AP: Big winners share lessons, risks of Powerball win

[Omaha Steve]

By ALAN SCHER ZAGIER


COLUMBIA, Mo. (AP) - So you just won the $500 million Powerball jackpot, the second highest in lottery history. Now what?

Perhaps it's time for a tropical vacation or a new car. There are bills to pay, loans to settle, debts to square.

Past winners of mega-lottery drawings and financial planners have some more sound advice: Stick to a budget, invest wisely, learn to say no and be prepared to lose friends while riding an emotional roller-coaster of joy, anxiety, guilt and distrust.

"I had to adapt to this new life, "said Sandra Hayes, 52, a former child services social worker who split a $224 million Powerball jackpot with a dozen co-workers in 2006, collecting a lump sum she said was in excess of $6 million after taxes. "I had to endure the greed and the need that people have, trying to get you to release your money to them. That caused a lot of emotional pain. These are people who you've loved deep down, and they're turning into vampires trying to suck the life out of me."

FULL story at link.



In this Feb. 22, 2006, file photo, the eight winners of the $365 million Nebraska Powerball lottery hold up their ceremonial checks at a news conference in Lincoln, Neb. As the drawing for a $500 million Powerball jackpot approaches, Wednesday, Nov. 28, 2012, past winners of mega-lottery drawings and financial planners have some advice: stick to a budget, invest wisely, learn to say no and be prepared to lose friends while riding an emotional roller-coaster. (AP Photo/Nati Harnik, File)

[Viva_La_Revolution]

1. forgot the link

[leftyohiolib]

2. no link

[joeybee12]

3. I'm willing to get filthy rich to take the chance to see if it changes me...nt

[Politicalboi]

4. 224 million

Split between 12 people and you end up with 6 million? What a tax scam. Jackpots are misleading. What lotto should do is charge a 10 cent tax for every dollar spent. So at least when you win something, it's not all gone due to taxes. If you can't spend an extra dime, you shouldn't be playing. And the states would benefit with the extra taxes. And of course you would still have to pay some taxes, but not as much. Or lotto can give you the option to pay the extra dime per dollar at purchase, or pay the extra taxes if you win.

[Blue_Tires]

5. Yeah, the lump sum is silly unless you don't have a lot of years of life left

[Spike89]

6. Or if the annuity isn't guaranteed

It isn't in some games/states. Even for a relatively young person, 29 years is a long time and risky in those areas--you may not be able to leave the uncollected winnings even to your spouse. Also, the lump sum can actually allow you to invest and theoretically even make more than the total 29-year payout total (compound interest is amazing that way). Finally, will tax rates currently low for millionaires--the odds are that you'd save a significant amount in taxes by taking the money now.

The payout difference isn't as clear cut as it may appear at first glance.

[RomneyLies]

7. If you win, you MUST engage a set of financial advisers BEFORE you claim the prize

End of story.

Second thing is, TELL NOBODY until AFTER the prize is claimed.

When people start knocking on your door, you will be able to rightly claim, "man, my financial advisers are hard asses and I can't touch most of that. I draw paychecks at regular intervals just like anybody else. They tell me this is the only way big lottery winners don't end up going broke!"