What Will You Do When You Win Mega Millions?

I was on the phone with my friend who is a financial advisor today and the conversation inevitably turned to the Mega Millions Lottery, which is up to a $1.6 billion jackpot (just in case you've been living under a rock for the past week). He confessed that he hadn't bought a ticket yet, and I confessed that I'd bought a few. In fact, last week, while I did not win the $900 million jackpot, I did walk away with $2 — and I promptly reinvested it in another ticket.

Since I was talking to a money guy, I asked him how I should take the money when (not if) I win the jackpot tonight.

As it turns out, taking a one-time cash payout is the best way to go. Yes, you walk away with less than 50% of the full jackpot after taxes, but if you invest most of the money and get a return of more than about 1.5%, you will ultimately do better than if you take the annuity option. With some sound financial advice, you can parlay that paltry $750 million into billions.

And when you do I'll be there to help you find a sweet place to live while you watch your fortune grow.

Incidentally, my friend told me he'd give me $1 million if he wins tonight — and I'm holding him to that.