Do you ever think about what would happen if you won the lottery? It’s worth considering because it could happen at any moment!
One of the main factors to be aware of is that there are two completely separate payout options after you win. You can either take the lump sum payout or an annuity option. With an annuity, the amount that you win is paid out each month over a period of years. This breaks down your lottery win and makes it easier to manage.
Lottery jackpot wins have been insane in the past, with some soaring well into the billions! For many, that’s an unfathomable amount of money to comprehend. Plus, receiving it overnight in the form of a massive cheque does have a significant impact on your finances and your psychological well being.
You’re Rich Now
Yes, once you hit that jackpot, you do become a millionaire overnight. If you take the money in a lump sum, there’s no drawn out process. Once the ticket is approved it’s sent directly to your bank account. As well as leaving you vulnerable to theft, it also leaves you open to friends and family members. Now, you might think that the solution here is to stay anonymous. Anonymity will protect you from strangers and business owners who want to provide you with services and solutions you may not need.
It won’t provide you with protection from friends and family members who soon become beggars. Suddenly, your cousin twice removed needs help with their student loans while your sister could really do with a new house. No, not one that’s the same size as the property she has now. It needs to be at least double to accommodate the two cars you’re going to buy her. You might think your family and friends aren’t like this. However, you’d be surprised by the impact a jackpot will have on these individuals. If you choose a lump sum, you can avoid this type of scenario. They won’t be able to beg or request money because it won’t be there. Instead, you’ll be provided with sums that comfortably improve your wellbeing without overwhelming your bank account.
The Impact On You
Do be aware that a lump sum which is an obscene amount of money will also have an impact on you psychologically as well. It’s why a lot of people are bankrupt in a matter of years or even months.
It’s true what they say, money doesn’t buy happiness. As well as leaving you exposed to theft and other crimes, a big lump sum will put you in power to make some big decisions. These may not be the smartest spends from investments in businesses that you don’t understand to purchasing homes that you can’t really afford. Winning the lottery doesn’t mean that you can afford an estate if you don’t have a similar sized income. Ultimately, you won’t be able to pay the bills and costs that come with it.
Evelyn Marie Adams is just one example of going broke after winning the jackpot. She won $3.9 million which is a massive prize. It put her under immense pressure and by 2012, she was broke, with seven hundred to her name and working two jobs.
John Mcguinness was still living with his mom and dad when he won the lottery and earning just $150 a week. After the win, he was able to afford more than he could imagine and quickly began to spend, spend, spend. His win of $10 million ultimately left him struggling to even afford food ten years later.
Now that you know more about lumps sums and annuities, which option would you pick if you won millions and millions in cash?