Buying a lottery ticket is an exciting prospect, but the reality of winning is that it’s much harder than you might think. A few lucky winners have made their dreams a reality, but most will end up blowing their winnings. The first thing that many lottery winners do with their money is spend it on expensive cars, luxury homes and haute couture. But it’s not all bad news — a few winners have found great ways to put their prize money to good use.
Lottery jackpots are incredibly high, which attracts huge crowds of hopeful players from around the world. The two biggest multi-state American lotteries – Powerball and Mega Millions – have astronomical jackpots and the highest winnings of any lottery. But that doesn’t mean they’re the best to play. To find the right lottery for you, consider the prize structure and odds. For example, some lotteries offer unique prizes, like the EUR20,000 a month for 30 years offered by EuroDreams. These types of unique prize structures can be more interesting and appealing to players than a flat jackpot handout.
Many people buy tickets based on the size of the top payout and ignore the odds. It’s a mistake to focus on only the top payout because there are other options for playing the lottery. The best way to play the lottery is to have a clear goal in mind and choose games with the highest odds to win that prize, says Jared James, former PriceWaterhouseCoopers CPA and mergers and acquisition specialist.
Another important factor to consider when choosing a lottery is how much taxes you might pay on your winnings. Some states have lower tax rates than others, and some even don’t charge any at all. In addition to the state tax, there are federal taxes and fees to consider as well. To help you find the best lottery for you, check out NerdWallet’s list of state and federal lottery taxes.
The bottom line is that the best lottery to play is the one you can afford to play consistently, without spending more than you can afford to lose. That doesn’t mean you shouldn’t play at all, though. Experts say that you can still enjoy the excitement of the lottery by purchasing a ticket when jackpots are at nosebleed levels. Just be mindful of how you spend your winnings and make sure to set a budget for yourself, NerdWallet recommends.
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