Record Powerball jackpot gets bigger
DES MOINES, Iowa - The record Powerball jackpot just got bigger, climbing to $800 million as sales soared in the days leading up to the drawing.
Gary Grief, executive director of the Texas Lottery, says officials with the Multi-State Lottery Association on Friday raised the estimated jackpot for Saturday night's drawing from $700 million because of strong sales.
Grief says Powerball sales on Thursday were double the previous record for that day and that it's possible the estimated jackpot could rise again before the drawing.
A winner would have the option of being paid $800 million through annual payments over 29 years or opting for $496 million in cash.
Powerball is played in 44 states as well as the District of Columbia, U.S. Virgin Islands and Puerto Rico.
The prospect of becoming an overnight millionaire may not always lead to happiness, reports CBS News correspondent DeMarco Morgan. And the chances of striking it rich are slimmer than ever.
"The historical assumption is if you win the lottery, you're set. Unfortunately, the overwhelmingly majority of lottery winners don't have that story," said Andrew Stoltmann, an attorney who has represented six people who saw their lottery winnings disappear.
"Once this person wins this lottery, they become a global target. There are literally people across the world who put these people on a list to harass and harangue and try to sell bad investments and also just try to take their money," Stoltmann said.
Last year, a study found that 44 percent of lottery winners spend their winnings within five years.
On the bright side, CBS News' Moneywatch channel reports some of the things you could consider buying if lightning strikes.
A lump sum payment would probably be about $496 million. Then you'd need to account for the 39.6 percent federal tax hit, bringing your after-tax take to about $300 million. (Don't forget any state and local taxes.)
Looking at it objectively, the Powerball winner will be as rich as some Hollywood celebrities such as actor/producer Tom Hanks, whose fortune is estimated at $390 million, though they won't be in the same league as Microsoft (MSFT) founder Bill Gates, the richest person in the world with a nest egg estimated by Bloomberg at $81.7 billion.
With a $5 million-a-year housing budget, the Powerball winner could cover the theoretical mortgage on the most expensive apartment recently sold in New York, an 11,000-square foot penthouse duplex on the 89th and 90th floors of a midtown condominium tower that fetched $100.5 million in early 2015. Such sky-high property transactions don't typically involve mortgages, of course, but here's the rough math just for giggles: After a 20% down payment ($20 million), the monthly payment to your lender for an $80 million mortgage would be around $416,600, or $5 million a year.
Rich people can indulge their whims both large and small. The winner would also easily afford, for instance, a vacation getaway like a private island in Panama being offered for $380,000. That excludes taxes.
A Powerball-winning sports fans can't afford to spend the billions needed to afford a professional team. A minor-league or semi-pro team, though, might be in their budget. A Single A baseball team in the Midwest is being listed by the Sports Advisory Group for $14.5 million, though minority interests can be had for as little as $90,000. Wannabe musicians can spend six figures on a guitar owned by their favorite rock star. Celebrities will even come to a child's birthday party if the price is right.
Like other issues confronting wannabe multi-millionaires, choices like these are nice problems to have.