Someone won the Powerball lottery a few weeks ago. Like most winners, she took the lump sum, and that’s a big mistake. My friend Butch tells me when he wins the lottery I will be the first person he calls. If his ship comes in, he already knows the lump sum is the wrong choice.

Lottery winners have the option of a lump sum, or a series of payments stretched over 30 years. With the Powerball, the 30-year annuity also provides a 5 percent annual increase. Statistically, the lump sum gives you more potential to grow the windfall. The name of the game is not to die with the big pot of money but to avoid running out of money. Don’t forget that one in three lottery winners blows the bundle. One in three is the chance Nate Silver gave Donald Trump of winning last year along with the Chicago Cubs winning the last two games of the 2016 World Series. It happens.

Studies consistently show lottery winners have a much higher risk of declaring bankruptcy than non-winners. The usual suspects include friends, family, and bad business or personal decisions. Author Rick Bragg grew up in poverty. Despite his talent and good fortune, he held off buying his mother a home until he could pay cash. He didn’t want his mama to lose it because that would be worse.

In 1988, a Pennsylvania winner went through $16 million in one year. A former girlfriend successfully sued him for one-third, and his brother hired a hitman expecting an inheritance. In retrospect, the winner ruefully noted he was “better off when he was broke.” A couple from Great Britain ended up divorcing and blamed their lottery winnings. Every dark cloud has a silver lining, so the cliché goes. A Canadian won $10 million dollars and blew everything. However, she did set aside some in trusts for her children who can claim it at age 26. Shakespeare had it wrong; she hired a shrewd attorney.

The list of lottery winners who mismanage their finances goes on and on. Taking the 30-year annuity practically eliminates the chances of blowing it. The Powerball winner chose an after-tax lump sum of $336 million versus spreading it over 30 years, roughly $11 million annually. I don’t get it. $336 million versus $11 million plus for 30 years; there is not a lot of difference, just details.

The Dallas Morning News reached out to real billionaire Mark Cuban, who also advised against taking the lump sum. He recommended hiring a tax attorney and reminded the winner, “If you weren't happy yesterday, you won't be happy tomorrow. If you were happy yesterday, you are going to be a lot happier tomorrow. Life gets easier when you don't have to worry about the bills.”

You can’t always get what you want, but Buz Livingston, CFP can help figure out what you need. For specific recommendations, visit or come by the office in Redfish Village, 2050 Scenic 30A, M-1 Suite 230.