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How Stupid Can You Be With Money? Ask Lottery Winners.

MULTIZ321

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How Stupid Can You Be With Money? Ask Lottery Winners. - by Neale Godfrey/ Personal Finance/ Forbes.com

"This article is a word to the wise… or not so wise. You’ve likely overheard the following sentiment after the evening’s lotto drawing, “If I only had money, my problems would be solved.” I’m not talking about the very poor, obviously. Nonetheless, money (whether in the form of lotto winnings or not) can sometimes create more problems, as noted by a recent article posted on TheRichest.com. ”It’s not uncommon for lottery winners to end up with even less than they had before their windfall and sometimes they even end up with nothing at all.”..."


Richard
 

csxjohn

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I had to read the article to see if a fellow I knew well was mentioned. He was not.

Steve, an electrician who did some work for me and was a friend of one of my best friends won $16,000,000 in the Ohio Lottery. He chose the lump sum and was awarded 8.6M. After taxes he got a check for 6.8M.

The Cleveland Plain Dealer ran an article on him entitled something like Rags to Riches to Rags. Before he got his check he went out and bought new cars on credit for himself, his wife and both his kids. This was a sign that he had no clue how to handle his winnings.

Before the died he was divorced, broke, and owed his unemployed brother money.

It's too bad because he was a nice enough guy before he hit the jack pot but it truly changed him and not for the better.

If you play, get professional help if you win big!
 

pedro47

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That article should be 101 lesson#1 for ever lottery winner.
 

Phill12

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One of the main problems as stated by many over the years has been the people who can't afford to play just hoping to become rich!:ponder:
Many of these people just to keep it simple are stupid people who think when they win they become smart people and blow the money in a few years. Then they are back to being stupid and broke again. The lottery shows on cable stations show this many times when they go back to show the past winner stories.:crash:
Most people with half a brain could be set for life and their families if they only won five million dollars knowing how to invest and save money.:shrug:

It is very sad to hear of the lucky people winning more than one hundred million dollars then going broke in a few years. Any family that win would go buy new cars and maybe nice homes for their family and take a nice vacation and help by giving family some money.Most of this can be done with first check if they are smart enough to get paid out over 25-30 years..Winners that can not handle money should always go this direction and should hire someone to help them understand how to work the money for a life time.

PHILL12 :rolleyes:
 
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Passepartout

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One of the main problems as stated by many over the years has been the people who can't afford to play just hoping to become rich!:ponder:
Many of these people just to keep it simple are stupid people who think when they win they become smart people and blow the money in a few years. Then they are back to being stupid and broke again. The lottery shows on cable stations show this many times when they go back to show the past winner stories.:crash:

I am certainly not in a position to call lotto winners 'stupid' across the board. Seems an awfully broad brush to paint people. But (imo) a lot of these folks lack money management skills. They also seem to have 'needy' families and lack of ability to say "NO!" when a family member in need comes asking for help. Like the huge preponderance of otherwise very nice people who go bankrupt, the majority are brought down by medical bills. Certainly, lotto winners seem to universally rush out and make long-wished-for luxury purchases, but long-term, most simply give it away- or are led to unwise, risky 'investments'.

States and other lottery payers would do winners a favor by requiring them to take a money management one-on-one course if they opt for the reduced lump sum payout. Those that take it as an annuity over 20 years at least can't blow through it quite so fast.

Not that it matters. I look at lotteries as a tax on those who can't do math, hence I don't play, hence I'm never going to win. Or lose- on a lottery.

Jim
 

am1

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I agree. People who buy lottery tickets have poor money management skills. Buying lottery tickets is the first example of that. I would be in favour of 100 people winning a million dollars instead of 1 winning 100 million. But I guess that does not sell tickets.

I never play either and my chances of winning compared to someone who does play are about the same.

I am certainly not in a position to call lotto winners 'stupid' across the board. Seems an awfully broad brush to paint people. But (imo) a lot of these folks lack money management skills. They also seem to have 'needy' families and lack of ability to say "NO!" when a family member in need comes asking for help. Like the huge preponderance of otherwise very nice people who go bankrupt, the majority are brought down by medical bills. Certainly, lotto winners seem to universally rush out and make long-wished-for luxury purchases, but long-term, most simply give it away- or are led to unwise, risky 'investments'.

States and other lottery payers would do winners a favor by requiring them to take a money management one-on-one course if they opt for the reduced lump sum payout. Those that take it as an annuity over 20 years at least can't blow through it quite so fast.


Not that it matters. I look at lotteries as a tax on those who can't do math, hence I don't play, hence I'm never going to win. Or lose- on a lottery.

Jim
 

LannyPC

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They also seem to have 'needy' families...

I like this quotation from the article that says, “If you want to know how extended your family is, just go out and win the lottery. Your phone will be ringing nonstop..."

Or you could say “If you want to know how your extended family is, just go out and win the lottery...." (I underlined the two words that were reversed). And, BTW, your extended family will somehow be poor, out of work, ready to be tossed out on the street, gravely ill needing thousands of dollars for a life-saving treatment, on the verge of bankruptcy, etc. But it's amazing how the lottery winner knew nothing of these before he won the lottery. :ponder:
 

moonstone

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DH worked for the OLG (Ontario Lottery Corp) for 33 yrs before retirement & heard many stories of what happened to winners after they claimed their prize. In Canada winnings are not taxed ( but you will be taxed on the interest the winnings generate in your bank account or investments) so you get every penny. The OLG offers professional counselling (financial & other) to all major jackpot winners and most people take advantage of it. Winners must agree to have their name and town published and most people change their telephone numbers before or immediately after claiming their prize. Many change their addresses too!

