Elena Scotti/FUSION

I just bought a lottery ticket. Don’t scold me.

I won’t! Buying a lottery ticket is fine, and sometimes even sensible. You’re buying something valuable, which is a dream of untold wealth. And if you buy lottery tickets occasionally, you might even avoid stupid gambles when you start investing money you can’t afford to lose.

Advertisement

So it’s OK that I bought 20 lottery tickets?

No, that’s just a waste of money. The value of the dream is the same, no matter how many tickets you bought.

Advertisement

But now I have 20 chances to win! Come Saturday night, I might be a gazillionaire!

Advertisement

Don’t get too excited! Each ticket represents a 1 in 292.2 million chance of winning. You are 417 times more likely to get struck by lightning in a given year. And gazillion is a stretch: with the jackpot at $1.3 billion, the cash value is about $800 million, which works out to roughly $500 million after taxes, depending on where you live. Certainly enough to get by.

Wow, $500 million. That’s a bit scary.

You’re going to be unfathomably rich, you’ll have so much money that you’ll almost be physically incapable of spending it all during your lifetime. Being that rich is a serious responsibility!

So, if I win, I should probably take a deep breath, first of all?

Advertisement

If you win, the first thing you should do is sign the back of the ticket, and then put it in a safe deposit box. Take your time, there’s no rush to claim the prize.

And then?

Advertisement

Then you fight the urge to tell all your friends. They’ll find out sooner or later, but it’s a good idea to have a real plan for what you’re going to do when they find out.

I’m going to need some help here, aren’t I?

John Perry is a financial advisor for Morgan Stanley in Indianapolis. He represents about 35 high net worth clients with assets of as much as $5 billion. “You’re going to be approached by charities, by friends, by family, and you can’t help out everybody,” he says. “The important thing is to be surrounded by a good team of advisers—legal, tax, and financial.”

Advertisement

Advertisement

That’s three different things?

Yep. “I call it a tripod,” says Perry. “Legal adviser, tax adviser, and financial adviser. They hold up the client, and if you pull out one leg, it falls apart. You need all three.”

When do I get to have fun?

Advertisement

You don’t think it’s fun to set up an LLC that might be able to claim the prize while keeping your identity secret?

No! I want to throw a million dollars in hundred dollar bills up in the air, and then use one to light a cigar!

Advertisement

OK, just don’t put it on Instagram. You can definitely spend a bunch of money on frivolous things, but it’s a good idea to put, say, $100 million somewhere very safe first—and don’t touch it. That’s more than enough money to have an ultra-luxe lifestyle in perpetuity.

Advertisement

$100 million? That’s not even enough to buy a decent Picasso!

Yep. Although you’re going to be insanely rich, you won’t even crack the Forbes 400. (Minimum wealth required: $1.7 billion.) Sorry, there are still going to be a lot of people who are much richer than you.

At least my kids are going to be set for life.

Advertisement

Oh, there’s a whole industry devoted to making you worry about how all that money is going to screw them up. Which, it might well do.

Advertisement

So now I just need to decide: Do I take all the money in one lump sum, or opt for installments over 30 years?

From a purely financial perspective, the lump sum is probably better. But if you don’t trust yourself with money, or if you’re worried about the money being wasted or stolen, or even if you don’t want the pressure of being worth $500 million, then taking the installments might be smart. “It lessens pressure and prevents other folks from coming at you as hard,” says Perry. “You can say to opportunists, “I’m getting this over 30 years, not upfront, so I can’t buy you that island you want.”