Avoid these 5 mistakes if you win Powerball or Mega Millions Jackpot !
This week, one person in Washington has won $754.6M Powerball jackpot.
The Powerball lottery has weekly lineup of drawings to three nights a week and the ticket matching all five white balls as well as one red ball with announced numbers, wins the jackpot prize. If no one wins, then the jackpot prize amount increases for next draw and after several weeks of no winners, the jackpot prize may get ballooned to billions.
As the jackpot amount increases, it attracts larger number of players and hence the odds to win the jackpot also increase. According to Lottery officials, the odds of winning the Powerball jackpot are 1 in 292m.
In Nov’22, a Powerball jackpot of $2.04B was won. It was the world’s largest ever lottery prize. 8 days later, Powerball jackpot of $92.9M was won. Since then, after 34 drawings of no one won over next 11 weeks and the jackpot prize ballooned to $754.6M. This prize has been won now. It is the fifth-largest jackpot of Powerball and the ninth-largest US lottery prize ever. The jackpot prize amount is now reset for the next drawing for $20M. Similarly, $1.35B Mega Millions jackpot prize was won in January’23.
45 American states, the country’s capital, Puerto Rico and the US Virgin Islands allow Powerball & Mega Millions Lottery to be played in their territory.
The jackpot winner person can choose to receive the full prize money of $754.6M through an annuity spread on 30 years starting from partial amount right now and then increasing by 5% annually over next 29 years or opt for a lump sum amount of $407.2M to be paid in cash. Typically, winners opt for the lump sum. The amount is paid to winner after deduction of federal & state taxes.
Here are 5 points, you should take care of after winning the Lottery (or receiving unexpected windfall):
1. Don’t announce
You should keep your mouth shut if you are the lucky one to win. Because there are many unlucky ones who couldn’t win and will not like your win.
If you tell publicly, you will be bombarded with all kinds of requests, scammers, bogus Investment plans, dummy NGOs for donation and of course, social media and email requests. So don’t put yourself and your family on target of anyone!
Hence, stay anonymous, if possible. This should be closely guarded secret. Read this article further to know whom you should share with.
2. Don’t Trust blindfoldedly:
You may get flooded with phone calls and emails from people claiming to be officials from lottery or state officer. People will try to con you. Remember, legitimate lottery officials do not contact you over calls, emails or social media. If anybody approaches you to pay a fee to claim your prize, your warning antennas should be up. Similarly, do not share personal finance information or lottery ticket to a stranger. You must remember the fact that the lottery company doesn’t know the winner until the claimant reaches them with the winning ticket. There are no previous records with them to verify the claimant. Hence, they will handover the jackpot prize to anyone who approaches them with the winning ticket.
3. Plan your taxes payment:
You should first consult an attorney and an accountant. This is applicable in both cases whether you decide to collect the lottery amount in lump sum or in annuity. In both options, proper planning should be done for handling all the taxes liabilities. Any expense or investment plan should be done only after state taxes payment. One thing is for sure, whether you choose to collect jackpot prize in lump sum or part money every year thru annuity route, both options involve similar level of taxes, anonymity and caution.
4. Plan to grow your wealth:
Since you do not have experience to handle such large amount of money, hire investment banker or portfolio manager from a reputed personal finance consulting firm. You must plan your savings, investments and spending in such a way that it grows continuously and remains available for you as well as your future generations.
One of the winners earlier, established a hospital. It took 2 years to build and become fully operational but now its running successfully. The owners are generating good money every month and the earning is growing every year. Not just that, they are now supporting others also in their society to come up in life.
5. Donate but wisely:
Many people wish to donate and help the needy, but always own constraints held them. When you get unexpected sum, it may so happen that you old wishes of donating and helping may surface up. While it is good to be benevolent, but one should do proper planning before jumping to do that.
According to a survey with many highly experienced personal finance experts, after receiving any new-found money from ancestors or court case winning or lottery, one should first build a means to generate money on continuous basis and then entertain donation requests. If you plant a tree, water it regularly, it will start reaping fruits and you can distribute fruits on regular basis. A donation without earnings in place is like giving fruits from your basket, which will become empty one day eventually.
A planned person never fails in life, instead becomes beacon to others. I sincerely hope that you shall be mindful after any windfall gain and remember these 5 caution points. These points will guide you to properly plan, pay your taxes, become debt-free and grow your wealth wisely in life. May you become beacon to all others around you and light their life paths.
I truly hope that you would like this blog. I would keenly wait for your views. Please feel free to write me on email@example.com and share your inputs / feedback / queries, if any.
If you want me to cover any particular topic in forthcoming articles, please share topic name of your choice. I shall be happy to help you.