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The Associated Press
So you just won the $550 million Powerball jackpot, the second highest in lottery history. Now what?
Perhaps it's time for a tropical vacation or a new car. There are bills to pay, loans to settle, debts to square.
Past winners of mega-lottery drawings and financial planners have some more sound advice: Stick to a budget, invest wisely, learn to say no and be prepared to lose friends while riding an emotional roller-coaster of joy, anxiety, guilt and distrust.
“I had to adapt to this new life, “said Sandra Hayes, 52, a former child services social worker who split a $224 million Powerball jackpot with a dozen co-workers in 2006, collecting a lump sum she said was in excess of $6 million after taxes.
“I had to endure the greed and the need that people have, trying to get you to release your money to them. That caused a lot of emotional pain. These are people who you've loved deep down, and they're turning into vampires trying to suck the life out of me.”
The single mother kept her job with the state of Missouri for another month and immediately used her winnings to pay off an estimated $100,000 in student loans and a $70,000 mortgage.
She spent a week in Hawaii and bought a new Lexus, but six years later still shops at discount stores and lives on a fixed income — albeit, at a higher monthly allowance than when she brought home paychecks of less than $500 a week.
“I know a lot of people who won the lottery and are broke today,” she said. “If you're not disciplined, you will go broke. I don't care how much money you have.”
Lottery agencies are keen to show off beaming prize-winners hugging oversize checks at celebratory news conferences, but the tales of big lottery winners who wind up in financial ruin, despair or both are increasingly common.
There's the two-time New Jersey lottery winner who squandered her $5.4 million fortune.
A West Virginia man who won $315 million a decade ago on Christmas later said the windfall was to blame for his granddaughter's fatal drug overdose, his divorce, hundreds of lawsuits and an absence of true friends.
The National Endowment for Financial Education cautions those who receive a financial windfall — whether from lottery winnings, divorce settlements, cashed-out stock options or family inheritances — to plan for their psychological needs as well as their financial strategies.
The Denver-based nonprofit estimates that as many as 70 percent of people who land sudden windfalls lose that money within several years.
“Being able to manage your emotions before you do anything sudden is one of the biggest things,” said endowment spokesman Paul Golden. “If you've never had the comfort of financial security before, if you were really eking out a living from paycheck to paycheck, if you've never managed money before, it can be really confusing. There's this false belief that no matter what you do, you're never going to worry about money again.”
David Gehle, who spent 20 years at a Nebraska meatpacking plant before he and seven ConAgra Foods co-workers won a $365 million Powerball jackpot in 2006, used some of his winnings to visit Australia, New Guinea and Vietnam.
He left ConAgra three weeks after he won, and now spends his time woodworking and playing racquetball, tennis and golf.
But most of his winnings are invested, and the 59-year-old still lives in his native Lincoln. He waited for several years before buying a $450,000 home in a tidy neighborhood on the southern edge of town.
“My roots are in Nebraska, and I'm not all that much different now than I was before,” Gehle said. “I'm pretty normal. I never was the kind of guy who went for big, expensive cars or anything like that. I just want something that runs.”
In the first year after he won, Michael Terpstra would awaken many nights in a panic. Had he slept in? Was he late to work the night shift?
“At times I'd wake up and this would all seem like a dream,” the 54-year-old said. “I'd have to walk around the house and tell myself, I did win. I'm not working anymore, and I do live here. I didn't get drunk, break into someone's house and go to sleep. This is where I'm supposed to be.”
His new home is a roomy, two-story house in south Lincoln with a big-screen television and paintings of Jesus on the walls. He no longer uses alarm clocks and spends his days taking his 92-pound black lab, Rocco, on walks.
He was terrified when he first won, convinced that he would lose all of the money and have to return to work. So he lives carefully off the interest from conservative investments, with help from accountants and lawyers. He bought the new house and a truck, but struggles to name any extravagant purchases.
“I can't buy a super yacht. I can't buy a Gulfstream,” he said. “Then again, I don't think I'd use either one, so why would I buy one?”
That said, some mega-winners still can't resist the lure of big jackpots, at least not the two-buck chances.
On Tuesday, former ConAgra worker Dung Tran, a Vietnamese immigrant, walked into the same Lincoln U-Stop where he purchased the winning ticket six years ago and bought 22 more from the very employee who sold him the first prize-winner, said cashier Janice Mitzner.
“We joked about it,” she said. “I told him, 'Wouldn't it be something if you won again?'”
Hayes is also hoping to strike rich again — she bought 10 tickets at a Dirt Cheap liquor store on her way home Tuesday while speaking with an Associated Press reporter.
Unlike many big winners, she has kept a visible public profile instead of going underground, appearing on a 2007 reality TV show (”Million Dollar Christmas”), writing an online Life After the Lottery blog and self-publishing a short book, “How Winning the Lottery Changed My Life.”
“We have this drawing tomorrow, and if somebody wins, God bless them,” she said. “They're going to need those blessings.”
The numbers drawn tonight are: 5, 16, 22, 23, 29 and Powerball of 6.
A lottery official said late tonight that the jackpot increased to $579.9 million by the time of the drawing, making the cash option $379.8 million.
And here's the link where you can enter the numbers from your ticket on your computer to see if you have a winner:
And go to AP News under the Nation/World dropdown above for the latest on who and where there might be a winner or winners.
The record Powerball jackpot just keeps rising. It now stands at $550 million after officials say brisk sales keep driving up the payout amount.
