5 Ways Winning a Grant Award is Better Than Winning the Lottery
When people are asked to make a wish for a fantasy to become reality most people always answer that they want to win the lottery. They know that winning the lottery will give them instant access to hundreds, thousands, millions, or even a billion. In 2019 there was a lottery winner in South Carolina that won $1.5 billion. Now who can possibly resist the allure of winning a lottery just because you bought 6 numbers on a piece of paper for two dollars ($2.00)? The interesting reality is there is something infinitely better than winning the lottery. The thing that is better than winning the lottery is to win a grant award. A lot of people have never considered this alternative. That is why I have written this article to highlight the top reasons why winning a grant award is absolutely better than winning the lottery.
- No Taxes
There are absolutely no taxes to be paid on your grant winnings. Yes, this is true. If you win a $1 million grant award; every single penny of the winnings belongs to the winner. Let me say it this way. Every single penny is for the winner to spend. As we all know this is not the case for the lottery winner. Let us pretend for a second that you were lucky enough to win the lottery. Let us assume that you live in New York City. Let us also say that your winnings were $10 million. That seems like a lot of money doesn’t it? And you would be correct. Ten million ($10 million) by any standard is a lot of money. If it was grant winnings, the winner would get the entire $10 million. However, this is not the case for a lottery winner. A lottery winner must factor in taxes into their winnings. If you remember for our make-believe scenario here, you live in New York City. Do you know that this winning would put you in a 39.5% Federal tax bracket? Do you know that this winning would also put you in a 8.82% New York state tax bracket as well, plus another 3.876% in local taxes? Consider the implications for your lottery winnings in the table below. It looks painful doesn’t it?
|Less Federal Taxes||$3,950,000|
|Less State Taxes||$1,269,600|
|Total Amount Taken from You in Taxes||$5,219,600|
|Your Actual Lottery Winnings||$4,780,400|
- No Payment Plan
Yes, yes, I know what you are thinking now; “I wouldn’t refuse $4.78 million if someone offered it to me” But, remember, it wasn’t offered to you. You actually won it outright. And you may think ok, $4.78 million is still a nice amount. However, the reality is you don’t even get your $4.78 million all at once and if you actually do want the entire $4.78 million then you must now go on a payment plan over a 30-year period. That means you would only get just over a dismal $8,000 every month in the first year, and by year 30 this will have increased to just over $34,000 a month. However, if you wanted all the remaining money upfront you will only get a depleted lump sum of $3,845,000. On the other hand, a grant award means you get all the money and there is no payment plan after taxes. Most grant funding agencies pay out the entire grant award to the winner or winners. There are a few grants that may have a re-imbursement payment structure or payment on a quarterly or semi-quarterly payment structure. However, if you don’t want that payment structure you do not have to apply for those types of grants. You can decide to apply for grants that will give you the grant award in one lump sum. Therefore, you have the power to decide what types of payment structure you want to engage to receive your grant award winnings.
- No Penalty for Taking All the Money at Once
There is a penalty when you collect your after-tax lottery winning. A winner will lose a substantial portion of the after-tax winnings if they want the direct control of their winnings in its entirety. A grant award is totally different. There is no penalty for taking possession of the entire grant award in one amount.
- Once a Winner, Always a Winner
For lottery winners if you want to win the grant again, you must buy a new ticket. However, some grant awards automatically get renewed every year. Yes, you read this correctly. There are grant awards out there that will give the grant winner automatic renewed funding just because the winner wins the grant award once. This means the winner wins the grant first and just because they won the grant that first time, the winner automatically gets this grant again and again every year. This is an amazing feature of a lot of grant awards. These automatic renewed grant winnings take the pressure off the winner to try and win the grant again.
- Better Odds/Better Chance to Win
According to CNBC, the chances of winning a mega millions lottery jackpot is one in over 300 million. Statisticians report that it is more likely for someone to get struck by lightning, die in a rare plane crash, or survive the climb to the peak/summit of Mount Everest than to win the lottery. Yet even I have bought a few lottery tickets here and there for fun and giggles and I’m a grant writer promoting the benefits of applying for grants. I didn’t say you shouldn’t buy lottery tickets. I am saying you should definitely apply for grants too. You need to double up on your chances for success. Do you want to be a winner or not?