. Uncoached - Why Winning the Lottery isn't Great |

Feb 04 2011

Five Reasons Why Most Lottery Winners End up Poor Again

Published by at 7:20 am under Editorial

For a lot of people, winning the lottery is the American dream.  It’s funny that the American Dream is to sit on your ass and collect checks isn’t it? But for many lottery winners, the reality is more like a nightmare.  See the quote below…

“Winning the lottery isn’t always what it’s cracked up to be,” says Evelyn Adams, who won the New Jersey lottery not just once, but twice (1985, 1986), to the tune of $5.4 million.   Today the money is all gone and Adams lives in a trailer.

Yup, a trailer.  To me I think these scenarios are completely absurd.  However, I am not these people who won.  Most people who win the lottery simply aren’t prepared for it.   I know I’d be but again, I’ll never win the lottery.

Here are five reason these people throw it all away…..

More Money More Problems

It may sound like a cliche but it’s completely true.  Most people who win the lottery never had much money to begin with.  And when they start spending it they don’t realize all the little things that arise with a higher cost of living.  People think they can just buy a new house, new car, etc etc and everything is fine.  Nope.  It’s not fine, not if you can’t manage your money.  Most lottery winners don’t take into account taxes, insurance, and about 6000 other things that will screw them.

The Same Habits Re-Emerge just on a larger scale

If you were horrible at managing your money before, chances are you’ll be even worse it at when you have more money.  If you were in crazy debt before because you loved to shop, chances are you’ll be in worse debt when your shopping habits get even worse.  See the pattern here?   Only after you learn to discipline yourself can you be prepared to win a lottery.  Lottery winnings don’t create discipline or solve problems, they only enhance them.

Zero Clue How to Invest or Save Money

No disrespect to the unfortunately poor folks in this country but most of them don’t really know how to invest.  And it’s not even that.  Most don’t know how to save money.  With a new lifestyle savings will be at around negative.  And in terms of investing, if they weren’t doing it before they may wind up hiring some moron to manage their money and lose it all.  If you’re going to use your money on anything, use it on education to learn how to manage it.

People in your life change

William “Bud” Post won $16.2 million in the Pennsylvania lottery in 1988 but now lives on his Social Security.  “I wish it never happened. It was totally a nightmare,” says Post.  A former girlfriend successfully sued him for a share of his winnings. It wasn’t his only lawsuit. A brother was arrested for hiring a hit man to kill him, hoping to inherit a share of the winnings. Other siblings pestered him until he agreed to invest in a car business and a restaurant.  And the list goes on.   You just never know what money will do to the people around you.

Obligation to Family, Friends

When people win the lottery they have this mentality that they can all of a sudden hook up their friends and family with gifts, payments on loans, you name it.  It’s like creating an entourage.  It’s a bad idea and can create undue stress.   Not to mention it doesn’t last forever.

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