Topic: "Most lottery winners go broke after few years" - page 7. (Read 1747 times)

There are quite thrifty rich people, I think that everything depends on how they got this money, if wealth is achieved by their own efforts, then it will be valued more, if it is inherited, then the heirs spend it more generously. Money won in the lottery can be treated differently, this may concern the financial education of people, maybe they will immediately want to buy a good home and an expensive car, or maybe they will want to invest it, which they have long thought about but could not do because of small savings.

Totally agree on that. Great money is great power. "With great power comes great responsibility". People are irresponsible towards money. When people are poor or earn money hard, they count every penny, think about making a purchase. When they have great money, they are blind, and spend without thinking about tomorrow. Whenever they spend, they always consider that they still have a lot of money and each expense is nothing.

I can easily explain why this happens. And it is obvious that I believe that almost all lottery winners become unhappy people. The thing is that lotteries are not attended by people who invest money not in their knowledge and skills, but in chance. I mean lotteries, of course. And it turns out that the winners of these very lotteries have very bad money management. These people are simply not ready for such money.

If I were to win the lottery, my strategy would focus on long-term sustainability to avoid the common pitfall of going broke after a few years. First, I would claim the prize as a lump sum if that option is available. This provides immediate liquidity and avoids the risks associated with annuities, such as inflation or potential issues with the lottery company’s solvency. Taxes would be my first priority, ensuring full compliance to avoid legal problems.

After taxes, I'd keep the remaining funds within Mexico's financial system, where I live, and leverage proven fixed-term investment platforms that offer annual interest rates averaging ~14%. Diversifying across low-risk and medium-risk instruments would ensure stability while maximizing returns. A portion would be allocated to high-liquidity platforms as an emergency fund. I'd live off the interest while preserving and reinvesting part of the principal to capitalize on compound growth. (A little of spam here: USDT Investment Fund with BTC & USDT liquidity reserve. 10% Annually)

Using interest payments, I'd secure essential assets like a small but comfortable house and a reliable second-hand car, avoiding unnecessary luxury purchases. I'd continue working because staying productive is important for mental well-being and provides structure, additional income and a sense of purpose. Additionally, I'd dedicate time to hobbies and learning new skills while setting aside a small portion for charitable causes.

To protect the wealth, I'd invest in comprehensive insurance policies and maintain an emergency reserve covering at least 12 months of expenses. Legal planning would include setting up a will and trust to safeguard assets. Regular financial reviews and portfolio adjustments would ensure the strategy remains aligned with market conditions.

Finally, I'd set clear boundaries to avoid falling into the trap of unsustainable generosity or poor investments. Limiting the number of people who know about the win is critical to avoid pressure. This structured approach ensures me a financial security, a productive lifestyle, and avoids the fate of going broke, which unfortunately happens to many lottery winners.

Yeah so many things could be a reason why someone would get broke after having so much wining from any gambling, actually people tend to respond so many ways whenever they heard or see that someone who won a Lottery got broke because the first impression they would have is that the person is a careless spender without wanting to get a detailed information about such person before concluding, however let's just say for instance about the Ferdy you mentioned, don't be surprised that most people who doesn't no the story behind his death will be interpreting it in different ways without knowing that the man was using all his money to fight for his life, so in summary there are high cases and instances were majority of such broke results from careless spending but not entirely all.

Degree and knowledge are nothing when you dont know where to use that and dont practice it. I have both examples in my life, when my classmates and university friends, who have bad grades during study, barely got a diploma, and now 1) work on a shitty low payment work 2) work on a well paid job. Both were getting same knowledge from same teachers. Some are even lazy to self educate, but were on the right spot at right time, and got a well paid job. But, we were never in lottery winners skin. We dont know how we would behave. We can claim that we will spend smart, invest, keep having regular life. But when a person sees 7-10 digit number in his bank account, he forget everything what he has said and promised. And whenever person starts to spend a lot and pay no attention to price tags, its hard to get rid from such habit.

Self education plus having that dedication and seriousness on trying out to achieve something despite on having that lack of education. It all matters on hard work and dedication because success isnt something that you will really be able to attain or hit up when you arent doing something to achieve it. You've seen that other people who do have degree but ending up on unsuccessful due to some decisions that they had made into their lives. Somehow, getting a degree will really be having that advantage in considering about the knowledge you will really be able to obtain but just like on what
everyone is saying on here that degree isnt everything, it do also need up that hard work and wise decisions need to be made on.

Explanation to whole situation is simple, you know what is money management, but they (those who got broke after winning a lot) dont. I would not be 100% sure that you, me or anyone else would  invest or spend money wise. Because I think that we have never been really rich by winning a lottery. And state of mind of those who worked hard or smart, and got rich, is different who was granted a present from destiny in a form of a lottery win. But, I think those who got rich and easy main problem was that they dont follow their expenses and monitor bank account regularly.

Do you know why people without a standard education or without it at all become financially successful? It's quite simple. They are engaged in self-education. I can say for sure that today you can't do without it. If you want to become rich, then you need to do this first. In my country, there are few people who do not work in their specialty. This is because education is outdated and there is nowhere to apply this knowledge after graduating from an educational institution. I know several small entrepreneurs who only have 9 years of school education, but this does not prevent them from successfully doing their business.

This is simply an ingrained opinion based on what people have heard somewhere but have not had the opportunity to see with their own eyes whether it is really so.

