You're lucky if you haven't won the lotto?
Unlucky in riches
If you have not won the lotto, you may want to consider yourself lucky. Well, at least according to this article. It describes the plight of many multi-million-dollar lottery winners who lost it all. I can't understand these people. I know there will be lots of temptations and lots of hard-luck stories. But you are adults, not children.
One person mentioned in the article "won the New Jersey lottery not just once but twice (1985, 1986) to the tune of $5.4 million. Today the money is all gone and this person lives in a trailer."
One problem is that a million isn't as much as you might think. If you're thinking about buying a mansion after you win the lottery, you need to do the math first. The first problem is the lottery itself. It says you won X amount. But that's not the amount that can be paid by a check today. It's the total amount paid over 20 or more years. If you choose the lump sum payout, it'll be around half of what's advertised. Then there are the taxes which could cut the amount by another half.
After the reduced lump-sum amount and the taxes, then you need to look at all the other expenses that it takes when you buy a large house. This includes insurance, property taxes, and furniture. If you're a millionaire, you can't settle for average furniture. You want the high end stuff. Nicely furnishing each room could run you tens of thousands of dollars.
The same issue goes with cars, vacations, jewelry, etc. Going with the higher end stuff will cost you much more than you originally expected.
And this doesn't even consider the family, friends, and strangers who will keep asking for financial help or for investment in their business ideas.
So I can see how these lottery winners squandered their money. But I don't have any sympathy for them. They should have created a budget and stuck to it. There are some things in life that I can understand about fearing like cancer and crime. Winning the lottery is not one of them.
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