We've all heard the odds: Your chances of holding Wednesday's winning Powerball lottery ticket (at this time an estimated staggering $1.4 billion jackpot) are just one in 292.2 million.
That's worse than being struck by lightning (576,000 to 1) and much worse than dating a supermodel (88,000 to 1). Still, thousands are flocking to buy their chance at becoming filthy rich. As unlikely a scenario it may be, would you even know what to do if you had the winning ticket?
First, do nothing, says Rene Lynch of the LaTimes. Resist the urge to post it on Facebook, experts agree. Just put the ticket somewhere safe (make sure it’s signed), and host a quiet celebration with yourself.
Second, after you’ve pinched yourself and triple-checked the winning number, call in a lawyer or financial planner. Preferably both. Start planning.
Third, splurge. Take that vacation or go house-hunting. Do one of the things you dreamed about doing if you won. Make a list of the rest, to discuss with your financial team. Don McNay, author of the book “Son of a Son of a Gambler: Winners, Losers and What to Do When You Win the Lottery,” told the Associated Press that nine out of 10 winners burn through their winnings in five years or less. “It’s too much, too fast,” he says. “Nobody is around them putting the brakes on the situation.”
Fourth, protect yourself. Keep the news as private as possible. Past winners advise against giving money away, especially publicly. Even if you can tell the difference between your long lost cousin’s request for help financing culinary school and a Ponzi scheme, you probably don’t want to spend your time sifting through requests for cash.
Fifth, take the annual payments, unless you are financially savvy (and disciplined) enough to manage the lump sum. According to the New York Times, if you win, you could choose an $868 million cash payment or $1.4 billion doled out in annual payments over 29 years. Taxes would cut the winnings of either option in half.
What makes us continue to buy lottery tickets when the odds are so against us anyhow?
It’s simple: Hope.
Dr. James Gottfurcht, who specializes in the “psychology of money,” told NBC that humans are “wired for hope. And the lottery gives them that and more.”