In the US story after story about lottery winners hitting the jackpot and living it up only to end up broke and even worse, involved in crime and at worst dead are numerous.
For example William "Bud" Post won $16.2 million in the Pennsylvania lottery in 1988 but now lives on his Social Security. After a former girlfriend successfully sued him for a share of his winnings and a brother was arrested for hiring a hit man to kill him, and other siblings pestered him until he agreed to invest in a car business and a restaurant Post had lost most of his money. He even spent time in jail for firing a gun over the head of a bill collector. Within a year, he was US$1 million in debt.
"I'm tired, I'm over 65 years old, and I just had a serious operation for a heart aneurysm. Lotteries don't mean (anything) to me," says Post.
Another example is Missourian Janite Lee who won $18 million in 1993. Lee was generous to a variety of causes, giving to politics, education and the community. But according to published reports, eight years after winning, Lee had filed for bankruptcy with only $700 left in two bank accounts and no cash on hand.
These stories are more common than you would think. Why does this happen to these winners? A combination of factors contributes to the problem. Just ask yourself: If I won, what would I do? Most people answer: I’d buy a new house, a car, take a trip around the world…etc..etc. The last thing on people’s minds is financial planning!
We have a saying in America- “You can take the girl out of the trailer park, but you can’t take the trailer park out of the girl.” This means that you can transform someone’s social status with money, but you can’t change basically who they are. Having a lot of money doesn’t make you a smart financial planner; in fact with lottery winners, it tends to make them worse planners than they already were. Many lottery winners don’t have the ability to handle the change from a ‘normal’ existence to a ‘super
rich’ one.Want to become a millionaire?
A Gallup poll showed that 60% of those surveyed worried about their financial future. Use these tips to help you stop worrying!
1. Get Paid What You're Worth and Spend Less Than You Earn
2. Stick to a budget
3. Pay off credit card debt every month
4. Contribute to a retirement plan
5. Have a savings plan
6. Invest in what you know
7. Keep good records
8. Diversify your investments
9. Monitor your investments
10. Plan where you want to be financially by retirement age
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