Do people who win big lottery prizes actually get to *enjoy* the wealth? [Archive]

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Buried Alien

01-12-2007, 10:40 AM

Many of us have dreams of someday hitting a big lottery jackpot and living the rest of our lives in financial security (and then some). But in fact, do lottery winners actually ever get to enjoy their wealth?

Check this out (http://dailynews.att.net/cgi-bin/news?e=pri&dt=070112&cat=news&st=newsd8mjri400&src=ap).

Stories such as this one are not unique or new. I've heard/read quite a few stories about people striking it mega-rich in the lottery, only to be beset with all kinds of problems that they didn't have before winning and that they might not have encountered had they not suddenly become rich.

Is it really possible to win the lottery and actually enjoy the trouble-free life that one would expect to come as a result of such wealth? Or is this one of those "be careful what you wish for" deals?

Buried Alien (The Fastest Post Alive!)

Sean Walsh

01-12-2007, 10:44 AM

Hang on..........he wins the lottery, and then goes spending the money at casinos? And it's at the casinos, mind you, that his major problems seem to stem from.

I'd just take the lump sum, put it all in the bank and some mutual funds.....and probably continue my life as usual.

My parents would call it cheap........I would call it thrifty and remind them them I won the lotto, not them. :)

Jeff Brady

01-12-2007, 10:51 AM

The problem is they don't have any plans for the money and just think that they can do anything, that money will solve any problem.

I have a detailed list of things I'd do with that kind of money, from real estate, investments/savings funds, donations to schools, hospitals, medical research, and other charities, plus paying off all debts, getting my life in order, helping out my family & friends, and starting a business or two.

High-stakes gambling and drug & alcohol abuse is a stupid way to go. You were lucky ONCE. The rest takes hard work, just like regular life.

Ontir

01-12-2007, 11:00 AM

The problem is, that people think money will change them. It doesn't, it just amplifies whatever you were before you got it.

If you win a major jackpot, $10 million, or more, the first thing you do, is find yourself a good, private banker. They generally won't touch anyone with less than $6 million. Give them the 6 to turn into "real money," buy yourself a house which will give you some tax shelter, outfit it decently; but not extravagantly, and continue to work for at least the first 2 years. By the end of that time, you should, at the very least, be making more off the interest on the $6 million, than you can working your old job. Once the money is working for you, you can begin to have some fun - within reason.

The Fury

01-12-2007, 11:01 AM

Whittaker won a nearly $315 million on Christmas 2002, then the largest undivided lottery prize in U.S. history. He took his winnings in a lump sum of $113 million after taxes.
$200 million in taxes? Wow...seriosuly.

I'd do what most people here are saying, invest in real estate, saving and who I'm going to give parts of it too (depending on the win of course). etc.

jessecuster3

01-12-2007, 11:03 AM

I read an article once that said something like 2/3 of lottery winners go bankrupt inside of 5 years.

I think you also have to take into account that alot of the time it is lower-class /almost poverty stricken people who win and its more money than they ever dreamed of, so they spend and splurge like crazy without thinking of the long term effects.

Shellhead

01-12-2007, 11:03 AM

Dreadstar

01-12-2007, 11:06 AM

$200 million in taxes? Wow...seriosuly.]

No. A lump sum is the present value of what payment spread over 30 years would be worth. It entails a lot of interest calculation on future payments held in escrow.

His taxes probably were in the 50% range, though.

jessecuster3

01-12-2007, 11:09 AM

$200 million in taxes? Wow...seriosuly.

I'd do what most people here are saying, invest in real estate, saving and who I'm going to give parts of it too (depending on the win of course). etc.

Its not $200 million in taxes. If you take it one lump sum it is reduced dramatically. He was probably closer to 180 to 200 million and even then the tax rate was between 46 and 48%. This is the same rate that gambling winnings are based on.

As an aside, professional poker players in the early 1980's were able to get legislation passed that allowed them to be taxed as workers rather than as winnings because they could prove that the grind it out nature of playing for hours on end every day was the equivalent of working.

