multi-generational wealth.
That old boring version of the American Dream requires a lifetime of hard work, planning and advancing in careers without much distraction. Winning the lottery changes all that in an instant and without the need for any skills at all. There’s no hard work required and no qualifications are needed other than buying a ticket.
There is a dark side to winning the lottery. Many lottery winners somehow manage to broke after becoming vastly wealthy. And even worse, some have gone broke in just a few years. It seems unlikely that someone who wins over $900 million might actually go broke any time soon, but there are continued risks in the years ahead and for future generations.
24/7 Wall St. does not want to see anyone go broke. That’s why we have created a self-help guide of 12 things not do if you win the lottery.
It’s imperative to have a game-plan in place for if you ever become filthy rich in an instant. These lessons do not have to be only for lottery winners. They can be applied to those who unexpectedly inherit millions of dollars or win a big legal judgment, to business owners who sell their companies for millions of dollars, and even for stock-option millionaires. Keeping a lifetime of wealth requires extensive planning, and it also requires some sacrifices.
One lesson should hold true no matter where or how you grew up: No one should ever have to get rich twice. Lottery winners have to act fast, and they need to avoid the ceaseless temptations that can rob unwitting people of their newfound wealth.
Purchasing a countless number of belongings, cars and homes can erode your wealth in a hurry. And then having to keep paying for upkeep and maintenance of those things, followed by poor decisions and falling under the influence of friends and family, are just some of the pitfalls for those who become vastly wealthy. There are also predators and other considerations that must be avoided at all costs. If people you know find out that you just became filthy rich, you could become a mark and a target. It’s sad to say, but some unlucky lottery winners have lost their lives after winning lotteries. Bragging about getting filthy rich could get you killed.
Most lottery winners will take a lump sum cash option to have instant and vast wealth rather than to get paid out over a lifetime. It’s actually easy to understand why. It’s an instant empire-making sum without any wait at all. Spending lavishly is a sure way to go broke. That’s true whether it’s $100 million, $500 million or even $1 billion. There are just so many ways to broke once you start having price tags where everything has a three-comma cost to it. And it’s not just the yachts and the jets and the homes. What can nail anyone is the upkeep costs, the cost of the people needed to maintain them, the insurance and the occasional calamity.
All this glitz and glam will require immediate financial planning, budgeting, learning about taxes and investments, and a slew of other actions for anyone who comes into wealth to keep their newfound fortune. If this seems ludicrous, go ask the many well-known movie stars and musicians who have risen from nothing into the stratosphere and slid back down to being broke. Please, by all means, do not let this happen to you. It’s hard enough to get rich as is. And just imagine the ridicule you would have to endure from your friends and family if you went from being filthy rich in an instant to being penniless all over again. Once more: no one should ever have to get rich twice.
Take this one lesson to heart: If it sounds silly that you need to set up a strict financial plan and if it sounds silly that you need to put up safeguards to protect your new empire-money, then you are already at severe risk of going broke if you ever become filthy rich.
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