Cold Water on Lotto Fever

The lotto's a game of slim chances,
Though the jackpot immense at first glance is;
Of the fortunate few
Whose numbers come through,
Most end up in bankrupt finances.

With a record-setting $540 million jackpot up for grabs on Friday night, the Mega Millions game has given the country lotto fever. However, the cold fact is that nine out of ten lotto winners squander their prize in five years or less. CBS Moneywatch editor Jill Schlesinger has advice for those who feel lucky tonight: if, against impossible odds, you actually win, keep the news to yourself while you carefully hire an accountant, lawyer and financial advisor to help you work out a sustainable plan for your incredible windfall. Remember, the prize is always less than it sounds; the after-tax, lump-sum value will likely work out to half of the stated jackpot amount. Moreover, if you want it to last, you've got to leave most of it invested and live on the earnings. The bottom line is, if you can live on the $10 million or so annual earnings that the $540 million nest egg might throw off after taxes, then you, your new-found friends and your long-lost cousins will live happily ever after.
Hat tip to Tess Vigeland of Marketplace Money.