Like most people, I’ve fantasized about winning millions of dollars in the lottery. Wouldn’t it be nice to have a mountain of money and coast through life, not having to worry about how to pay the bills, and being able to afford new cars, college educations for your kids, and lavish vacations all over the world?
This article from MSNBC’s Money Central reveals that winning the lottery doesn’t always match the fantasy. If fact, it can be worse than losing. The article reports on the sad fates of eight lottery winners who experienced bankruptcy, drug abuse, and sometimes even prison as a result of winning the lottery. Frequently what happens to lottery winners, say financial planners interviewed for the story, is that they are pestered by relatives and friends asking for money to pay off their own debts or to invest in dubious business propositions. One of the advisors interviewed for the story said, “Often they can keep the money and lose family and friends — or lose
the money and keep the family and friends — or even lose the money and
lose the family and friends.”
One typical winner-turned-loser is William “Bud” Post, who won $16.2 million in the Pennsylvania lottery in 1988. His ex-girlfriend sued him and got a share; his own brother tried to have him killed in the hope that he’d inherit the money; and his other relatives convinced him to invest in businesses that failed. After just one year, Post was a million dollars in debt and was being hounded by bill collectors. He was sent to jail for a year for firing his gun over the head of a debt collector.
Today, Post gets by on $450 a month in Social Security and food stamps.
If you are unlucky enough to win the lottery (and I have to admit, I would still take a $500,000 annuity from winning a $10 million lottery, despite the warnings in this article), experts say you should immediately place yourself in a mental “decision free zone” for an extended period so that you can adjust to the idea of having more money than you are experienced in handling.