The recent billion dollar Powerball caused a frenzy in the country. For two weeks straight you couldn’t escape “Powerball” talk or news. Financial Expert Donnell Bobo of DB Financial says, “While the chance of hitting the lottery causes excitement and daydream fantasies of a changed, happier, stress- free life, the exact opposite happens to many winners.”
Some lottery winners’ stories have ended tragically. The pages of their life after becoming instant millionaires are filled with loss, suicide, murder, divorce and more. Bobo says this may cause people to think that the philosophy of “money is the root to all evil” is correct. Bobo refutes this and explains that the lust of money and lack of education, financial literacy and discipline are the contributing factors to why instant millionaires go broke. “Money without discipline is the root to evil and the idea that more money equals happiness is what ends up disappointing many people.”
Business Insider spoke to Robert Williams, a professor of health sciences and gambling studies at the University of Lethbridge in Alberta, who said, “Perhaps the biggest problem with modern lotteries is how they portray the effects of winning. They deceptively convey the notion that life will improve,” Williams said, when in fact, “we adapt to our material gains.”In other words, while you might be happy for the first few months after you hit the jackpot, eventually that elation will wear off and you’ll have new concerns, like the stock market.
Donnell Bobo’s Tip of what not to do after winning the lottery.
Spending Carelessly with no Financial Advisors
Many winners are people who were not financially well off before, therefore they don’t know how to manage having so much money so they just go crazy and spend carelessly. Some try to give it away to friends, family etc and some just blow it. They allow people to use them. They don’t have a financial adviser to help manage those finances.
For example a North Carolina poor single mom named Maria Holmes won a $188 million Powerball jackpot last year. She has spent a quarter of her earning bailing out her boyfriend Lamarr “Hot Sauce,” McDow out of jail for multiple drug and weapons violations. Holmes’ boyfriend has cost her millions already. Not smart.
Bad Investments with no plan for the future.
When you’re not used to having a lot, sometimes you spend a lot thinking the money will last forever. You have to really save and invest in things that appreciate not depreciate. I truly had a client that needed help after they won the lottery but they came to me in the last year of the 20 year payout. This was a mistake in itself because annuity payments are worth less than the actual win. By the last year they were going broke and didn’t want to let the high life go. Now that person is drinking their life away.
Non Stop Gambling, bad business and the high life
People who play the lottery a lot are already spending money gambling what they can be investing. Just because they win it doesn’t mean they stop gambling. Secondly you musttry to live below your means and continue working to bring in money. people who live a very high life are usually wealthy and have had old money and are making more money. If your lottery winnings are your only income the well will run dry.
According to My First Class Life ” When you gamble by buying a lottery ticket and end up winning $5 million, the first step is probably to stop gambling and start investing, right? Not if you’re Lou Eisenberg.
Instead, Lou decided to gamble away a good portion of his jackpot on the ponies down at the track and lost the rest of it on multiple divorces. Writing alimony checks sucks no matter how much money you have, and Lou’s checks are next to nothing these days. The only income Lou gets now is from social security.
Suzanne Mullins made some terrible financial decisions after winning more than $4 million in the Virginia lottery back in 2004. Instead of patiently waiting for her lump sum from the state, Suzanne decided to take out a big loan with high interest rates. Part of the condition of this loan was that Suzanne wouldn’t be able to receive her full winnings until the loan was completely paid off.
After Suzanne finally paid off the seemingly predatory loan, it made a nice dent into her earnings. When Suzanne’s son became ill, she didn’t have the insurance coverage necessary to treat him. By the time her son’s bill came in the mail, Suzanne owed the hospital more than $1 million. Take out the taxes, the loan payment and the medical bills, and Suzanne had next to nothing left”
Read more on My First Class Life.