Advice from past Powerball winners
The sheer enthusiasm a Powerball winner feels can be overwhelming. And according to those who have been fortunate enough to pick the winning numbers, they say the moment itself is life-changing. Most winners do have similar reactions to winning and goals for how best to spend their newfound fortunes. They also share a few struggles and decision-making challenges. Veteran Powerball victors might offer some hard reality advice for new winners, especially when it comes to avoiding common Powerball winner mistakes.
The first Powerball winner mistake is the notion you can handle all the decision-making, investing, and spending on your own. Those who have won before and Powerball officials alike, will suggest that new winners should first hire a team of professionals. An attorney, financial advisor, insurance agent, and a tax advisor should all be on the shortlist of experts to contact first. Helping you determine how to collect your winnings, either lump-sum or over time, and understanding the details of the tax burdens associated with spending, donating, and gifting, these professionals will be invaluable.
Past winners would almost always say they later regretted the spotlight of being a Powerball winner. Sure, in the moment, it’s so exciting to hold the winning ticket and maybe experience a little localized fame. But if they could relive it all again, Powerball winners might prefer to remain anonymous. Some states allow winners to divert jackpots through a trust, to avoid the publicity. Others, however, require identities to be disclosed. For new Powerball winners, keeping the announcement as quiet as possible can reduce the stress and pressures that accompany multi-million-dollar earnings. Distant friends and family members won’t know to call asking for handouts. Acquaintances won’t hound you about how you’re spending your money. In a way, anonymity can be a warm security blanket, keeping the unnecessary noise out of your decision-making.
There are countless reports of past Powerball winners who quickly found themselves in bankruptcy or embroiled in legal proceedings with family. Many of these horror stories can be averted if instead, winners recognized that money, even millions, can run out eventually. Making significant purchases on impulse can put huge dents in the jackpot. And some extravagant buys require ongoing spending. A fancy mansion, in a high-end neighborhood, for example, will come with hefty property taxes every year. Buying a Lamborghini means paying for Lamborghini-level maintenance and service. Oftentimes, winners aren’t able to see the end of the money and lose sight of how quickly expenses mount.
Many veteran Powerball winners first begin spending their cash on family and getting out of debt. Paying off the parents’ house or buying the siblings new cars might seem like a reasonable gesture. But those who have walked this path of newfound millionaire status may suggest that new winners be more cautious about sharing. There are tax guidelines for gifting cash that could require additional payments to the IRS. Paying off one cousin’s student loan might quickly turn into a line of cousins looking for their debts to be paid. While the initial intention of helping family is noble, there is a fine line between assisting and ending up with financial or family troubles. It’s a Powerball winner mistake that past winners would advise you to avoid.
Those who speculate how they plan to spend their days after winning the Powerball usually say they would quit their jobs, first thing. But when you actually hold the winning numbers in your hand, you might want to rethink that idea. One Powerball winner, who was an over-the-road truck driver nearing retirement, quit immediately. And for him, it made sense. But in another instance, where a group of co-workers won the millions, every one of them decided to continue working. New winners might not want to rush to walk away from a job, at least until they’ve had a chance to discuss a sustainable and long-term plan with a financial professional.
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