The Watcher

01-12-2007, 11:18 AM

I'd like to volunteer to find out. :)

Seriously, if I ever won the lottery or came into a huge sum of money some other way I think I'd be smart enough to invest wisely and spend repsonsibly while still enjoying some of the perks of wealth.

jessecuster3

01-12-2007, 11:33 AM

Seriously, if I ever won the lottery or came into a huge sum of money some other way I think I'd be smart enough to invest wisely and spend repsonsibly while still enjoying some of the perks of wealth.

This is excatly why you will never win. The lottery prohibits common sense.

Hence my favorite saying: Lottery: A tax on people who are bad at math.

Ontir

01-12-2007, 11:51 AM

A few years ago, Oprah did a show on lottery winners, and one of the things they talked about, is all the relatives that come out of the woodwork when there's a lottery win. I also think that when someone gets something like $100 million, it's so vast to them, that they can't imagine ever being able to spend it all. Here in LA, you could buy 5 houses, not furnish them, and have blown it all!

Drew Van T.

01-12-2007, 12:13 PM

That guy who spends everything at the casinos is simply being honest and consistent: he got the money from gambling, he's putting it back into gambling. Sure, there are better uses for the money, but I would have said the same thing about the dollar (or whatever the pocket change was) that he spend on the ticket.

moonlight_night78

01-12-2007, 02:33 PM

IMO, Jack Whittaker is just one example of somebody coming into a lot of money and after doing just things that are incredibly stupid, take no personal responibility for their actions and blame it all on the lottery.

This is the same person, that if I remember right, brought over $100,000 in cash to a strip club and got robbed of said money. To see his current problems, really isn't any surprise to anybody who has watched/read anything about lottery winners. He's the poster boy of "stupid lottery winner"

Xero Kaiser

01-12-2007, 03:04 PM

Man, I don't know what I'd do with that kinda money. I'd be too lazy to invest it in anything, but I wouldn't be spending it either. Hell, I don't even spend the money I've got now. I've just got cash looking at me like, "spend me, idiot" and I'm like, "on what?". If I had millions of dollars I'd get myself a new computer, a bigger TV and then run out of ideas.

I really don't get how people can blow that kinda cash

howyadoin

01-12-2007, 04:24 PM

Loren

01-12-2007, 04:38 PM

I suppose another problem that lottery winners don't anticipate is all the people asking them for money. Charities, political parties, friends, family members, etc. The really tough ones would be the friends and family, especially the ones with a medical problem or comparable hard luck story.

There's a relatively easy way to avoid the brunt of this problem. Like Ontir suggested, if you win the lottery you need to contact an accountant or private banker. And it's important that he's the FIRST person you contact.

In other words, once you realize you have a winning ticket, don't tell anybody. Not even family. And definitely don't go to the lottery board to collect. Instead, put the ticket in a very safe place (like a safe deposit box), and get to work with a money manager.

Set up a lot of trusts for yourself and for people and interests that you care about. If you plan on making some large initial purchases (say, a house) designate specific money for that purchase. Basically what you want to do make arrangements to tie up most (if not all) of your money as soon as the world learns you're the winner and you collect your lump sum.

That way, once cousins and "charities" come calling, you are simply not in a position to give them very much. And it also prevents you from being foolish with your money and losing it all.

Xero Kaiser

01-12-2007, 04:49 PM

I guess it helps to have an imagination.

Probably. But my more imaginative family members are always broke. So I'll stick with being a square with some money

howyadoin

01-12-2007, 04:52 PM

Probably. But my more imaginative family members are always broke.Then again, they didn't win $150 million.

So I'll stick with being a square with some moneyBut are those the only two options? Couldn't you donate money to charities, for instance?

Captain_Video

01-12-2007, 04:54 PM

You hear more lottery invoked tales of misery than any other ( probably because these are more sensational and it is seen as karma or something ).

