I think you would agree with me when I say that it would be awesome to win the lottery, if there was some surefire thing that would make me not lose it as soon as I won it.
I have thought that way also but heard of these people who win and then a few years later, if it takes that long, are as broke or in more debt than when they started.
But I will tell you I found some ways that will keep that from happening. If you practice these three things, it will help you keep your annuity payout for more long term than it only lasting for a few years.
What is the Powerball Annuity?
First off, lets define what the powerball annuity is. For those of you that have just heard the term but don’t understand what it really is, I’m going to share it with you now. An annuity is a fixed sum of money paid to someone for the rest of their life. In the case of the Powerball though, it is paid to a jackpot winner and if you die before you receive all of it, then your estate would keep receiving it until the amount of payments are completed.
With regard to the Powerball annuity, they will receive an initial payment, and then 29 more payments for the rest of their life or 30 years total at which point the payments would be depleted. Each year the payments increase something like 5% to keep with the cost of living. Currently the jackpot is $118 million which mean your first payment would be something like $3,933,333 with each increasing 5% yearly.
You Have Choices
Remember, though, you have choices on this. You can take the payments in the annuity or you can take a cash payout. In lump sum situation, you would receive a payout of something like $67,000,000 or roughly a third of what the amount was after you pay taxes and any other fees you now owe. You have choices like I said above, but I mean it in another way as well. I’m not going to say they are easy but they are something to look at when deciding what you’re going to do with any winnings.
Decide Your Goals: then choose
The first thing you need to do is to consider what your goals in life are, and don’t just say you’re going to enjoy the money. That my friend will lead to despair. Just look at people like Viv Nicholson, Billy Bob Harrell Jr, and Janite Lee. None of them made plans with theirs either.
One thing I’m going to reiterate here is the choice. What happened before you had the money? Did you a choice then when you were forced to wake up at 5 AM to travel a commute that took you over an hour to get to a job where no one seemed to care if you were there or not? Except when you were sick and had to call in. Choice is the fact that now you have the ability to create your own options.
What are those options? Here are some choices you are free to make now:
- Do I set my own hours now or does someone else set my hours? – Most people want to quit their jobs and then just start spending money. They’re not realizing that it won’t last as long as they think it will.
- Do I want money now and to be broke a few years down the road? – Most don’t think this at all. I mentioned her above, but Janite Lee was like this. She won $18 million and 8 years later had $700 in assets with over $2.5 million listed as debt.
- Do I want money for the rest of my life and some to leave to my children? – This is also one of your options you can choose now. How do you guarantee this option will be fruitful? This is where you increase your financial IQ. Learn a trade that allows you to make money while you sleep. Find something you love that ties in with this. Invest your money and live off the interest as you learn and then keep building your passive income while you money continues to grow on its own.
What does it benefit?
The thing you must remember is who you’re benefiting. So many people win and then they lose track of what’s happening and in so doing they forget who they need to benefit and that’s themselves with their financial plan. They just feel that spark of freedom (they think it’s freedom, but in reality it’s excitement) and they just start blowing money before they realize what’s happened.
How do you maintain composure in such situations?
- Have a financial planner – You need to have someone that will help you curb the excitement and who will keep you focused on what your goals are.
- Have at least one person on your legal team – You need to have a lawyer to advise you on what impact the steps you will will be taking and the effect they will have on you and those you love. Yes, I’m referring to another person who is going to help hold you back and keep you focused on what’s important to you for your financial future.
- Don’t make snap decisions – Don’t do this with any of it. When the relatives you never knew start showing up, wait a day before doing anything and consult your team. When the deal of a lifetime is dropped on your door, wait a day, consult your team and make a joint decision that fits your goals.
Will this keep you out of danger of all those people that will be knocking on your door for their share of what you won? Maybe not always, but it will help keep you in a safe zone from them and from you. You will want to spend that money on all the things you want and think you need. Keep up the three steps listed above and it will help prolong what you’ve won and increase your financial future positively.
Mr O’Connor recognizes the potential there is in Online Marketing and the power of the written word. As such, he is trained in Copywriting, Affiliate Marketing, Blogging and the publisher of 4 Kindle books.
Read Larry’s story, “From Prisoner to Producer.”
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