Perhaps this is jealousy, but I am not sure about it, why be jealous of other people's successes, it makes no sense, it is better to try to achieve success on your own, and let the example of other people become a good example for those who also want to achieve something.

This opinion is still taken as faith, because people believe that those who win a lot of money do not know how to handle money and will immediately start spending it, but I think that this is not true, you can skillfully handle money even when you earn little, and then just do the same with a lot of money.

I also like to think the same about myself but sometimes I hesitate if the amount is huge. There are EuroMillions jackpots approaching 200 million euros (about 210 million dollars). If you win that, I'm not so sure because it would be such a radical change that it scares me a bit. I wouldn't change 1 or 2 million euros, but I don't know about that amount.

Although I'm glad to see that according to what the OP brings most of the time she doesn't go crazy and uses the money responsibly.

Of course, people are very envious, jealous of other players' big wins, and there is nothing surprising about that, really. Also, many players have often heard in the news how an ordinary worker from a small town became a millionaire because of a jackpot that fell on him, and after a couple of years there was nothing left. Many remember these headlines and read them with a grin. But no one writes much about those who actually invest this money and their life becomes much better, because they will not have the same views and interest from readers.

It's back to our characters.

I've been working for many years and have never spend money for unnecessary thing, but I use the money to invest in Bitcoin. I honestly can buy a house, a car and increase my lifestyle with the amount I've invested, but nope, I still live the same way I live like when I'm broke.

What if I won a lottery? I will just invest it to Bitcoin, like nothing happened, then back to my daily routine.

You will remain who you used to be before you make life changing money, those who believe that money change people are blind, they don't have eye to see through others, people don't change after they make money, whatever they turned out to be was already a part of them before they get rich.

It is very easy to believe that giving out money to friends and family will make them love you even more, that's a big lie, they will still do whatever they like on your case because this is who they really are.

Don't use money to buy people, if they are not there when you are nothing they won't be there after buying them with money, all they will offer you is fake love. There are many stories about lottery winners already, I expect new lottery winners to learn from those people.

People do really love to degrade people who didnt been able to finish up college or able to get some degree on which they do really thought that they wont be able to succeed in life which is really that very wrong.
We've seen that those who finish up their studies not all had become successful but rather ending up on being jobless or able to get some job on which it is really that too far on their course.This is why
its not really that good on making up some conclusions basing up into the things that pertains or define success. It will really be better that you should really be that minding on your own business and let others do their stuff and so as you. As for lottery winners who do end up on becoming broke after winning up a huge amount then it is really that truly talks about mismanagement.

There were several horror stories about lottery winners going broke. Most people remember those stories rather than trying to remember a story of a lottery winner, who had a happy and meaningful life. The mainstream media knows that "bad news sells the newspaper" and "drama sells", so that's why the news about lottery winners going broke receive way more attention from the journalists and are shared way more often.
Most lottery winners, that are living a good life usually want to keep their privacy, rather than sharing stories about their fortune left and right.

In general, I agree with these two theses in the starting post. Indeed, out of a sense of jealousy or envy, people can calm themselves by coming up with such false patterns. And of course, the second thesis is simply unconditional. It is typical for a person to exaggerate his merits, whereas he was just lucky. In the starting post, this is called "correct circumstances" - a very appropriate definition. By the way, there is a good book by Nassim Taleb "Fooled by Randomness" about all this.

it's because people are of the opinion that the easier you get your money the easier you spends it and from evidence and past record, most lottery winners have been known for their reckless spending that sees them becoming broke few years after winning the lottery. this concept is just an assumption that is framed from few persons but when you look at it, its never true for a larger sample even though for some lottery players, they are used to misusing there money at clubs for the wrong reason.

if you are someone that has good financial management skill and is ready to plan out what the money you got from lottery will be going into, there is no where is is out rightly defined that regardless of your good policies you have implemented that it will end in disaster. its somehow related to a myth that some people holds most especially the religious ones that assume that the proceeds of gambling is a cursed money that cant stand the test of time. i don't believe that it is true because you didn't steal the money but got lucky is your gamble. like, you lost at several instances and now you have managed to win, should be now tagged as a cursed money when it was never stolen or gotten in a wrong manner? if you win a $20K worth of lottery and invest it in an asset or a business that has the tendency of yielding good returns in some years time, i doubt that just because the capital you used in making such investment is from lottery that you will unavoidably encounter a loss.

Every time there is bad news about gambling including people who have won the lottery but their lives have become chaotic then it is considered as a whole, the same as when someone is addicted they tend to think it is because of gambling when in fact it could be because of something else.
I read some news about people who won the lottery with fantastic amounts and their lives became poor again because they could not manage their finances and there were also those whose lives became dangerous because their closest people were after their money to control, but of course the news is only a little compared to those who managed to get better unfortunately good news does not attract more readers or attention than bad news, so people believe that winning the lottery will make life miserable.

Aren't that kind of articles meant to create the sensation that, if you get rich, you necessarily need the advice of banks, financial advisors, etc. because otherwise you'll lose it all and become miserable?

I'm sure that in many cases this is true: people get mad and start spending like there was no tomorrow without any planning and zero control over impulses. But I don't think this is the rule: most people will buy properties and rent them, or live a dear life themselves and the next generation with the money earned without wasting it.