The chances of being struck by a meteorite are about 1 in 250,000; how many people do you know that have been killed by a meteorite? Well, the chances of winning the Powerball in September 2021 were 1 in 295 million. That means that your chances of winning the lottery are almost certainly zero, so winning one is a miracle on its own. It is still nice to be optimistic and spend that change on the tickets because you just never know what fate might have in store for you. However, before you pay for that ticket, here are some facts you need to know before you buy your next lottery ticket.
The Advertised Amount Is Only Received If You Take Annuities
When your local state lottery says the jackpot is $10 million, what they mean is that you will get that money if you accept to take annuities for 20 to 30 years. They will apply a concept called the time value of money to your winnings if you decide to take all your money in a lump sum in which case you will receive the perceived value of the total winnings at that particular time. That is why a $10 million dollar jackpot will be about half before it is even taxed if you decide to take it all t once.
Playing Frequently Doesn’t Help Your Chances Of Winning
It is true that most people that win the lottery are the ones that play frequently but most people lose over $1000 every month for their lifetimes without ever winning the lottery. That is because buying a ticket for the next draw after losing the previous one doesn’t increase your chances of winning in any way. It is even better to buy many tickets in one draw because that way, your odds increase. It is very little you can do to improve your chances of winning the lottery though.
Don’t Buy If You Can’t Afford It
Americans spend nearly $100 billion every year on lottery tickets and that amount keeps going up every year but the number of winners doesn’t change. The truth is that millions of people lose the little money they would have spent on something else on worthless lottery tickets every month. It is therefore not advisable to spend your last penny on a lottery ticket because it is more likely than not that that is money spent on nothing. The saddest part is that it is the poorest of households who spend the most on lottery tickets which have been considered a form of tax on the poor for years.
You Have To Buy Your Ticket Legally
Controversy always rises when people win the lottery only to be denied their winnings because their ticket wasn’t acquired legally. A man was arrested in Sacramento, California in 2019 after stealing his roommate’s lottery winning ticket and swapping it with a non-winning one. Another man had to share winnings with his ex-girlfriend because he used her money to buy a winning ticket. It is, therefore, safe to use your own money to buy lottery tickets and ensure that you buy it yourself.
You should sign your winning ticket
People win the lottery sometimes but never get to keep the winnings because they forgot about the ticket or lost it. Now, a lottery ticket is what they call a bearer instrument meaning if someone else signs and presents it with a photo ID, they will get your winnings. You should therefore sign the back of your ticket when you win and keep it safe for long enough to present it. If you don’t sign it and someone else picks it up, chances are they may well take your winnings.
Buying During The Rush Doesn’t Help
When the Jackpot becomes bigger, people tend to rush to buy more tickets. As more people buy tickets, the chances of multiple people drawing the same number increases which means you are likely to share your winnings with other people. Buying more tickets during the rush doesn’t increase your chances of winning that much either. You should therefore not lose your money to more tickets in the hope of changing your life with the huge Powerball because it may not materialize.
It Is Heavily Taxed
If you don’t pay your taxes or don’t plan on paying, then it will be smart not to buy a lottery ticket. The lottery winnings are taxed by both the federal government and the state government unless your state is one of the few that don’t tax lottery winnings. The lottery agency will withhold 25% of your winnings as federal tax and the state may tax you another 10% to 13%. So, however high the winnings are, you have to be ready to lose about 40% of that to taxes.
Taking A Lump Sum Is Never A Good Idea
Most people that win the lottery choose to take their winnings in a lump sum which leaves them with a lot of money that they may not spend responsibly. No one is ever prepared for lottery winnings and that is always a recipe for disaster. Taking a lump sum also puts you in the highest income tax bracket for the year which means you will pay more taxes than you would if you took annuities instead.
You Can Get Addicted To Buying Lottery Tickets
Considering the amount of money spent on lottery tickets compared to the amounts that people eventually win, it is true to say that the lottery is one of the least profitable forms of gambling in the world. It is still a form of gambling that cashes in on people’s hopes of getting rich quickly and many people spend lots of money on tickets regularly. Some people actually get addicted to the practice of buying hundreds or even thousands of lottery tickets and keeping them away in their drawers. You have to be very careful because it can easily become a very dangerous addiction.
You Can Choose To Be Anonymous After Winning
When you win the lottery, it is very easy to become a celebrity and it doesn’t work out so well in the end when you don’t spend your winnings responsibly. Most states don’t allow you to be anonymous when you win the lottery though. In the US, California and Wisconsin prohibit anonymity when you win the lottery. It is still safer to choose to be anonymous if your state allows it though. If the state prohibits anonymity, you can hire a lawyer and have them show up and speak for you when your win.