What you should do after winning the Powerball jackpot?

We thought we would have some fun with this as Powerball fever sweeps the nation. Someone, somewhere in America or a group of people are about to have their live’s changed forever. We have all heard about the horror stories of those previous winners that are now bankrupt. It doesn’t have to be that way. So here are some perspectives along with a few things you should do first.

1) Sign all your tickets as soon as you buy them. This will insure no one can cash your ticket. The tickets are considered bearer paper so the winner is the one who possesses it.
2) If you win, make copies of the ticket (front and back) and go right to a bank and put it in a safe deposit box.
3) Call a fee-only financial planner immediately so they can arrange for a group meeting with a CPA and Attorney. Trust us, they will drop everything for you. And don’t be affraid to pay good people good money for sound advice, after all the uber wealthy have a great team around the to protect and grow their wealth.
4) You should always take the cash option because you don’t want to be a creditor of the state in which you won the lottery.
5) Go buy something. We have read a lot about behavioral finance after receiving a lump sum and we believe the right thing to do is to actually go treat yourself. Get it out of your systme but don’t go crazy. Buy something you have always wanted but then be done with shopping until you have developed your plan for moving forward.

Some food for thought. The Powerball jackpot is $1.5 billion and the cash option is estimated to be roughly $900 million. After tax you will walk away with approximately $560 million. To put this into perspective you could spend $60 million the first year on that beach house, G5 private jet, a new home and some other fun toys and be left with $500 million to invest. If invested at 5% a year, which can be tax-free through municipal bonds, you will earn $25 million a year. That’s approximately $2.1 million a month, every month, for the rest of your life and your heirs life, tax-free! So go spend $2.1 million a month and realize, you will get another $2.1 million the next month! We are pretty sure you won’t exhaust your money if you put yourself on a $2.1 million a month budget!

Chesapeake Financial Advisors is a fee-only financial planning, investment advisory and tax planning firm with offices in Towson, Bel Air and Columbia, Maryland.