Here’s The Perfect Lottery Jackpot Amount To Win
What’s the perfect lottery jackpot amount to win?
The answer is $30 million. Are you surprised? Did you expect it to be more or less?
I wrote the book, “Sudden Wealth Solution: 12 Principles to Transform Sudden Wealth Into Lasting Wealth,” and I have a financial planning firm where I specialize in working with sudden wealth recipients – these are people who receive a large windfall from selling a business, stock options, inheritance, lawsuit settlement, sport’s contract, and yes, winning the lottery. I’ve been working with clients for over twenty years. Some have received windfalls of $1 million overnight and others in excess of $100 million overnight. I’ve seen the good and the bad when it comes to sudden wealth.
When the lottery jackpot gets large like it is now, I’ve often thought about the perfect amount to win. You might be of the mindset that more is better. I used to feel the same way. With a larger prize, you can do more, buy more, and invest more. If I was faced with the decision between winning $200 million and $100 million, I would have jumped at $200 million, but not anymore. After working with hundreds of sudden wealth clients over the years, I’ve since changed my thinking.
Don’t get me wrong though. You’ll often hear about the “lottery curse,” but I don’t think winning the lottery is or has to be a curse. Has it been for some winners? Absolutely. We’ve all read the horror stories of past lottery winners. However, I think winning the lottery – or any sudden wealth event – can be an opportunity. It certainly does not have to be a curse or create problems. Money can be used to better your life and the lives of those you love. It can provide peace of mind, security, and freedom to create and live the life you want.
So it may be surprising that I don’t think more is better. Here’s why. When the lottery jackpot gets to these absurdly big amounts, the media goes into a frenzy. The public wants to know who the winner is and what they’re going to do with the money. This can create a circus atmosphere, but not only that, you become famous overnight. Everyone knows that you are the billionaire lottery winner. I suppose there are worse things to be known for, but I value my privacy.
With this heightened level of exposure comes instant and relentless pressure to loan, gift, and invest your new money. It’s easy to block calls and ignore knocks at your front door from strangers, but undoubtedly you will get requests from friends and family (you might be able to remain anonymous). It can be hard to say “no” or “not now” for a lot of people. The new money can put pressure on relationships. It’s also common for friends and family to view the winner differently and to treat them differently. Could several hundred million dollars help you grow a thick skin? Sure, but it’s not just your feelings and relationships at stake. If you have kids they will be treated differently also — everything from being teased to being taken advantage of. While it may be manageable for you, it may be more difficult for your teen.
At the end of the day, I really like my life. I love my wealth management firm and the people I work with. I love my neighborhood and relationships I have with family and friends. In working with sudden wealth clients, I find that most really liked their lives before the windfall as well. Their goal was to use the money to improve their life, but not to radically change it.
This is why I think having $30 million after tax may be the perfect amount. In order to net $30 million (remember, you have to pay income tax on your winnings) the jackpot would need to be about $100 million since the cash option is typically about 60% of the annuity amount. People win $100 million jackpots all the time and you never hear about them. In fact, if you won $100 million tomorrow, I’d guess your neighbors and even your kids wouldn’t know.
The $30 million, if invested wisely, could allow you to live on $1 million a year with little risk of ever running out of money. This would then allow you to live your life in anonymity, but have the resources and freedom to do all of the things you might not be able to do now. The perfect amount of money is an amount that can improve your life but that does not upend it.
Of course, if you happen to win the big jackpot, all hope is not lost. There are proven principles and strategies you can follow that will help you make the most of your win. And even if you don’t win, I think playing the lottery can be a good investment.
Is more better? Not necessarily. Learn what this sudden wealth financial advisor thinks is the perfect amount of money to win.
List Of Financial Advisers To Ask For Help
Table of Contents
Robert Pagliarini, CFP, EA
Pacifica Wealth Advisors, Inc.
Personal Finance Columnist
Liz Weston is a personal finance columnist for NerdWallet. Questions may be sent to her by using the contact form on her website.
Nick Holeman, CFP
Certified Financial Planner
Nick enjoys teaching others how to make sense of their complicated financial lives. Nick earned his graduate degree in Financial and Tax Planning and has since helped countless individuals and families achieve their goals.
After working on Wall Street in investment banking, sales and trading, and obtaining an Executive MBA in Finance, Kaplan started her own firm to offer asset management and retirement planning. She and her team can craft a plan so you can live a retirement free from financial worry.
Lance Scott founded Bay Harbor with the mission to be a trusted financial partner by helping clients focus on living life with financial confidence – today and long into the future.
Rob is a CPA, CFP® wealth advisor and an official member of the Forbes Finance Council.
Stacy Francis CFP®, CDFA™, CES™
Stacy owns an award-winning fee-only comprehensive Wealth Management firm dedicated to providing clients ongoing financial guidance.
Greg Ostrowski, CFP®
Greg and his group offer wealth management & low-cost, flat-fee 401(k) help for individuals.
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List Of Financial Advisers To Ask For Help Table of Contents Robert Pagliarini, CFP, EA President Pacifica Wealth Advisors, Inc. PacificaWealth.com Liz Weston Personal Finance