Lottery winners bankrupt? Why?

Question

I've heard of a large portion of lottery winners go bankrupt within a couple of years. I had a co-worker that won the California Lottery on July of 1997. he quit and was never heard from again. I now found out that he played the horses, went to the card casinos blew through 4M (he took the lump sum) and was broke within 5 years working a minimum wage job. I found this out a few months ago. How the h**l can this happen?

If I'd win the lottery, I'd invest the money and would not buy stupid stuff. A house, h**l yeah! investing the money, h**l yeah too! I'd pay a company to invest the money to insure myself NOT to be like my former co-worker.

But seriously, why does this tend to happen?

Answer 1

because money is not everything  

Answer 2

I guess most lottery winners don't know what to do with the money they have won. Thinking that it won't hurt even if they would use a little of their winnings in the Casino, no matter what game they played. But later on, they don't realized  that they have use all the money. Not thinking on even investing in a business.

Answer 3

Poor people don't know how to take care of money and finances.  

Answer 4

people are dumb - especially with money. I've already planned what I'll do with my winnings. Buy a new house, start a business and invest a TON

Answer 5

stupidness takes over.. they don't think correctly when they see that much money in there hands... you can say what you want but lot of ppl are not mentally ready for a big lottery winning. so most blow it in a few years even month and think wtf did i do .. if they never had a plain for a large sum of money that is what happens they bankrupt.. ppl that play the lottery should realize they need some sort of financial assistance ..but they don't understand that part when they got all that money in there hands... i dont play the lottery much .. but when i do i make sure i have my list of things i need to do with the money before i even would get the check if i would  even win ..  

Answer 6

Most lottery players are poor to middle class working stiffs.  They work for a living and have never been rich.  When they hit the big one, they don't know how to manage the money.  They spend recklessly, doing things they have never been able to do before.  Next thing you know, the money is gone and they are in worse shape than they started in.

I'm not rich by any means, but have been told it isn't easy to stay rich.It takes lots of discipline and planning.  

  

Answer 7

Generally the only people who play the lottery are those who don't have much experience with money.  After all if they were rich, why would they play?

So these people play, get amazingly lucky and win what sounds like an amazing sum of money; more than they would typically earn in a life time.

So they go crazy.  Fancy cars.  Fancy homes.  Stuff.  America is probably one of the best places in the world to waste money.  You can easily find multi-million dollar homes.  You can purchase hundreds of thousand of dollars worth of stuff without even thinking.

On vacation, you can go to Vegas, for example, and spend over $20,000 PER NIGHT on a suite if you want to.

The list of things to waste your money on is endless.  And if you are bad at money management the money can flow through your fingers like nothing.  And before you know it, nothing is all you have.  As the expression goes, 'A fool and his money are soon parted.'

Unless you win an insane amount of money like $100m+ you'd be surprised how easy it is to get rid of it.

So it doesn't surprise me at all that some people end up with nothing again.

Answer 8

These quick millionaires become broke because they weren't PREPARED to be rich. They got a large amount, and went out buying everything they ever wanted the next day. People who PLAN to become millionaires (such as myself) know that there is a very detailed way to plan out your money and invest it in the right things so it can GROW into more, and maintain financial security.

Answer 9

Money makes you more of what you already are.

If you are generous, it makes you more generous.

If you are a smarty pants, it makes you more of a smarty pants.

If a person isn't good with their money and they earn $35,000 per year, then when they win millions, they will be that much incompetent with their millions.

If a person doesn't have healthy boundary setting skills, then there will be trouble when all the relatives and friends come out of the woodwork asking for $50,000 each. "Hey man, you're rich and my daughter needs braces for $5,000 and you know what I earn"................"Son, I've been your Dad your whole life and I really want a new home for $400,000.00"

Answer 10

In order to keep that great fortune you would first have to not tell anybody. That's one of the biggest mistakes people make. Don't tell anybody, maybe except very close family members or good friends that would keep the secret.

The second mistake would be not meeting with a financial advisor to figure out exactly what you want to accomplish with the money. The third mistake: if you know you are not good with money then why in the h**l would you allow yourself to have complete access to that type of cash at any given time. Have some self control of God's sakes. Get some CD's, some stocks, something....

I don't feel sorry for those people and I get a little ticked when I hear those types of stories. There are people like you and me that have self control and goals. I don't think it's fair that idiots keep winning the lottery, lol. There should be some type of screening process so that the only people that can play have to have common sense. And It's not like they don't have the money to hire an accountant. If they blow through that money in a matter of 4 or 5 years, they have a serious problem and it's their own fault. It's called common sense and some people just don't have it.