Here’s something to think about: How come you never see a headline like ‘Psychic Wins Lottery’? – Jay Leno
Are you feeling lucky? Well, do ya?
If so, well then playing the lotto might just be for you.
But like Katniss, the odds may not be ever in your favor.
It has about two weeks since the largest jackpot in Mega Millions history was won by a single ticket to the tune of $1.537 billion dollars!
All over the country it was Powerball and Mega Millions fever.
Everywhere I went people were talking about the lotto. Some people even tweeted about what they would do if they won.
Oh oh I have a really great new #MegaMillions poll. How would you spend the $1 billion? 😏
— Kristina Rex (@KristinaRex) October 19, 2018
I get it. You win the jackpot and your financial freedom. You’re on cloud nine.
However, you have to plan your escape from the rate race whether or not you win the lottery.
If you want to get rich, either by picking winning numbers or otherwise, you better learn quick how to manage a fortune.
Here’s why.
CHANCES OF WINNING
Are pretty slim.
According to Fortune magazine, the odds of winning the lottery are about one in 300 million. Considering that there are over 326 million Americans, that makes your odds quite small.
Chances of winning the lottery today:
1 in ~300 MillionChances of being born as yourself:
1 in ~400 TRILLIONWe have all already won. Enjoy it 👌 #LIFE
— Michael Lech (@Miguel_Fiesta) October 23, 2018
If you want to close this gap, you will have to increase your scope of numbers to play and play more often.
It’s not enough to do the kids birthdays or your anniversary. Going to have to get creative. You need the locker combination to your high school locker, your kids Xbox password, your great-aunt’s wedding date, and your first love’s old address. You know, something like that.
But all jokes aside, you will have to increase your range of numbers to increase your odds of winning.
In addition, you will have to play more often.
It has been well-documented that people who win the lottery once are likely to win it again.
The problem with this is that you also increase the amount of money you lose while playing the game.
LOTTERY WINNERS GO BROKE
Get rich or die tryin’. – 50 cent
Did you know a high percentage of lottery winners end up broke? According to the National Endowment for Financial Education, 70 percent of lottery winners go broke.
According to @NYTimes, 90% of lottery winners go broke within 5 years of winning. What would be your plan to keep your winnings long term?
— ℝ𝕚𝕔𝕙𝕒𝕣𝕕 𝕁. 𝕎𝕠𝕠𝕕 (@RichardJWood) November 3, 2017
I have a theory.
If you are unable to manage balancing your check book with $1k, then it is nearly impossible to do it with $1B.
I feel like it is.
But, if you saw Justin Timberlake in The Social Network, you know he says, “you know what is cool? A billion dollars.”
They say the first million is the hardest. Well, try wrapping your head around a billion!
The first million is the hardest.
— Drizzy (@Drake) May 30, 2012
Even billionaire T. Boone Pickens thinks that it is too!
The first billion is a helluva lot harder RT @Drake: The first million is the hardest.
— T. Boone Pickens (@boonepickens) May 31, 2012
That’s a whole lot more zeroes you are working with. If you don’t know what PEMDAS stands for (Please Excuse My Dear Aunt Sally), you are in trouble.
You must first learn the rules of money, if you are to win the game. See my posts for more on how to build up your wealth knowledge bank.
Forget casinos, bet on yourself
Money Lessons I learned from Scrooge McDuck
How Millennial Money inspire me to start saving $13,333.06 a year
STAY GROUNDED
“Using money you haven’t earned to buy things you don’t need to impress people you don’t like” – Robert Quillen
I have seen too many lottery winners go bankrupt. You win all that money just to go back to being broke! No, thanks.
Forget your friends and family telling you to spend. Do not inflate your lifestyle and then upgrade it even more after moving to that gated community in Beverly Hills. You do not need to outspend your neighbors.
You can still drive a Honda. The kids can still get jobs. If you think that it is taking away an opportunity for someone else to work for a needed paycheck, then let junior volunteer.
That was the advice Fran gave Mr. Sheffield in The Nanny. He wanted to teach his daughter about responsibility and the value of money. So, in S02E21 Maggie became a candy striper at a hospital. Great advice.
Fun Fact: In the S02E08 of Gilmore Girls, Rory gets in trouble at school. It just so happens that one of her schoolmates in that episode was none other than Mr. Sheffield’s youngest, Grace, played by actress Madeline Zima. You can see her in the blue sweater walking behind Rory in this clip.
My advice to anyone who comes into large sums of money whether by inheritance, large windfall, bonus, or lottery is to stay humble.
Read my posts for lessons on eating humble pie:
How Dave Grohl turned passion into profits
Money Lessons I learned from Aesop’s The Ants and the Grasshopper
Money and Life Lessons I learned from Mr. T
Life Lessons I learned from The Warriors
The Greatest Assets are people
HOW TO MANAGE ALL THAT MONEY
You have to ask yourself after winning the lottery: How are you planning to manage all that cash?
You need a team to help you manage all that money. A circle of trust, like in Meet the Fockers.
Won $4 on the mega millions so if you all could respect my privacy while I figure out how to spend it that would be nice. Thank you.
— Dustin Jarnagin (@Djarnagin12) October 24, 2018
I have a few suggestions.
- Set up a trust to stay anonymous
- Get a financial advisor
- Hire an intermediary to answer requests for money on your behalf
- Set a daily, monthly, annual spending limit
- Hire an attorney
- Take the lump sum
- Create your own annuity with a spending budget
- Hire a CPA
- Learn how to manage money
- Understand your tax liability
BUY STOCKS INSTEAD OF LOTTERY TICKETS
I would much prefer people spend their money wisely than to bet it on chance.
You could invest your money instead of throwing it down on the roulette table. If you are want to be a part owner of Caesar’s Palace, instead of merely placing bets at one, you can buy REIT’s or mutual funds.
Even better, you can buy index funds that includes hundreds of stocks that track a benchmark such as the S&P 500.
Every dollar you invest can possibly be turned into two or three dollars.
Source: familyfinancefavs.com
Not sure what all this is? No problem. Go down to your local library and ask for books on personal finance. You can also look up any words you are unfamiliar with online.
In addition, you can read blogs, listen to podcasts, join investing clubs, get a job in banking, take a few online finance courses, or ask friends and family for book recommendations.
Many books offer book recommendations in the appendix.
All you have to do is be willing to do some homework.
Trust me, it’s worth it.
When your one-day sitting on a beach in Hawaii, sipping cocktails and able to get up at noon just because.
Your future self will thank you.