The jackpot was boosted to $500 million on Tuesday and raised again this morning to $550 million.
A winner taking the cash option would get $360.2 million before taxes.
The numbers are an estimate and could be increased again as the drawing nears.
Powerball officials say they now believe there is a 75 percent chance that the winning combination of numbers will be drawn tonight at 7:59 p.m.
The historic Powerball jackpot rose to $500 million Tuesday was all part of a plan lottery officials put in place early this year to build jackpots faster, drive sales and generate more money for states that run the game.
Their plan appears to be working, here in Washington state and the 41 others in which the multistate lotto game is played. Tonight's drawing offers a jackpot that is the second-highest in the history of this hemisphere.
Powerball tickets doubled in price in January to $2, and while the number of tickets sold initially dropped, sales revenue has increased by about 35 percent over 2011.
Sales for Powerball reached a record $3.96 billion in fiscal 2012 and are expected to reach $5 billion this year, said Chuck Strutt, executive director of the Des Moines, Iowa-based Multi-State Lottery Association, the group that runs the Powerball game.
There has been no Powerball winner since Oct. 6, and the jackpot already has reached a record level for the game. It was first posted at $425 million but revised upward to $500 million when brisk sales increased the payout.
It's the second highest jackpot in lottery history, behind only the $656 million Mega Millions prize in March.
It took nine weeks for the Mega Millions jackpot to get that high, before three winners — from Kansas, Illinois and Maryland — hit the right numbers, each collecting $218.6 million for their share of the split.
With soaring jackpots come soaring sales, and for the states playing the game, that means higher revenue.
“The purpose for the lottery is to generate revenue for the respective states and their beneficiary programs,” said Norm Lingle, chairman of the Powerball Game Group. “High jackpots certainly help the lottery achieve those goals.”
Of the $2 cost of a Powerball ticket, $1 goes to the prizes and the other dollar is kept by the state lottery organization, said Lingle, who also is executive director of the South Dakota Lottery. After administrative overhead is paid, the remaining amount goes to that state's beneficiary programs.
Some states designate specific expenditures such as education, while others deposit the money in their general fund to help supplement tax revenue.
The federal government keeps 25 percent of the jackpot for federal taxes.
Most states withhold between 5 percent and 7 percent. There's no withholding in states without a state income tax such as Washington, Delaware, Pennsylvania, South Dakota, and Texas. A New York City winner would pay more than 12 percent since the state takes 8.97 percent and the city keeps 3.6 percent.
Powerball and Mega Millions games are seeing jackpots grow faster and higher in part because the states that play both games agreed in 2010 to sell to one another.
Both games are now played in 42 states, Washington, D.C., and the Virgin Islands. The larger pool of players means jackpots roll over to higher numbers faster, which tends to increase the buzz about the jackpots which increases sales. It all can result in higher jackpots sooner.
“It really happened with both of these games became national games,” said Terry Rich, CEO of the Iowa Lottery.
Still, just seven of the top 25 jackpots occurred after January 2010 when the cross-selling began. That just points to the unpredictability of games of chance like lotteries. It still comes down to the luck of the numbers, Rich said.
It has been proven that once the jackpot reaches a certain threshold more players buy.
The Quick Shop in Ottumwa, Iowa, is one of the state's highest-volume lottery ticket sellers due to its location across the street from a John Deere farm implement factory.
“It's picking up by the minute,” said store owner Mark Ebelsheiser. “We're selling probably 60 to 70 percent more than normal. When it gets up this high they really come out and get them.”
Bob Allison, a retired Indian Hills Community College instructor and administrator, buys tickets weekly for a group of people at the college in Ottumwa. On Tuesday he and two golfing and fishing buddies went in together to buy additional tickets. Allison said he usually buys a few additional tickets when the jackpot gets so high.
He said he'd make a lot of people very happy if he won.
“My kids would probably retire quick,” said the father of three daughters.
Between $20 and $30 million in tickets were sold between Wednesday and Saturday drawings for most of October. Once the jackpot hit $100 million on Oct. 27, nearly $38 million worth of tickets were sold by Oct. 31. As the jackpot grew to more than $200 million on Nov. 17, sales surged by nearly $70 million by the next Wednesday. Then the jackpot reached over $300 million on Nov. 24 and ticket sales over the next four days surpassed $140 million.
“Somewhere around $100 million those occasional players seem to come back into the stores in droves,” said Rich, the Iowa Lottery CEO. The lottery also notices a significant increase in workers and other groups joining together in pools to combine resources to buy numbers, he said.
Trina Small, manager at the convenience store in Bondurant, Iowa, where a couple bought a $202 million ticket on Sept. 26, said sales have been heavy. She said Monday night Powerball sales were at about $800, at least $200 more than normal. She expects Tuesday and Wednesday sales to be even more.
“It's kind of like Black Friday all over again,” she said.
Small doesn't usually play the lottery herself but said she may buy a chance at the record jackpot. She's just trying to decide if her chances are better buying it elsewhere since a jackpot ticket was sold at her store just two months ago — the old adage about lightning striking twice.
“The odds are against you anyway but I'm pretty sure they're more against you getting one from this store,” she joked.
Powerball has posted sales exceeding $714 million in the current jackpot run since early October and it's possible more than $1 billion in tickets will have been sold by the end of today when the next drawing is held.
A single winner choosing the cash option would take home more than $327 million before taxes.
Strutt said the chance of getting a winner tonight is approaching 60 percent.