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- Lottery players everywhere dream of striking a multi-million-dollar jackpot with a winning ticket.
- But there’s a dark side to coming into a windfall of sudden wealth if you’re not careful.
- Here’s what it’s really like to win the lottery.
Becoming substantially wealthier thanks to a tiny piece of paper would make your life so much better, right?
In fact, recent research suggests that lottery winners are more satisfied with life than those who lost the lottery and that this happiness is lasting, Business Insider reports.
But winning a lottery jackpot can also have some unwanted side effects.
Here’s what it’s really like to win the lottery.
Lottery players everywhere dream of hitting the jackpot.
The idea of striking rich is enticing enough for the average American to spend $US207 a year on lottery tickets.
Source: CBS News
In reality, though, your chances of actually winning are pretty slim — you have a better chance at getting struck by lightning than you do at winning a Mega Millions or Powerball contest.
Source: CBS News and National Geographic
But eventually, someone, or some people, will win.
If the winning numbers are listed on your ticket, your next step is to turn it into the lottery commission.
Source: Vice
When people do win, it’s understandably a life-changing moment that can cause stress or excitement, which can lead to rash decisions.
Source: Business Insider
But there are a bunch of precautions you should put in place before you even turn your ticket in.
Source: Vice, Business Insider
Financial adviser Robert Pagliarini told Business Insider that taking “a very deep breath” should be the first step if you win such a high-priced jackpot.
Source: Business Insider
Then, hiring an attorney, a tax specialist, and a financial adviser should be your next priority.
Source: Business Insider
“This financial dream team can help you make smart financial decisions and help you plan for the future,” Pagliarini said.
Source: Business Insider
They can help you decide if you want to receive payouts over a certain number of years …
Source: Forbes
… or collect the prize as a lump sum up front, which is considerably lower than the official jackpot amount.
Source: Forbes
Another thing to remember is that the jackpot dollar amount and what you will actually pocket are two very different numbers.
Source: Business Insider
When you win a lottery, that prize money is taxed. The US Internal Revenue Service will collect 24% of it.
Source: IRS
So if you scored a $US900 million Mega Millions jackpot, you’d have to give $US216 million to the Uncle Sam.
Source: CBS News
Andrew Jackson Whittaker in West Virginia won a $US315 million lottery in 2002, but he actually walked away with $US114 million after taxes.
Source: Business Insider
And even when you do win in a draw, sometimes others do as well — meaning you have to split the prize.
Source: Daily Mail
Just last month, 40 lottery players in New Zealand won a $US1 million jackpot, worth $US654,000 in the US. But since they were forced to split it 40 ways, each only received $US25,000 in New Zealand dollars, equal to $US16,360 in the US.
Source: Daily Mail
Other winners have landed themselves in hot water for not splitting the jackpot with colleagues or friends that contributed to the winning ticket purchase.
Source: Business Insider
A former construction worker, Americo Lopes, cashed in a $US38.5 million lottery ticket in New Jersey without telling his coworkers, who had pitched in for the purchase of it.
Source: Business Insider
They took him to court, where Lopes was ordered to share the the prize money with his coworkers.
Source: Business Insider
Many lottery winners experience what Pagliarini calls “the honeymoon stage of sudden wealth.”
Source: Forbes
He wrote in Forbes that winning such a large sum of money is an unsustainable “high,” and that winners should not let the prize money dictate how their lives change.
Source: Forbes
Avoiding feeling lost “involves exploring what they want their new lives to look like and creating a strategy that uses the money to help them achieve this,” writes Pagliarini.
Source: Forbes
Another thing to be aware of is people taking advantage of you if you win.
Lottery winners have to be prepared for mooching friends in pursuit of benefitting from their new-found wealth.
Missourian Sandra Hayes split a $US224 million Powerball prize with 12 coworkers and soon found that certain acquaintances were more interested in her assets than her friendship.
Source: Credit Cards
While dining out with her friends, she said they would belatedly announce that they “conveniently” didn’t have enough money to foot the bill.
Source: Credit Cards
“These are people who you’ve loved deep down, and they’re turning into vampires trying to suck the life out of me,” Hayes told AP.
Source: Associated Press
Oregon winner Stacey Lowry dealt with a similar issue. She won a $US5 million lottery prize but moved towns after she said her entire neighbourhood turned against her.
People she trusted began asking for money or gifts, which she refused, and started bashing her name. “The town went crazy,” Lowry’s friend Melany told TLC. “Lots of rumours.”
Your winning might also bring out the worst in family members, too.
When Denise Rossi won a $US1.3 million jackpot in 1996 …
Source: LA Times
… she abruptly decided to divorce her husband without telling him about the prize money in order to keep it all to herself. Her plot backfired three years later, though, when a court ordered her to transfer every penny of her winnings to her ex-husband.
Source: LA Times
One Pennsylvania man, William Post, won $US16.2 million in 1988 …
Source: Business Insider
… and was pursued by a hit man hired by his brother who hoped to inherit a share of the winnings.
Source: Business Insider
When people know you have that much money, you’re also in greater danger of being robbed.
Whittaker, the West Virginia lottery winner, was sitting in his car one day when he was robbed of $US545,000.
Source: Business Insider
Winners also have an increased risk of bankruptcy.
Source: Credit Cards
With such a vast amount of credit available to them, people sometimes opt to make purchases using credit rather than use cash and overspend.
Source: Credit Cards
Coming into a substantial amount of money also means being thrust into the spotlight — some states require you to publicly announce your winnings.
Source: Readers Digest
You’ll never enjoy anonymity again, which is partly why Pagliarini suggests hiring a financial team to help with the flood of media attention.
Source: Readers Digest and Business Insider
And in addition to media attention, you’ll likely constantly be berated by money request sfrom investors and scammers.
Source: Credit Cards
Whittaker, the winner of the $US315 million lottery, spent at least $US3 million fighting lawsuits that came out of the woodwork alone, according to ABC News.
Source: ABC News
He told ABC that over 400 legal claims have been made against him since he won the lottery.
Source: ABC News
And some winners lose big time after hitting the jackpot, even faring worse than they did before.
One winner, Sharon Tirabassi, spent most of her $US10 million Canadian jackpot on extravagant homes, cars, designer clothes, parties, vacations, and handouts to family and friends.
Source: Business Insider
Within a decade, she was riding the bus again to her part-time job and renting a house.
Source: Business Insider
A Texas man, Billy Bob, won a $US31 million jackpot in 1997.
Source: Business Insider
He spent it on finer things, like vacations, homes, and cars, but also obliged too many money requests.
Source: Business Insider
He eventually squandered all of his money away.
Source: Business Insider
Another winner, Michael Carroll, won a $US15 million British jackpot in 2002 …
Source: Business Insider
… and lost it all within five years.
Source: Business Insider
All of which could have been prevented if more sound financial steps were taken.
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