A massive lottery win can be a joyous and life changing experience, but great fortune seldom comes without burdens of its own. A number of lottery jackpot winners in recent memory have squandered their winnings, and are now no better off because they didn’t manage their money wisely. There have been a rare few winners who have increased their winnings because they sought advice on investing, and didn’t squander their winnings within a few years. It is clear from surveying those fortunate individuals who have instead prospered after winning jackpots that certain lessons must be applied to one’s own fortune, however small.
Keep Working
Lottery winners who treat their windfall as an opportunity to create even greater wealth often have great success in growing their fortunes. Consider the example of 2005 Powerball winner Brad Duke. He resolved that the $125 million he had won would be used as seed money for his first billion. He is thriving financially by not treating his winnings as an incomprehensible and limitless golden goose. Duke’s example is good for those of us who are trying to launch our business and make it big—we can’t stop after our first bout of success. If you keep working hard after making your first big batch of money, you company will continue to grow, or you will continue to get promoted, and you’ll end up with a lot more money than just what the first round of success can bring.
Ask The Experts
A common theme in the tales of woe often associated with past lottery winners is their ruination through lack of financial acumen. This dilemma can be solved by utilizing the services of professional financial planners who routinely handle vast sums. A good example is New Jersey’s Chris Manzi, who won a portion of a $14 million jackpot in 2012. He immediately sought advice from his financial planner, and this prudent act has allowed him to retain his entire prize to this day. Unfortunately, only a small portion of those who win the lottery seek financial advice on how to save, spend, and invest their winnings. Evelyn Adams is a perfect example of this. She was a two-time winner of New Jersey’s state lottery—she finds herself destitute now, and blames her misfortune on poor financial management. Hardly any of the winners have good money management skills, and that’s true of a large portion of people who find themselves with a lot of money. From Manzi’s example, we learn that getting a little expert help really goes a long way. If you find yourself with large sums of money and you’re not sure how best to handle it—turn to the professionals.
Plan for The Worst
Most lottery players have never thought about their estate, or considered what would happen to their assets after they shuffle off this mortal coil. A huge win in the lottery has the effect of forcing winners to consider how to keep their newly minted fortune in the family after their personal stewardship of it has been rudely interrupted. This sudden awareness of the need for estate planning caused 2013 Powerball winner Paul White to retain a dedicated tax attorney soon after receiving his vast winnings. Unlike many lottery winners, White was concerned about leaving something for his children and grandchildren—instead of spending every last penny before he dies. If you have been lucky enough to experience fortune in your life time, take a lesson from winner Paul White, and get everything in order in case anything should happen to you. That way, you know that those you leave behind will be taken care of.
Give Cautiously
The first impulse of most big jackpot winners is to shower friends and family with elaborate gifts or even cash. This is a noble sentiment, but caution must be employed to avoid overextending one’s winnings. Canadian winner of $40 million Tom Christ gave his entire jackpot to a charitable foundation, which left him penniless. This is a rare example, seeing as how he’s one of the only lottery winners to shed all of his money at once to a charitable organization, no less. You may find that when you come into some money, you suddenly have more devoted family members, and a bunch of new best friends who all need something with you. If you aren’t used to having money, don’t let the excitement of your new-found wealth blind you—don’t just hand out money. While it can be nice to help people out once you have money, plenty of people will take advantage of this. It is up to you to decide who is deserving of your charity, and who is trying to take advantage of you.
These lessons in protecting one’s assets are just as relevant for anyone with savings, regardless of their net worth. Learn from the mistakes and successes of these lottery winners—don’t experience the tragedy of mismanaging money for yourself. If you continue to work, enlist an expert, plan for your family in the future, and be careful how you give, you’ll likely be able to enjoy your fortune, instead of having it weigh you down. If anything, we learn from these lottery winners that you should take extreme caution with large sums of money, no matter how good your intentions are. Information for this article was provided by the financial experts of Woodward Check Cashers, who assist people in cashing in lottery winnings in Detroit.
| Written on 2/15/2014 by Dixie Somers. |