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Jackpot Winners Should Be Wary Of Potential Financial Pitfalls

Winning a huge sum of money from gambling is the dream of virtually all gamblers. For many, it's the sole reason they purchase their weekly lottery tickets or spin the reels of a casino slot machine. But imagine what you would do with all that mullah? Many winners simply blast through it in no time at all. Leaving them with nothing but debts. So it's essential you do some financial planning with a tax adviser and accountant. Use it to plan your way to a better, brighter and more secure future.

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Ways Lottery And Jackpot Winners Blow Their Cash

We’ve all seen the stories in the media about lucky gamblers and jackpot winners who come into millions in the blink of an eye and equally quickly manage to blow through it all. Instead of investing, the money has gone on lavish gifts and frivolous purchases. Even more surprisingly, many have used these to get credit and you’ll be surprised how many end up, not just with pennies, but also with huge debts. If you do manage to land a multi-billion-dollar payday when you finally win the jackpot online, then by looking at the ways the winners have foolishly blown their cash, you may get some ideas about how to protect your newfound wealth.

Friends And Family

Many people find it difficult to tell their family members “no” to anything. In the general day today, this isn’t so problematic. But if you happen to come into a mountain of cash, then this is probably one of the few situations where you need to be stronger. We’re not suggesting that you should be greedy and try to hang onto every cent. But your second cousin twice removed really needs to work out their own finances without coming to you with an outstretched hand.

Unknown Relatives Suddenly Turn Up

In truth, this is a difficult decision to make. Unfortunately, when you examine the vast majority of bankrupted gambling ex-millionaires, you’ll see that huge a amount of that wealth was sucked away by their relatives. Everyone has an uncle with an unrealistic dream that the bank will not finance. So he’ll come to you with his crazy jackpot winning strategies for his new business venture. We suggest that just because he might consider you have the means to help, doesn’t translate to a requirement to help.

Our suggestion is that you simply fly under the radar and remain totally anonymous. Many jackpot winners have taken this route and you’ll find that virtually all casinos like Bovada Casino and lotteries allow winners to remain anonymous. Doing so will give you time to work things out. To properly form a practical exit strategy depending on the sums you’ve managed to win. But at the end of the day, don’t be afraid to say a firm “no” to those who ask.

Letting it Ride

In some ways, it’s not surprising that a number of winners will lose all this money as they continue gambling. We see this most often when it comes to slot machine winners. The thing about slots is that it’s inherent within their design to take all your money over a long period of time. A player may lose or win over the short term. But at the end of the day, thanks to the house edge, the house always wins. Hitting a $15 million jackpot may encourage a player to bet larger amounts as they are now able to better weather the ebbs and flows.

But just because you are now worth millions doesn’t mean the slot machines are going to be any more favorable towards you. On another level, having huge sums of money at hand may mean that the one-dollar slot machine doesn’t give you the same thrill or appeal as before. This is a dangerous road that can lead to a certain trouble. Just because your pockets are now bulging with cash thanks to the jackpot slots, don’t let yourself make bets that will compromise your jackpot.

You can find all the casino games at the Bovada Casino

The State and Federal Government Want Their Share

How many jackpot winners who are excited about landing such a huge amount of cash completely fail to consider that a substantial part of these winnings belongs to Uncle Sam? The Federal government will take at least 25%. There may also be additional taxes at the State level, depending on where you’re gambling. Many players are quick to buy a multi-million dollar home. Yet they fail to consider that there will be property taxes to pay.

Hire A Tax Advisor

Furthermore, if there is going to be generous and give friends and family over $15,000 a year, then they will need to pay gift taxes. Whether at the Federal or State level, all these taxes add up and will need to be paid. Yet so often you’ll find the winners don’t even consider them. If you’re a wise winner, then you will immediately hire a financial planner, an attorney, and an accountant, to help you protect your assets. It’s an unfortunate fact of life that just by having and spending money, you’re going to have responsibilities and bills piling up.

Philanthropic Good Will

It’s an unfortunate by-product of winning, what many see as easy money, that you have to deal with all sorts of people coming out of the woodwork for a piece of the pie. Many of these will be philanthropic in nature. We’ll be the first to admit that charities do a good deal of work for people in need. This cannot be disputed. But it’s important to understand exactly who and for what purposes your money will be spent. You might be surprised how many charities spent the vast majority of their received donations on the top directors.

It’s Easy To Be Over-Generous

Furthermore, it’s possible that you may end up being too generous when it comes to giving to charities. Remember you can only help others from a position of strength. Giving away too much of your newfound wealth may leave you with problems. Investing your money wisely is not a shameful thing. It’s probably best to leave something to charity when you finally shuffle off to the great casino in the sky. But whilst you’re still kicking around on earth, you should watch every cent.

Jackpot Winners Blow Money on Depreciating Assets

Thanks to the relatively new Instagram and TikTok culture, the nouveau riche is all about flexing their wealth. So it’s no surprise to see casino jackpot winners splurging money on Ferraris and Lamborghinis. Posing for their social media followers whilst decked out in flashy jewelry. But these are all depreciating assets and quickly lose their value. By purchasing them, you’re only throwing away your money.

Super Cars And Super Yachts

We will be the first to admit that blasting around in an Italian supercar is great fun. But rather boringly, it provides nothing for the financial security of your future. Winning $200 million on the lottery makes many people feel they can afford to splurge $200,000 on a used car. But in doing so, you’re being nothing less than reckless. One of the reasons why we suggest you need a financial adviser is to help you focus on purchases that will both appreciate in value and help your lifelong finances. He will probably steer you towards house and stock market investments. Although these are not as flashy as the latest Ferrari, they will hold or increase the value over time.

Jackpot Winners Forget the Value of a Dollar

You’ll be surprised how quickly winners of progressive jackpot lotteries that reach over $25 million loose sight of the fact that, just because you have more money, doesn’t mean that the dollar has greater value. In other words, they change from a more frugal lifestyle into one where they’re tossing money around indiscriminately. You might be in shock as to how quickly you can spend this type of cash foolishly. And end up with nothing to show for it. When you’re relatively poor, $10,000 seems a fortune. But after you’ve won the jackpot from Bovada Casino, then it seems like a mere drop in the bucket. Such thinking can quickly lead down a road that ends in bankruptcy.

Though it may be difficult, it’s essential that you’re able to step back and look at the big picture. You may feel pressure from family and friends to start spending. But we suggest that you be sensible and in some ways do the opposite of what others expect of you. Now is the time to tighten your budget and be wary of your finances. If you’re careful, you will have a comfortable life being able to do what you want. And on just a small percentage of your total winnings.

Jackpot Winners Should Read The Fine Print

Many players are unaware that the huge jackpot they’ve just won may come with some pretty stringent terms and conditions. Ones that will affect the actual payouts. For example, many jackpot slots prizes pay out an annuity as opposed to a lump sum. In the same manner, the vast majority of lotteries give jackpot winners a choice of receiving an annual payout or a lump sum. On the whole, taking all the money in one go is always the preferable option. But if you’re worried about your self-control when it comes to spending habits, then there’s no harm in accepting an annuity that may last for over 20 years.

At least with this last option, you’re assured of a steady income stream for at least two decades. But it’s equally important not to fall into financial problems simply because you believe that the annuity payment will save your bacon each year. As a given, you should try to live within your means. With the rest of the money being gravy. After all, if you’re able to save anything in 2022, you’re not doing so badly.