There's nothing wrong with dreaming you've won the lotto, until you actually win, and reality hits. The underlying question for the lucky winner is, what the hell are you going to do with all that money, besides swim in it like Scrooge McDuck from the defunct Disney cartoon Ducktails?
Well, whatever you choose to do with your earnings (if you win), please keep these 10 gems of advice from past lotto winners, and research studies, in your back pocket. It may help you to keep things into perspective down the road.
1. It's a hustle.
I hate being the one to piss on your parade, but the truth is that the lotto industry loves taking your money in exchange for a pipe dream. Back in May, The Atlantic reported that the lottery industry racked up more than $70 billion in sales in more than 43 states where the drawing is legal.
...According to the North American Association of State and Provincial Lotteries, lotteries took in $70.1 billion in sales in the 2014 fiscal year. That's more than Americans in all 50 states spent on sports tickets, books, video games, movie tickets, and recorded music sales.
And that's not the only shocking part of their billion-dollar hustle. The Atlantic also reported that a North Carolina report from NC Policy Watch stated that of 20 counties with poverty rates above 20 percent, 18 had lottery sales that topped the statewide average of $200 per adult. In other words, the lottery preys on the poor.
North Carolina is only one state used in this example, but do yourselves a favor, and go to a convenience store in a well-to-do neighborhood, and count how many advertisements you see for the lottery. It probably won't be that many around.
2. Rich people still won't like you.
One writer with Reader's Digest recounted how she invited her new, rich neighbors to a Fourth of July barbecue. She later found out the hard way that her generous invite was all in vain.
After we won and moved into an exclusive neighborhood, we planned a huge Fourth of July party and invited all our neighbors. None of them came—they thought we didn't earn our money.
3. Think you're going to divorce your bae if you win? Think again!
One lotto winner tried to keep her jackpot earnings a secret from her husband, and let's just say things didn't end in her favor. According to PopSugar:
Thomas and Denise Rossi were married for 25 years without any marital issues. Then, out of the blue, she asked for a divorce. Little did her husband know that days before filing, she had won $1.3 million, a secret she kept throughout the divorce proceedings. Once the truth came out, a judge found her guilty of violating California's disclosures law and awarded the entire winnings to her ex-husband.
4. Count the number of times you've been struck by lightning twice, and those are your odds of winning.
I know it sucks reading it, but it's true. According to FiveThirtyEight.com writer, and all around math nerd, Walter Hickey:
...Lastly, from the point of view of state revenue, this totally justifies the October change that lowered the odds of winning from 1 in 175 million to 1 in 292 million. (You are vastly more likely to get struck by lightning twice in your lifetime.)
5. OMG! Taxes, ugh!
Don't be so quick to say you're a billionaire if you hit the jackpot. That money has to be taxed! According to Powerball's website:
A winner would have the option of being paid $1.3 billion through annual payments over 29 years or opting for one $806 million cash payment. But 39.6 percent of the lump sum would go to federal income taxes.
By the way, virtually no one has taken the annual payments. Just putting that out there.
6. Please skip out on your squad.
If you truly expect to hit the jackpot, I would advise you to start listening to Drake's music, and pronto. "No New Friends" will be your new theme song when you hit big, because your squad is going to step to you with their hands out, and their pockets empty--and that gets old. 24/7 Wall Street advises:
Taking you and your favorite 50 people on a luxury cruise around the world can become very expensive, very fast. Having an entourage generally only works for people who keep making more money, and entourages have bankrupted many musicians and athletes.
7. Hitting the jackpot doesn't always mean financial security.
This may be a tough pill for many to swallow. In a 2011 study, researchers from the University of Kentucky, University of Pittsburgh, and Vanderbilt University examined whether winning the lotto would lead to permanent financial security. Let's just say that the more cash you win, the more likely you are to file for bankruptcy.
Relatively large winners, who received between $50,000 and $150,000, were just as likely to file for bankruptcy after several years, than small winners of $1,000 or so — the control group. Plenty of winners, in other words, spent all that they won — and then some. Relatively big winnings merely delayed bankruptcy for many of these people, the authors said.
What's even more sad was that another study found that lotto winners spent all of their earnings within five years.
8. Don't quit your day job, and don't hook your mama up with a new crib.
When you hit the lotto, everyone and their mama, including yours, is going to expect you to hook them up with some dough. Wrong move! In report from AZ Central:
"It's tempting for a lottery winner to quit his or her job or immediately splurge on a mansion or other large purchase — don't," advises Chicago securities attorney Andrew Stoltmann. "The worst decisions made by lottery winners are usually the first few decisions."
9. Trust no one, not even charities.
As if you didn't have enough problems in your life, criminals will see you as an easy target once you hit the lotto. Many newly minted ballers have fallen victim to charity scams, which ended in them losing a lot of money, and possibly their religion, in the process.
But more sadly, being murdered for your cash is a very scary, and real, possibility. That's exactly what happened to one generous lotto winner, who died at the hands of a greedy "new friend."
The story of Abraham Shakespeare is a truly tragic one. The Florida man had dropped out of school in seventh grade and could not read. At the age of 40, he won the $30 million jackpot. After he won, he couldn't say no to those who asked for money, even letting homeless people live in his home. That trust could have been his downfall. After Dorice Donegan "Dee-Dee" Moore "befriended" Abraham, he went missing. He was eventually found buried in a concrete slab at the home of Moore's boyfriend, and she was convicted of his murder.
10. You may be a lot happier being broke.
I know you read that sentence and thought I was crazy for writing it, but it's true. When Biggie said "Mo Money, Mo Problems," he meant it. Take it from William "Bud" Post, an Oil City, Pennsylvania man who hit the a $16.2 million jackpot in 1988, then immediately wished he never did.
"Everybody dreams of winning money, but nobody realizes the nightmares that come out of the woodwork, or the problems."For Post, who died in 2006, there were a lot of problems: a landlady who forced him to give her a third of his jackpot, a brother who hired a hit-man to kill him and his sixth wife, an assault conviction — just to name a few.
"I was much happier when I was broke," he once said.
Besides, people who make time a priority in their lives are much happier people.
"People who prioritize time over money make more effort to invest in activities that are expected to generate a more stable sense of happiness or enjoyment, such as developing strong social relationships, finding enjoyable hobbies and exercising," Gary Buffone, a psychologist and expert on happiness and money, told TODAY in response to the findings
HERE'S SOME ADVICE
If you do happen to win the lotto, take billionaire entrepreneur, and Shark Tank judge, Mark Cuban's advice. He knows a thing or two about handling lots of money, and had this to say to the next jackpot winner.
Hire a tax attorney first. And don't take the lump sum. You don't want to blow it all in one spot. If you weren't happy yesterday you won't be happy tomorrow. It's money. It's not happiness. If you were happy yesterday, you are going to be a lot happier tomorrow. It's money. Life gets easier when you don't have to worry about the bills.
Tell all your friends and relatives no. They will ask. Tell them no. If you are close to them, you already know who needs help and what they need. Feel free to help SOME, but talk to your accountant before you do anything and remember this, no one needs 1m dollars for anything. No one needs 100k for anything. Anyone who asks is not your friend.
You don't become a smart investor when you win the lottery. Don't make investments. You can put it in the bank and live comfortably. Forever. You will sleep a lot better knowing you won't lose money.
Even though this news seems awful, it shouldn't stop you from playing the Powerball. Just remember to play, and live, responsibly. Just saying.
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