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Most Lottery Winners Blow Prizes in a Few Years: Surprising?

We're constantly discussing preparation for the future around here — which doesn't mean we wouldn't know how to put a large amount of cash to use immediately — but I'd like to think most of us would use foresight and take steps to keep much of that money stored away in a safe place.

It seems that I've been giving people the benefit of the doubt, because I was surprised to learn that 70 percent of lottery winners and those who receive large amounts of cash from lawsuits and the like spend their stash within just a few years! Does this surprise you, too?


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Gabriela14815884 Gabriela14815884 8 years
Definitely not surprised. The more money you have the more you tend to spend, apparently its engraved in our DNA somewhere. I had inherited some money from my dad when I was 18 and I blew it... while some of it went to good costs I wasted most of it on frivolous things - I learned my lesson. I wish I could win the lotto now, man what a help that would be :-\
CoralAmber CoralAmber 8 years
First I would hire someone to help me invest and plan with the money, then I would pay off my school loans and finally get health insurance. I would buy a nice reliable car with good gas mileage (prob. a honda). Then I would set up a retirement account for me and college funds for my best friend's kids (in my name so they could still get scholarships and government funds). Then I would finally tell everyone I won. I would give each of my immediate family a one time monetary gift or fund something they need like medical bills or home repairs. I would plan a trip with my mom to go somewhere she always wanted. I would pay my boyfriend's student loans off, but not his credit card bills. I would save the rest of the money to live off of and to buy a house with when I'm ready.
snowbunny11 snowbunny11 8 years
Oh geeez....guess she wasn't planning on going to college! Although, one of my friends spent his inheritance/trust fund from his dad's death on an elite private college, while his sister got a full scholarship to a school that wasn't quite as good, and she blew her portion on expensive hand bags and vacations. I mean, I guess either way would work!
uptown_girl uptown_girl 8 years
I learned that, sadly, my 18 year old cousin has almost entirely blown through the $100,000+ settlement from a car accident. She apparently took a couple friends to the Bahamas. Yeah...
snowbunny11 snowbunny11 8 years
Lawchick has such a good point- most lotto winners win like $100k not $100mil. Most people must have either mortgages or school debt, and that would use up that money in a heart beat! $100mil though...gosh, I'd be to a financial planner in an instant! Sure, I might spend some of it on family and friends, but it would get invested pretty quickly. I am surprised others don't do the same thing. Too bad I never buy lotto tickets! :)
RockAndRepublic RockAndRepublic 8 years
I'm not surprised because these people aren't equipped to handle large amounts of money. What i see is the immediate, bills! After that is taken care of, buy the necessary but still maintain a job. I don't want $1 mil. But i could handle $100k, best part is id keep it to myself.
Liss1 Liss1 8 years
I would pay off my house, maybe add on to it. Buy my sisters each a house, give money to other family members, pay off car, credit cards and any other bills, invest some and go on a nice long vacation with the hubby!
RosaDilia RosaDilia 8 years
Skigurl, I always give 10% when I attend mass. I guess 10% is fair enough. I do want to keep enough to share with my family. :)
stephley stephley 8 years
Bella, I work around two tax lawyers so when I'm bored I play with this. Initially, I'd have the boys handle investing while I got used to the idea (but it would be socially responsible investing which they'd not like a whole lot - these guys are hardcore). I'd take like 200-grand mad money - travel with friends, buy furniture, clothes, rent to try out neighborhoods I might want to buy in.. I would quit this job and go back to school for my next career - I'm working on that idea anyway. Half would be completely set aside for my daughter, a portion would be set aside for charitable work (which could end up being the part I enjoy most) and a portion would be set aside for family members. Beyond that the money probably would sit as invested - once I spent a week in a spa and got a house with a garden, I can't think of a whole lot I'd want.
skigurl skigurl 8 years
RosaDilia - that's quite specific of you to donate 10% to your church i'd take care of my family 100%, all the people who loved me before i was rich!
shepptacular shepptacular 8 years
