Friday, March 30, 2018, is already the Good Friday holiday for millions of Americans. Whether Americans are religious or not, millions of them play the lottery. And the Mega Millions lottery drawing on Friday night could make for a really good Friday indeed. The Mega Millions lottery jackpot is now up to $502 million in an annuity value. The cash option, a lump-sum payment, will still pay out $301 million to the grand prize winner.
2018 has been a magical year for large lottery winners. It almost seems hard to imagine that there is already another greater than $500 million lottery.
Playing the lottery has become the new version of the American Dream. That old version was a lifetime of achievement and advancement through years of hard work and savings, and then still being responsible just to have a comfortable life in your later years. Winning the lottery changes all that, and you can get it all now. No hard work needed or qualifications necessary.
Winning a lottery even one-tenth this size is more money than the one-percenters are going to make over their whole lifetime. This actually can come with some huge pitfalls and disappointments. Multi-generational wealth is one thing, but this is empire-building money at stake here.
There is a dark side to winning the lottery. Many lottery winners somehow manage to go broke. And some lucky lottery winners are unlucky enough after winning that they can go broke in just a few years. 24/7 Wall St. does not want to see anyone go broke. That’s why we have created a self-help guide with 12 things not to do if you ever win the lottery.
The odds of winning the major jackpot are roughly one in 302 million. Those odds are actually lower than being struck by lightning on a sunny day. Yet the mere thought of becoming vastly wealthy in an instant makes the lottery irresistible to millions of Americans.
It probably seems hard to imagine that you could burn through $100 million, $200 million, $300 million or even $500 million. And it probably seems even harder to imagine that you could do it in a few years or less. Blowing that much cash is actually quite simple. Foolish lottery winners who take no warnings to heart could end 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 ultra-rich back to being middle class or even back to the poor house? The tools for what not to do if you win the lottery can be applied to anyone who comes into fast and unexpected wealth 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 already stacked against you. There is a reason they call the rich the one-percenters! And the media and politicians keep telling you that it’s too hard to get rich, or even live comfortably in many cases. So if you do manage to become wealthy, it is imperative to take the precautions that would keep you from losing all that money. No one should ever have to get rich twice.
An endless number of 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 and massive wealth. There are also people who would do harm to those coming into instant wealth, without care or consideration, if they could benefit from it. Some people who come into instant wealth, including some “unlucky” lottery winners, have literally lost their lives. 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. Taking an annuity payout or taking a lump sum option both require an immediate financial plan. A budget and an understanding taxes and the world of finance also become imperative for anyone coming into wealth.
Add up the cost of buying mega-mansions and yachts, private jets and luxury cars, and 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.