I don't actually believe it is possible to win the lottery and be truely happy as the journey to wealth and the hardships are what make you respect it and not abuse what you have acquired, to me this is why Paris Hilton is so despised, she has not really earned her money in a traditional sense and obviously does not seem to respect it.

I had this conversation at work recently and most people could not believe that I didn't want to win the lottery, "what happens if you accidently win it"...( I don't buy a ticket ever so I would be stunned ), most people could not believe I didn't play the game.

Seems everyone is hung up on the idea of "easy" wealth, I am not religious but it all seems like "The Devil and Daniel Webster" to me.

Obviously I am generalising hugely though based on personal bias, I am sure that some people are very happy sitting on millions and living the good life.

Nikita

01-12-2007, 04:57 PM

howyadoin

01-12-2007, 04:58 PM

... to me this is why Paris Hilton is so despised, she has not really earned her money in a traditional sense and obviously does not seem to respect it....You don't think her repugnant skankiness has anything to do with it?

Captain_Video

01-12-2007, 05:06 PM

You don't think her repugnant skankiness has anything to do with it?

Well yeah obviously, but thats the icing on the cake.

She is repugnant though isn't she.

jessecuster3

01-12-2007, 05:22 PM

Yeah but Paris Hilton is a whole different story, she doesn't have millions, she has billions. It is such a completely unreal amount of money its no wonder she wound up fucked up.

darkkeeperjr

01-12-2007, 07:30 PM

I sorta have a plan in place when i win the lottery. Still I have some questions. Can you collect with out the media telling everybody on the planet.? can you have a private banker collect the money for you to avoid the media even knowing who won?

I think one of the first things you need to do is get away.you can't win big and go back to your house or apartment with out having the world come to your door. You need to hit your family and close friends off first before they even know how much money you got. I like the private banker idea,think I'm going to in place it my plans.

artstar1

01-12-2007, 08:21 PM

Three words: Save, Invest, Give. You can't go wrong with this formula. Buy a few building and rehab them, start a small business (you have the money to grow it right), start several charities and after this is done, spend well. Save about 1 million to fall back on. Save a million to spend. Invest and Save about 6 million and start charities with the rest. Something similar to this will be pretty good but keep in mind nothing is 100% and people who know this formula (as stated before) will probably not win this kind of money. Money will control you or you will be controled by it.
I sorta have a plan in place when i win the lottery. Still I have some questions. Can you collect with out the media telling everybody on the planet.?
I don't believe so. It has to be in some way shape or form able to be divulged to the public. I don't know why. I do know a friend of a friend who won 100,000 (after taxes) and told no one for months. He and a the friend are starting a business now.

-Arty

superion

01-13-2007, 04:47 AM

A certain percentage of people who win the lottery are going to be stupid and irresponsible individuals. They were probably stupid and irresponsible individuals before they became rich and winning the lottery wasn't going to change that as in this case with the $315 million winner. I am sure there are a lot of winners we never hear of who take the money and use it wisely and don't end up like this guy.

As for family and close friends if someone really needs the money because they are ill and have heavy hospital bills paying those bills off is a good thing. But if people want money from you for stupid things like buying a expensive sports car or other crap like that you need to tell them to drop dead.

I find it funny when winners talk about relatives they never knew they had showing up. If you never knew them how can you be sure they are related and are not just scamming you.

Solaris

01-13-2007, 07:59 AM

$200 million in taxes? Wow...seriosuly.

I'd do what most people here are saying, invest in real estate, saving and who I'm going to give parts of it too (depending on the win of course). etc.

It's not just taxes... the lump sum payoff is a reduced amount over the actual 300+ million he'd get for annual payments. So, the reduced amount for immediate payoff then gets taxed.

As to the original question, despite what we might hope, not everyone who wins a lottery is a nice person, or a smart one. (Frustrating, ain't it?)