There was a story in the media a year or so (or more?) ago about a guy who waited until 2 days before the ticket expired to collect his many millions because he was in the midst of a divorce when he won & didn't want the ex-wife getting any of the winnings. She did find out & I believe took him to court to get her share.

We had a farmer near us win quite a few million many years ago. He & his wife lived in his family farmhouse which was very old & run down. After he collected his winnings he went out and bought a brand new tractor & bailer, a used pick-up truck and took they a 1 week vacation to Florida! He said all the rest of the money went in the bank! We have driven by the farm many times over the years & nothing has changed.

Some people can manage their money, and some can't!

~Diane
 

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Lotto Winner

When I was a store Mgr. I had an employee who always played both the lottery and lotto and always claimed he'd win some day and give a third to his church. Years later I saw his picture on the news and then on the front page of our local paper. I can't remember if it was something like 46 or 64 million he won and the news said he gave a third to his church. A man of his word. Every so often I still see him and his wife in the paper hosting different fund raisers and charity events.
 

MuranoJo

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I agree. People who buy lottery tickets have poor money management skills. Buying lottery tickets is the first example of that. I would be in favour of 100 people winning a million dollars instead of 1 winning 100 million. But I guess that does not sell tickets.

I never play either and my chances of winning compared to someone who does play are about the same.

Don't agree. I always buy lottery tickets for fun, but I have very good money management skills and have been able to take an early, comfortable retirement. Plus, I'm probably at break-even with some nicer scratch ticket winnings.

DH doesn't partake, so I always tell him he'll have to come groveling when I win. ;) I am amazed, though, at those who win so much and don't manage it well. If you watch some of the documentaries about past winners, some have managed quite well.
 

Pat H

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In 1993 my dad, his 2 brothers, a sister & sister-in-law, won $9.8 million in the NJ Lottery. At thst time you could only take an annuity. They got $100,000/yr before taxes. Don't try to do the math because there's another story behind that. Everyone was in their 70's except for the sister who was younger.

1 uncle bought a car, the other didn't need it so he gave most of it to his kids, the sister spent all of hers right away. My dad put new windows on the house. The second year he put in new sidewalks and they took a cruise to which they treated their best friend. The third year he finally bought a new car. We kids got nice Christmas checks

My aunt continued to spend her check as soon as she got it every year. She had no savings, no pension and her only other income was Social Security. When the lottery ended in 2012, she had already lost 1 house becuase she had bought a second one and then couldn't sell the first. She ended up having to move in with her daughter & son-in-law. On top of that, she became POA for my one uncle who was on the "slow" side. She stole $300,000 of his money too. As executor of his will, I discovered it right away and managed to get most of it back.

That aunt is the only one still alive. My mom is still living off the savings from their share of the lottery. Like many have mentioned, if you never had money managing skills, winning the lottery doesn't change that.
 

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even more sickening, watch this ESPN 30 for 30 episode called "Broke"

shows the overwhelming majority of pro athletes who are flat broke just a short time after retirement (or otherwise leaving the game)

https://www.youtube.com/watch?v=va2qj4Zv4QM

very sobering when someone who clearly has no common sense when it comes to money, is handed large sums of it.
 

FLDVCFamily

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even more sickening, watch this ESPN 30 for 30 episode called "Broke"

shows the overwhelming majority of pro athletes who are flat broke just a short time after retirement (or otherwise leaving the game)

https://www.youtube.com/watch?v=va2qj4Zv4QM

very sobering when someone who clearly has no common sense when it comes to money, is handed large sums of it.

We watched that, or something very similar, on Netflix. It was so depressing! Somehow most of them had no concept of money whatsoever...they just felt rich, spent like crazy, and then ended up broker than broke:(
 

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Money doesn't fix stupid. Never has, never will.
 

TUGBrian

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I found it fascinating that the pro athletes just didnt get the concept that they didnt get a paycheck all year, but only game checks during the season.

it seemed (via the video) that so many players literally blew through all of their money shortly after the season ended, and had zero to their name until the first game of the next season.
 

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...People who buy lottery tickets have poor money management skills. Buying lottery tickets is the first example of that. ....
Very general tarnish here. I play sometimes as a lark. So what?

One lottery ticket in most cases costs less than a soft drink. Shall we call all soft drinkers poor money managers?
 

csxjohn

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Very general tarnish here. I play sometimes as a lark. So what?

One lottery ticket in most cases costs less than a soft drink. Shall we call all soft drinkers poor money managers?

I play occasionally when the jackpots get big, a dollar or two. Why? Because after the fellow that I knew won, I know there is always a chance that I'll win. I don't play scratch offs or games that pay a few thousand dollars. To me it's a waste of time and money because it won't change my life. A multi million jackpot will.

Oops, got to get out and get a ticket for tonight.
 

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My husband, a pro gambler, would say that playing the lottery (or anything similar) is the first sign that someone has poor money management skills. But I buy a lottery ticket any time I'm in a state that sells them. I also play megabucks every now and then. My money management skills are acceptable. They could be better, I'll admit.

Windfall money is a challenge for anyone to manage, even people with good money management skills. It's very easy to fall into the trap of overestimating how far the money will go and how long it will last.
 

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I find lottery tickets make great presents for events like christmas parties, etc...for some friends ill buy them the same amount of tickets for their age on their birthdays.

super cheap, and everyone enjoys scratching off to win something (or checking to see if they won that nights draw).

certainly a cheap gift thatll never ever be forgotten should that person win!
 
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