It’s best to get the advice of a financial advisor before claiming a Powerball jackpot, as these examples point out what can happen without it.
If you’re playing Powerball, you’re likely dreaming of winning it big, vacations on the beach, a new car, and paying for your grandkids’ tuition. Go ahead and dream big! After all, you could be the next big Powerball-winning headline. But there’s another line of thinking Powerball players should consider. And it involves seeking professional guidance should your numbers align, resulting in millions of dollars in your favor. See these examples of what can happen to your Powerball jackpot if you don’t get an advisor to help you.
Most of Us Can’t Comprehend Millions
Science suggests that the human brain is resilient about counting small numbers and even comparing big numbers. But the brain struggles to comprehend or visualize the value of a single, massive number. When the news talks about the national debt, for example, you recognize how big “billions” of dollars are. However, the sheer size of how much money that is can be challenging to wrap your head around.
The same challenge presents when someone wins a multi-million dollar jackpot. The brain says, “That’s a lot of money.” But without comprehension of how each dollar adds up, it’s easy for some to spend hastily and end up broke. It’s why so many recommend seeking the advice of a wealth manager or financial advisor.
From Rags to Riches to Rags, Again
Here are just a few of the unfortunate results of what can happen when you try to manage your newfound millions without the professional help of an advisor.
Sharon T. was a single mother on welfare when she won $10M. After spending on lavish parties, fancy cars, and exotic trips, she was back to riding the bus again in just a few short years.
Evelyn A. won $5M and took her chances with those winnings at Atlantic City, where she lost hundreds of thousands over a few visits.
One woman who won a jackpot tried to put her winnings into a corporation and give her family 51% of the holdings but then got blind-sided by the IRS gift tax that cost her over $1.1M.
Denise R. discovered she was a $1M winner but didn’t tell her husband about it and filed for divorce. The ex-husband discovered her secret and sued her for not disclosing her windfall during the divorce. The judge sided with the ex-husband, forcing Denise to give up every penny.
Janite L. was generous with her multi-million dollar winnings and donated millions to various charities. Unfortunately, she gave away too much, and in under a decade, she was filing for bankruptcy.
Benefits of Seeking an Advisor
If you find yourself, one day, holding the winning Powerball ticket, get financial guidance first. A certified wealth management advisor, CPA, or financial planner can help you with a host of big-number decisions you’ll have to make. And these pros will make it easier to make these decisions with clarity.
- Decide to take the lump sum or the annuity payments.
- Decide how to handle any publicity with your Powerball win.
- Decide what bills to pay off first.
- Decide how to structure a retirement plan.
- Decide if you want to gift some of your win to others.
- Decide if you plan to donate to charity.
And a financial advisor can help you accomplish your goals while keeping as much of your new wealth intact for as long as possible.
Keep playing Powerball and dream big about your plans for a hopeful Powerball jackpot. But also, learn from the mistakes of others and don’t try to manage your big win all by yourself. Assemble a team of pros who can coach you through the tough decisions so you can live out your dreams in the best financial position.