For those who are nice, and smart, probably the biggest challenge is dealing with family, friends, and charities who want a handout. Lottery winners get pestered a lot by organizations soliciting funds... everything from mail and doorknocking bombardment, to locals "in the know" who expect that "of COURSE you'll be willing to donate "x" amount to "y" cause, because the cause is so worthy... and who then name you cheapskate, selfish, etc. when you don't. What those people (and family and friends) don't realize is that even a giga-jackpot is a *finite* amount of money... and people *can* go through even that much money quite fast, if they aren't careful and smart.

There's a certain kind of envy many people feel for those richer/more fortunate than they are. I've seen this kind of thing leveled at people like Bono: he worked hard for his money (and sacrificed a lot, with the early years in particular)... and though he spends a lot of his time and effort working with One and other foundations, I've heard many people criticize him for not dumping his entire fortune into the charitable kitty. But even his fortune would be only a drop in the bucket to what's needed---a big drop but a drop---because no one person, or their fortune, can fix the world's problems. Many people working together *can*, and that's what he promotes... but he also has a right to reserve some of his fortune for his family and his life, however he chooses.

Lottery winners often go through the same thing. It may not matter that they took twenty percent up front and put it into charities, or allocate some funds for charity every year---if *this* person isn't getting the money, they often feel resentment, anger, and see the winner as "selfish."

If we won, we'd try to be smart with it. A lot would go into investment, so that we could live off the interest. Some would go into gifts, trust funds, etc. for relatives and friends. Some would go to charities, and I personally like the idea of reserving a certain amount of the yearly income that will go to a charity, but making it a different one each year. Any other contributions during the year would be the same kind that we would do now: maybe $10-$50, depending. And, a piece of it would go into fulfilling a few dreams we have---travel, new cars, etc.

Thing is, when you win something like this, you find out the same kind of thing that any rich person has to deal with: who are family and friends who love you for yourself, and who are the ones who want to put a pricetag on their care for you. That can be very painful, and lottery winners need to understand that it's gonna happen.

The best you can do is to set up the money so that some of it takes care of you and your family, some of it is for fun, and some goes to help others. As to how to do that, it's a good idea to hire both a good lawyer, and a very good accountant. (And as to the latter, have an outside firm do yearly audits---to make sure your accountant will keep things straight. :)

Naldo

01-13-2007, 08:35 AM

If I won that kind of money, the first thing I'd get is amnesia.

Then I'd reduce my ad rates to below those of even my least expensive competitor. Kill their business, become the only game in town and write off the losses.

THEN retreat to the dark castle with the roast baby and screaming soul frittata.

Hey someone's gotta use new found wealth for evil. :evilsmile

PatrickG

01-13-2007, 09:21 AM

I once bought $10 in lottery tickets on a bet I wouldn't win.

And I won and kept winning until I had $100. And spent it all to see if the streak would continue. It didn't.

However...

If I had $100M, I KNOW what I would do.

I would pay off my student loans. I would set aside money for grad school, enough for two master's and two PhDs from the schools of my choice.

Being generous, that's $750,000 dollars.

I'd get a new car with every feature I could ever want. I could do that for $50,000.

I'd get a house in ths distant suburbs of Chattanooga or Atlanta, around $200,000.

Okay. There's a million.

Six million in savings bonds, guaranteeing an annual income of around $250,000 a year in interest for life.

That's seven million.

Okay... I'm feeling festive. So howabout $3,000,000 allocated to a HUGE party EVERY WEEKEND for me and any of my ten closest friends who feel like it. Trips to Disney! Trips to New York! Trips to foreign countries! I'm not forking over a dime except in celebration though. No business plans. No investment schemes. No bailing anyone out. In case of emergency, anything somebody absolutely needs comes out of my $250k income.

We're at $10 million.

I'm going to set aside $5 million for a comic book company. If I stick with scouting new talent, I can produce three to five books a month for 25 years without dipping into my annual income or ever turning a profit.

That's $15 million.

Let's start getting crazy here.

I'll set aside $10 million for legal expenses.

I'll set aside $10 million for various charities.

I'll set aside $5 million in grants for various harebrained ideas, awarded at $100k a year.

That's $50 million.

