You’re not imagining things. The next drawing will be this Wednesday. The payout is $1.3 Billion. If a winner isn’t decided then, it will rise to $1.5 Billion. As a reminder, you only win the payout if you get all five numbers plus the Powerball Number correct. Anyone who’s been wayching the news knows ALL of the following is more likely to happen compared to winning the lottery in general:
- Getting struck by lightning twice or more in the same day.
- Getting drafted by the NFL/NBA/MLB/NHL and etc.
- Winnning a Reality TV Show.
- Getting hit by a meteor.
- Time Travel being invented.
- Pigs flying.
- The world coming to an end.
- World Peace.
Those are a few examples and all are obsenely unlikely but compared winning The BIG ONE, they’re prettymuch guaranteed to happen.
As someone who looks at the lottery as a means of waving instant wealth in the faces of those who know they will never see that kind of money in theirs or their childrens’ lifetimes, I view it as a cruel form of financial abuse on the American Public. More so given about 20% of those who play the lottery know where the money collected for the payouts come from.
Where DOES the money for the payouts come from, you wonder? You should and I’ll tell you:
Every parking fine, every lottery ticket purchased, everything you’ve EVER paid back to your city/town, county or state. ALL of that money is used for the payout in these lottery payouts. Didn’t you ever wonder why the bigger the payout, the less likely multiple people will win? THIS is why. It’s the biggest little-told “secret” and it’s a damned good hustle: Get people to focus on the possability of winning the payout and not think about where the money cames from in the first place. You can be sure if the source of the payout was widely know, at least half the people who play would stop altogether. Not most but I’m sure at least half.
One of the few things both social media and the National Media seem to have agreed on lately is the Lottery Commission should change how they do the Powerball Jackpot. Folks from both camps have said if no one wins this time, everyone who bought a ticket and got a certain number of the numbers correct should just get $250,000 to $1,000,000. One of the few times Mass Media and Common Sense are on the same page.
I actually agree with this. The fact that 1 person will potentially instantly join the $1 Billion Club (Actual payout will be about $850 after taxes) simply by correctly guessing 6 numbers is a slap in the face to everyone else who played and makes the hypothetical single winner the most hated person in America for a month or two. There have only been a handful of instances in which the Mega Millions/Powerball payout was split between multiple people and most of them expressed the desire to have their identities kept anonymous for obvious reasons.
Think about it:
You suddenly win the lottery. “Long lost relatives” you didn’t know existed and everyone else suddenly want to see you. Then there’s the con artists, charatible foundations, investment firms, the IRS, people with sob stories and so on. The media rarely touches on this but most who win big quickly find out having more money they they’ll ever need in their or their grandkids’ lifetimes isn’t as nice as they thought it’d be. You have to deal with family wanting their cut, friends and so-called friends wanting a piece and everything else I just listed calling, texting, emailing and knocking on your door looking for a cut of YOUR money.
The smart ones actually give away most of it as quckly as possible simply for tax reasons–more so if they take the lump sum. That said, ALWAYS take the lump sum if your lottery payout is over $25,000 (In most states if I remember right). It’s taxable after that amount and you donate to a non-profit of this amount or more, you get a deductiion.
Don’t just take the lump sum for tax reasons: Historically, most of the winners are of or past the age of retirement. If you fall into this category and you take the annual payout, the payouts stop the day you die. A woman tried to sue her state to get the rest of her winnings made a lump sum and lost so…yeah. ALWAYS take the lump sum. The tax burden will be higher, yes but you will only have to worry about it for that tax year. Once you take care of it, you’re set for life.
All this said, if you find yourself the winner of the Powerball Jackpot, do 3 things before you do ANYTHING else.
- Accept the fact your life will never be the same again.
- Get an attorney if you don’t already have one.
- Surround yourself with people you trust for the first year.
The first one is the most important believe it or not. Folks casually say they don’t expect their lives to change too much. Like it or not, it WILL. The second one, most don’t think about until they get in trouble. It’s a good idea to get one early on who can advise you on certain legal matters a Financial Planner can’t. The third one is pretty obvious. Of course, you’ll already know who really cares about you compared to who really just cares about your money real quick!
…I will not be participating in the Powerball Jackpot. I actually don’t play the lottery in general anyway. Scratch ticket every now and then but NEVER the lottery. At least with a scratch ticket, I know I will get something back even when I don’t win anything. With the lottery, it’s worse than all or nothing.
In a followup blog post, I will share what I’d do if I suddenly found myself with a few hundred miliion dollars. Just to get it out the way =D