There’s a right and wrong way to spend your Powerball jackpot. This ultimate guide can tell you what not to do.
There is no shortage of Powerball winning horror stories of past winners who blew through their prize money far too quickly. Some even found themselves penniless within a few short years of winning it big. With each of those tales comes lessons learned that future Powerball winners can use as a guide. Here is that guide to help you learn from the mistakes of others and avoid making similar mistakes with your Powerball jackpot. This is the full roster of exactly what NOT to do with your big payday.
Don’t Make Any Significant Purchasing Decisions Right Away
You might think there’s enough money to afford a few key, big-ticket purchases right away. But the experts advise against it and suggest with big jackpot wins, winners sometimes fall prey to that false sense of financial security. In fact, you should avoid making any significant purchases, including paying off debts, without first consulting with a financial or wealth expert. Let someone guide you and develop a strategy for stretching every last Powerball jackpot dollar to your advantage.
Buying Expensive Vehicles Is Not an Investment
A lot of Powerball winners rush out and buy new cars with their jackpots. And if you’re driving a clunker that needs replacing, buying a car is probably a smart move. But be mindful of what you’re buying. Vehicles lose value and are not really a good investment. So driving off with a six-figure sportscar is a loss, no matter how good it feels.
Don’t Give Away Cash Without Talking to a Lawyer
Powerball winners often look to help friends and family with their financial woes. But before you go writing checks to help others, talk to an attorney or tax professional. There are certain gift taxes to be aware of that could cost you later. And you can avoid those if you develop a legal strategy for helping others without directly paying them.
Don’t Invest Without Guidance
If you weren’t savvy about investment strategies or the stock market before you won the Powerball jackpot, having all that cash won’t suddenly make you an expert. Don’t make the mistake of investing in stocks, bonds, or cryptocurrency until you consult with an investment portfolio professional. Let someone who knows inform you about investment risks and benefits before you invest in anything.
Stay Away from the Casinos
Depending on the size of your Powerball jackpot win, you might be tempted to head to the casinos and test your luck again. However, there have been winners in the past who’ve lost it all because of that sense of affordability. Your odds won’t change at the slot machine, regardless of your bank account balance. And you could probably find better ways to spend that money without losing it at the casino.
Big Houses Come with Big Tax Bills
It’s perfectly acceptable to want to buy a new house with your Powerball jackpot. But buyers beware. Big, lavish, or expensive houses usually come with equally high property tax bills. And those property taxes will come due every year. Be smart about what you can afford to buy now, but also about what you can afford to keep ongoing. And if you don’t need ten bedrooms, maybe settle on five instead.
If you’ve recently won a Powerball jackpot, let these tips serve as a cautionary tale. There have been many winners who’ve come before you and made all the wrong purchasing decisions. Keep your prize longer and stretch every one of those million dollars to your advantage.
And if you haven’t won yet, keep this guide handy, so you know what not to do with your Powerball jackpot.