The Powerball Winner Pedro Quezada just landed a $330+ million windfall. Can he handle it?
Pedro Quezada, owner of a bodega in Northern New Jersey will have to start worrying about number with many more zeroes at the end. The small-business owner won last night’s Powerball lottery worth an estimated $338 million which represents approximately $150 million in lump-sum after-tax cash. That is an almost unfathomable amount of money and more so for a bodega owner.
In my experience, most bodega owners have limited formal education and use a cash-based accounting system that rarely keeps track of costs by category or type; they simply collect cash from customers, pay vendors in cash and wait until the end of the week to make to take their profits. Quezada is about to be transported a million miles away from that financial system into a world of estate planning trusts, wealth management, shared family offices, accredited investor status, strategic tax planning and more. I’m worried he won’t be able to handle it. Landing a windfall profit of this magnitude doesn’t have to come from Powerball; it can come from selling a company or through an IPO or from a revolutionary patent. If it does happen to you, here’s my advice:
1. Don’t change your spending level for at least 3 months. It’s important to let the initial shock and euphoria wear off. If suddenly you can afford anything you want, you’re likely to spend all your money on everything you want.