People have this ill conceived notion that this money will last forever and it's no shock whatsoever that this occurs. I would put the majority in a high return savings account like ING and invest the rest in a conservative mutual fund. Luckily I have no student loans to pay off so getting rid of debt wouldn't factor into how I spend that money.
looseseal looseseal 8 years
Guess it's called the idiot tax for a reason.
a-nonny-mouse a-nonny-mouse 8 years
"Does this surprise you, too?" Not at all, not even for passing moment. (I *am* kind of surprised that YOU were surprised, though.) I figure it's somewhat akin to a chronically starved person being presented with a buffet of food items. They experience an intense emotional impulse to consume as much as possible, glutting the aching void they've felt for so long. For people who had been struggling financially all their lives (suffering a burdensome emotional toll from always being relegated to the abominable low-class table on the edges of more enjoyable society), the opportunity to do as they please with little thought for consequence must bring about a drug-like euphoria. Once they feel the high, they often gorge themselves in the hope of maintaining the feeling. Plus, money never seems to last as long or stretch as far as anyone would like. Lottery winners often seem to have very little experience managing money effectively. More money brings more chances to lose it, and in more spectacular ways.
chocolatine chocolatine 8 years
bellaressa, I'd buy homes (cozy ones, but nothing over the top) for myself and my parents, and would buy annuities for myself, my parents and my little brother. The annuities would be for an amount that keeps us comfortable, but also nothing over the top. I think most of the money would be gone after this, but at least my family and I would have financial security for the rest of our lives. I'd also probably quit my job or at least go part time, and spend my time reading, learning new languages and getting a couple of PhDs.
RosaDilia RosaDilia 8 years
Funny that you ask bellaressa I was having a conversation with my parents about it because my dad plays the lotto every Friday. The most he's won was $4000 and that was about 10 years ago. I would give 10% of the winnings to my church, donate to my son's private school, buy a nice condo, I would definitely go back to school, have my parents retire ASAP and distribute the rest between myself and my siblings and my nieces and nephews. Also, I would work until my position is replaced. Cousins, aunts, uncles and other leeches coming out of the woodworks are not on my list.
bellaressa bellaressa 8 years
I'm curious ladies, what would you buy or do if you won the lottery. I mean the jackpots that are 10M +.
Martini-Rossi Martini-Rossi 8 years
Pretty sad. I know how it is to live paycheck to paycheck therefore i am a! lol If I should ever win the lottery ( I dont play) I would save/invest most of it and live very comfortably. I need to mades or anything like that...oh and i'll never work a day in my life.
SomethingWicked SomethingWicked 8 years
I new this...and it makes me sad that this happens
mondaymoos mondaymoos 8 years
I guess it would depend on the amount in regards to how fast I would blow through it. All I'd want to do is pay off my car, buy a nice small condo and go back to school. Luckily, I work for an accounting firm, so I would just have my boss figure out the best way to deal with the rest of it. :)
bellaressa bellaressa 8 years
I never knew the number was that high. Skigurl, you're right. I have family members that would do this, its always about what they can get now. I agree with stephley, if I won - I wouldn't tell anyone, I would go to work and just stay that way for at least a year. I could see the leeches coming out of the woodworks when they found out I won. That is way too much pressure. I never play the lottery - wish I did but I'll never be a winner.
stephley stephley 8 years
I read a book a couple of years ago "Sudden Money" that discusses how people should deal with windfalls so that it doesn't all go to impulse and taxes. I think the best advice was the hardest - do nothing radical at first and put it away someplace safe for a couple of months while you educate yourself and focus on figuring out what you really want to do.
lawchick lawchick 8 years
well, a lot of lottery "winners" aren't winning the grand prize. If I won $100,000 or something, I would blow through it in a week paying off school or house debt! If I won 100 million dollars, on the other hand, it would be a different story!
RosaDilia RosaDilia 8 years
Not surprising at all. Oprah had aired a show a couple of years ago on a group of people who had won the lottery and almost all of them were broke within three years. They had a guy who had won the NJ lottery and was almost broke in less than two years. He had quit his job, was married four times, had boats, houses, etc... He was close to retirement and was counting on his pension after his last lottery check was gone.
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