What To Do If You Win Powerball's $150 Million Jackpot

According to an AMP financial advisor.
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Once in a blue moon, Australia's lottery pools peak to unthinkable figures. Earlier this year, a Sydney inner-city mother took home $107 million after winning the first division prize of a Thursday night Powerball jackpot in January.

Tomorrow, it's happening all again, but this time for a staggering $150 million.

As the old adage goes, you gotta be in it to win it - so what happens if you do happen to be in it, and you do happen to win it? 

AMP financial adviser Andrew Heaven confirmed what most of us might think in the early hours of such a huge win.

“Most of us dare to dream big and allow ourselves to think about what we would do if we were to win Powerball’s $150 million jackpot. Thoughts tend to jump to first-class flights, Ferraris and French champagne rather than the practical steps you should take to ensure you don’t win and then lose the lot."

“Winning the lottery can change your life in a single moment, but unfortunately, it doesn’t mean the end of life’s financial challenges. A sudden windfall brings with it a whole host of financial implications you may not have thought about."

“Managing a large lump sum of money can be a daunting task. It pays to take a strategic, long-term and sustainable view of how to spend and invest it so that you can live the life you want and make the money last as long as possible, if not forever.”

Andrew and the team at AMP shared with us their top five money moves that you should make if, by some miracle, the impossible happens to you tomorrow night.

Don’t spend anything – at least initially

It may be tempting to go on a wild spending bender with your newfound wealth – starting this Friday – but remember, it’s easier to lose $150 million than it is to win it. Treat yourself to something but avoid the temptation to put a dent in your winnings until you’ve come to terms with your new bank balance and been advised accordingly.

RELATED: What happens immediately after you win the lotto

Line up an ‘A’ team

What you can do immediately is seek professional advice and secure a team of experts around you. You’ll need help finding the best way to manage and even grow all those dollars to secure your long-term financial future. For example, while the actual winnings are tax-free, you will be taxed on any income you earn from that money. At the very least, your ‘A’ team should include a financial adviser, a lawyer and a tax accountant. Seek the best advice out there because you’ll need it. Now isn’t a time to rely on the advice of family and friends.

Set some goals

Think about what you want to achieve with your wealth and set some goals accordingly. Do you want to give a large chunk of your winnings to charity? Is helping your friends and family important to you? Or do you just want to live the high life for as long as possible? Once you determine what’s important to you, your advisers can help formulate a financial plan that will help protect and grow your money so that you can achieve your goals now and in the future. Setting goals will also help you manage the requests for financial assistance that you will start to receive once word gets out about your winnings.

Pay off lingering debts

The exception to the immediate ‘no spend’ rule is when it comes to debt reduction. There is no better investment than paying off bad debts. Most of us have debt whether it is HECS, credit card or mortgage debt. Consider wiping the slate clean on these debts once your winnings hit your bank account as when you’ve paid down a dollar of debt, that’s a dollar you no longer owe.

Establish a budget and live within it 

While $150 million is a lot of money, you will still need a budget of sorts to ensure you don’t end up with nothing. There are plenty of cautionary tales among previous lottery winners who spent beyond their considerable means and who ended up with less money than what they had when they hit the jackpot. Establish a budget that takes into account the amount of money you have and any income you’ll get from investments you make. This will help ensure your lifestyle is sustainable for the future.

RELATED: Who should you tell if you win the lotto?

Real talk: should you even play?

It’s important to note that Australians have a better chance of being struck by lightning or dying from a snake bite than winning the lottery, so consider whether your long shot at becoming a multimillionaire is worth the money you’ll pay for the ticket.

Mr Heaven said: “According to the Australian Gambling Research Centre and the Australian Government's Institute of Family Studies, regular lottery participants spend an average of $695 annually on tickets. You should consider whether there are other, more realistic ways you could use this money to try to get rich. 

"Putting these funds into a savings account, your superannuation account or investing it will almost certainly have a more positive outcome on your finances than taking a chance on the minuscule odds of winning the lottery."

In our opinion, though, if you're ever going to have a crack at the lottery, you may as well have a crack at the biggest one. Best of luck, bosses.

The advice in this article is general and readers should seek professional opinions before making any financial decisions of their own.