I give my parents $10 million. I trust my father to manage an amount like that very well and trust that any genuine need in my family will be managed by my parents. Their retirement and health expenses should be scure.

I buy a house in southern california for $20 million, maybe a ways out from L.A. but within driving distance. I set aside $10 million for any taxes, fees or expenses I might incur and towards some expenses like security.

That's $90 million.

With my remaining $10 million... well. At this point I'm financially secure for life. I'm on track for two Ph.D's. I write five comic books a month. I've shown my friends a good time, travelling the world. I have two houses and a car and lawyers on retainer.

I call up Joss Whedon or a creative type I trust and look for a modest entertainment investment opportunity with someone whose work I like. And it's no loss if it doesn't pay off, really.

At this point, my worst case scenario shy of the U.S. collapsing is a divorce or two.

And, in the end, I'd STILL have two Ph.D's and a six figure lifetime income in savings bond interest I'd probably still manage to make off with -- as well as some friends and a ton of writing experience. Oh. Boo hoo.

I'd have so much security built up at that point that if anybody MANAGED to scam, con or sue me out of my holdings, I'd STILL never have to work a day in my life and I might actually have to go out and be somebody important. Which I feel like I'd be in a great position to do.

Zero Hunter

01-13-2007, 12:36 PM

I think it all comes down to what kind of person you are. If you a retard about money before you win you are going to be a retard after. Alot of people are just piss poor about manging their money.

I have a friend whos Dad won 3 million back when we were in High School about 15 years ago. Problem was his dad has always been kinda a party guy who likes to drink. So he marries this women he had been messing around with for a while who had 4 kids of her own and bought a nice house back in the woods way of the road. Needless to say since both his dad and his new stepmom were idiots about money they are broke now and bakc to working normal jobs. Thing about him is it would not have mattered how much money he would have won he would have still been broke by now. That is just the kind of person he is.

If you can not lead a happy life with 100 million dollers than you are just a person who is not going to be happy about anything.

K'Nort

01-13-2007, 06:08 PM

Can you collect with out the media telling everybody on the planet.? can you have a private banker collect the money for you to avoid the media even knowing who won?

It will depend on what you're playing, but at least some games have fine print on the ticket saying that by buying the thing, you're automatically giving consent for your name and likeness to be used for publicity purposes.

In terms of the people coming out of the woodwork, I've always figured one crucial thing to do right off the bat is some sort of year-long (or more) trip overseas. Give them time to give up and go away.

darkkeeperjr

01-13-2007, 06:48 PM

howyadoin

01-13-2007, 07:25 PM

In terms of the people coming out of the woodwork, I've always figured one crucial thing to do right off the bat is some sort of year-long (or more) trip overseas. Give them time to give up and go away.My idea for this would be to travel some place tropical and stay there till you get bored. Once that happens, travel to some place that's a lot different, and again stay till you're bored.

Once the boredom threshold gets really low, come back home.

Magneto_X

01-14-2007, 12:31 AM

Yeah but Paris Hilton is a whole different story, she doesn't have millions, she has billions. It is such a completely unreal amount of money its no wonder she wound up fucked up.

Wrong. IIRC her inheritance is only into the lower millions. She has added to it with interviews, being paid to be a clubs (all celebrities do this), endorsements etc.

But she isn't going to be an billionaire once her parents die. Plus she has to share half with Nikki.

howyadoin

01-14-2007, 03:27 AM

Wrong. IIRC her inheritance is only into the lower millions. She has added to it with interviews, being paid to be a clubs (all celebrities do this), endorsements etc.

But she isn't going to be an billionaire once her parents die. Plus she has to share half with Nikki.Well fuck, that changes everything.

Thanos_6383

01-14-2007, 07:32 AM

100 Million dollars? Ok,here's what I would do.

#1.:D
#2.Get out of the Military,and not look back
#3.Go back to Connecticut ASAP and retire my parents.
#4.Move to another country,Stay out of sight,grow a long beard and hope no one would ever recognize me:p

heretic

01-14-2007, 09:35 AM