As the Powerball jackpot soars to a staggering $1.5 billion this weekend, millions of Americans are once again dreaming of the ultimate payday. But while the fantasy of overnight billions is intoxicating, the reality of managing such immense fortune is a high-stakes psychological test that few are prepared for.
The gold standard for navigating this windfall remains Edwin Castro, the California native who won the world-record $2.04 billion jackpot in November 2022. Castro’s post-win life—ranging from high-end real estate investments to recent efforts rebuilding homes destroyed by Los Angeles wildfires—serves as a case study in “sudden wealth.” However, for every success story, there are countless tales of bankruptcy and broken relationships.
The “Sudden Wealth” Crisis Robert Pagliarini, a wealth advisor and author of The Sudden Wealth Solution, warns that hitting the jackpot triggers a unique crisis. Unlike entrepreneurs who build fortune over decades with a team of experts, lottery winners are thrust into the deep end instantly.
“It’s ridiculous levels of wealth,” Pagliarini told The Atlantic, noting that his primary concern isn’t the money itself, but the “psychological implications” that come with it. He describes a common emotional trajectory for winners: “The first is this sense of joy and excitement. But that is quickly followed by this sense of, ‘Oh my God, I don’t know what I’m doing.'”
According to Pagliarini, the challenge is “99% psychological and 1% financial.”
Lump Sum vs. Annuity: The Expert Verdict The most critical decision a winner faces is the payout method. While most winners instinctively grab the lump sum cash option, Pagliarini has long advocated for the annuity—payments spread out over 30 years.
“What the annuity gets you that the lump sum does not is the ability to make mistakes and to recover from them,” he explains. If a winner blows their budget in year one, the annuity guarantees a fresh influx of cash the following year, providing a safety net that a one-time payout simply cannot offer.
The Lottery Curse Beyond the bank account, the “lottery curse” often strikes personal lives. Winners frequently find their relationships strained as friends and family change their behavior, driven by new expectations. To combat this, Pagliarini advises building a “financial fortress” immediately: hire a tax attorney and a legal advisor before claiming the prize.
His most simple yet vital piece of advice? “Sign the ticket. Take a photo with it. Take a video with it. Tell one trusted person. Don’t tell anyone else.”
