Spend Your Lottery Money Wisely
By: Robert Bumsted
Updated: November 28, 2012
Powerball Fever has hit the Summit City -- Local stores say they've sold more tickets than ever for this week's $550 million jackpot.
But winning all that money comes with a lot of responsibility.
"If you're not used to handling that type of finances, it's a lot of money," says Ali Farhoumand, a financial advisor at One Resource Financial Consultants in Fort Wayne. His firm has handled several lottery jackpot winners in the past.
"One thing to keep in mind is that you're going to have a lot of new friends, a lot of new family members that will hit you up for help. Keep it as private as possible."
Farhoumand says the temptation for many lottery winners is to spend most of the money all at once on luxury items and extravagant gifts, but even a half-billion dollar jackpot can seem small once taxes are paid.
"By the time you take the lump sum it's down to $250 million or so, so you're going to end up paying 40 percent more in federal and state income tax so maybe then you'll only be down to about $170 million or so," says Farhoumand.
The best strategy: Make the money last with investments, and don't let outside interests influence your decisions.
But winning all that money comes with a lot of responsibility.
"If you're not used to handling that type of finances, it's a lot of money," says Ali Farhoumand, a financial advisor at One Resource Financial Consultants in Fort Wayne. His firm has handled several lottery jackpot winners in the past.
"One thing to keep in mind is that you're going to have a lot of new friends, a lot of new family members that will hit you up for help. Keep it as private as possible."
Farhoumand says the temptation for many lottery winners is to spend most of the money all at once on luxury items and extravagant gifts, but even a half-billion dollar jackpot can seem small once taxes are paid.
"By the time you take the lump sum it's down to $250 million or so, so you're going to end up paying 40 percent more in federal and state income tax so maybe then you'll only be down to about $170 million or so," says Farhoumand.
The best strategy: Make the money last with investments, and don't let outside interests influence your decisions.
