Lotto dreams can have a downside
It sounds like a dream come true - enough money to buy that mansion, that flash car, that around-the-world trip, with enough left over to put you in the lap of luxury for the rest of your life.
But though a $24 million Lotto payout sounds good, the sudden influx of cash can turn reality into a nightmare and becoming a millionaire overnight can leave winners disgruntled, a psychologist says.
Lotto's Powerball jackpot did not get struck on Saturday, making this week's draw now worth an estimated minimum of $24 million. The odds of winning are 1 in 38,383,800.
The Powerball jackpot can go to $30 million before the Lotteries Commission calls a must-be-won week. If won by a single person, the $24 million will be New Zealand's largest Lotto haul. The biggest combined Lotto Powerball prize won to date was $19,054,243, sold at Pak'n Save New Plymouth for the April 5 draw this year.
Lotteries spokeswoman Karen Jones said yesterday that a lot of people did not understand the planning required, long after the winning numbers have been circled. "With large sums of money comes large amounts of responsibility," she said. "It is tax-free but as soon as you put it in an interest bearing bank account, you've got to pay tax on the interest."
Gift duty also applies. Some people might give $1 million to their family, but that is taxable. "People come in to the office and sometimes start writing out cheques for hundreds of thousands, and I ask, `Do you really want to do that?"'
She suggests that winners do practical things like updating their wills, talking to a lawyer and making sure they work out how they're going to manage their money.
Psychologist Sara Chetwin said the reality of winning Lotto often leaves people bewildered as they come face-to-face with the new reality: they are rich. "But there will always be people who win big but for whom it's still not enough."
Big winners were often "ill-equipped" to know what that situation will bring for them; the notoriety, the response from people, the jealousy, some of the negative connotations of winning Lotto.
More than two million tickets were sold last week - about 500,000 more than usual - in a week in which none of the most frequent numbers - 1, 7 and 21 - was drawn.
The Dominion Post