Did you hear? This past July, a citizen from Illinois won the Mega Millions Jackpot that was worth $1.337 billion ($780.5 million cash). As of this year, there are 5 Mega Millions winners, including this past July. While winning a massive amount of money sets most people’s hearts aflutter, the reality is that there are pitfalls to winning the lottery. Winning the lottery will likely change most people’s lives, but not all of these changes will be positive.
The Downside of Winning the Lottery
Stress, depression, estrangement, divorce, premature death, and bankruptcy are just a few potential outcomes of winning a substantial jackpot. Also, depending on where you live, your winnings will be taxed, sometimes by more than one level of government.
Your money may be spent (or lost) much faster than you ever expected. Worldwide, there are several cases where this has unfortunately happened – to the point that the winner lost all their money and more.
Here are a few examples where everything went wrong for these lottery winners.
Andrew (Jack) Whittaker Jr.
Andrew (Jack) Whittaker Jr. won the $314.9 million Powerball Jackpot in 2002, the largest lottery jackpot in the United States at that time. After taxes, he collected a lump sum of $113 million. Jack was already a millionaire with $17 million. But that didn’t stop him from wildly spending his money. Jack was known to carry cash and was robbed several times. He was reportedly sued for $1.5 million to cover checks he bounced to cover his gambling losses at a casino. His relatives battled drug addictions, and he tragically lost his daughter and granddaughter. By 2007, he claimed he was broke. Time Magazine described Jack as one of the lottery’s unluckiest winners. At the time of his daughter’s death, he told reporters, “I wish I’d torn that ticket up.”
Michael Carroll was a UK National Lottery winner that won £9.7 million lottery prize in 2002. The Daily Mail reported that he had spent his money on drugs, gambling, and thousands of prostitutes. At one point, he smoked £2,000 of crack cocaine daily. Mike stated, “the dealer who introduced me to crack has more of my lotto money than I do.” Once his money was all gone, he said it was “easier to live on £42 dole than a million.”
What happens when you win the lottery twice? Evelyn Basehore attests that you can still lose all your money. In 1985, she won the $3.9 million Pick Six Jackpot. Less than six months later, she won $1.4 million (coincidentally, another Pick Six Jackpot). Time Magazine reported that she beat odds of 1 in 15 trillion. Like other winners, she shared her money with friends and also gambled her money, heavily. By 2000, she was living in a trailer park in New Jersey. In her opinion, “Winning the lottery isn’t always what it’s cracked up to be. Everyone wanted my money. Everybody had their hand out.”
Three Things NOT To Do When You Win The Lottery
- Tell everyone. When you let out the word, you will have long-lost relatives and friends coming out of the woodwork begging you for money. It’s smarter to keep your mouth shut to preserve your relationship with your family members.
- Change your lifestyle completely. Many people tend to buy expensive things like houses, cars, boats, and more. 70% of lottery winners end up bankrupt according to the endowment financial education. The reason being is most of these people think that more money means more happiness.
- Make impulsive decisions. Whether giving your money away, spending it on luxury items, gambling, or making poor investment choices, this can lead to much regret. And the consequences are real. Your windfall can rapidly deplete before you know it.
Three Things TO DO When You Win The Lottery
Blaine Thiederman, a certified financial planner, suggests you do these three things:
- “Work with a certified life planner. By working with one, you can understand what would a happy life look like to you. With proper planning, you can live the happiest life.”
- “Get a team of experts to assist you in managing risks, taxes, investments, financial plans, and legal plans. When you have that much money, you need to be sure you’re prepared for war in a courtroom by creating a brilliant plan to protect your money.”
- “Live on a budget according to your financial planner. You might think that living on a budget after winning the lottery is nonsense. However, when you live on a budget, you’ll be able to make sure your future is affordable, and you don’t run out of money.”
Easy Come, Easy Go
The odds of winning the lottery are incredibly low, if not minuscule. Whether you are playing the Powerball, Mega Millions, the Lotto, or Dailies, you have to understand what comes after. If you win, it’s essential to make wise, well-thought-out decisions like using it to invest in living your dream life. If not, you may suffer the consequences of your poor choices. You do not want to be like the previous lottery winners who lost it all. Make wise choices, and your future will be set in stone!
She started her blog, The Money Dreamer, when she realized the 9-5 job was not the lifestyle she wanted anymore. After designing for a while, she wanted a more meaningful life, which was freedom, so she decided to venture out. She took action so that she can live her dream life and decided to help people to live theirs by helping them how to save, budget, and invest.