Powerball: How to Cash in When You Don’t Win
April 09, 2012My son reminded me that if you don’t buy a ticket, the odds of winning the Powerball lottery were zero. He also said, “Someone has to win you know.” He does have a point and that line of thinking is shared by many people who are in a frenzy buying lottery tickets even though the odds of winning a mega-jackpot are 175.7 million to one. I didn’t play the Powerball but I have to admit that I did buy into the California lottery pool with a bunch of my co-workers only because if they DID win, I wouldn’t want to be left behind.
As a student of human behavior, the question I ask is “What is all the excitement about here?” Forbes blogger Debra Jacobs’ post on “10 Things To Do With Your Lottery Winnings” got over 170,000 hits (as of this writing) and kept climbing until three winning tickets were drawn for the $640 million jackpot. Everyone knows their chances of winning are slim to none but there is still a little tiny ray of hope that you might win. Somebody has to, right?
As a financial planner, the question I ask is “What specifically are you dreaming about doing with the winnings?” First on many people’s list is to quit their job. With a mega-jackpot and hundreds of millions of dollars coming in, you wouldn’t have to worry about working for a living since you would have the ultimate financial freedom. With a mega-jackpot, you can travel around the world AND bring family and friends with you. Upgrade your vehicle and then your wardrobe – you can have everything. It’s an exciting thought to have no money pressure and the world at your fingertips.
Let’s face it, you aren’t going to win.
The fact is lottery winners aren’t all that happy anyway. Dr. Brad Klotz, a psychologist and author of Mind Over Money: Overcoming the Money Disorders That Threaten Our Financial Health writes, “After an initial period of giddiness, even lottery winners are not significantly happier. One study showed that they report experiencing LESS pleasure in ordinary activities than accident victims. In some cases, winning the lottery has been shown to lead to severe depression. While most people cling to the idea that their problems would be solved if they only had more money, this is simply not true.”
You can still get what you want.
Once you’ve established the fact that you are probably not going to be “that guy,” don’t let your dreams and the excitement die. Consider this, you may not be able to do every single thing you dreamed about doing if you won the lottery but you can still do the top one (or maybe even the top three) on your own with a little planning.
Seriously, think about what you would do if you won the lottery. If you bought a ticket, you’ve probably already talked about it on the way home from the store. That list as well as your spouse’s is top of mind so go ahead and pick the most important thing. Don’t quit your job, of course, but you can join the ranks of the early retirement extreme movement who are making that dream a reality. They live off 25% of their income and save 75% so they CAN be in a financial position to retire sooner than later and realize the dream of ultimate financial freedom.
Resources: How to be Financially Independent in 5 Years or Less No Matter What Your Age
Whatever else was on the list, you can make that happen too. We forget how much money actually slips through our fingers in a lifetime – hundreds of thousands of dollars or even millions of dollars. Think about this, an employee who makes $50,000 a year and gets no promotion or bonus but only a simple 3% increase over their working career of 35 years will earn over $3,000,000 dollars. Literally, millions of dollars flow through American households each year and many of it is wasted by overspending, paying high interest on debts, not optimizing tax deductions, and simply not targeting savings for goals. Pick number two and set a target to realize that dream too.
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My suggestion is to catch the excitement of Powerball fever by channeling the excitement into making your top dream a reality. Re-frame your outlook and realize that you actually already won.
I’d still play the lottery pool in your office so just in case your co-workers win, you won’t be the last man standing.