Lottery Winner & Bankrupt?!

AnimeSpirit · 03-22-2007, 10:31 PM

http://articles.moneycentral.msn.com...rMillions.aspx

I thought I'd drop a thread about this. A lot of people seriously don't know just how fast money can go when you don't know how to manage large sums of it.

Most lottery winners lose their fortunes through various common means. The biggest way to lose your mills is by going out on the first day to buy a house, new car, a boat, and let the taxes eat you alive because Uncle Sam WILL get his share even though he already got some when you collect your prize.

Another method to rob you of your treasure is not learning how to say NO to the vultures who come knocking at your door when everyone learns you hit the big one. It takes a whole 24 hours or less before you start seeing the palms of every deadbeat you've ever met.

Among the first things you wanna do with your fortune is remind yourself that your money is not going to be limitless if you don't be careful with it. You must set spending limits for yourself and have the self-control to stick to it! The first thing you'll be tempted to do is quit your job. Quitting work entirely is never advisable. It would be best to either continue working a less demanding (or more enjoyable) job. If you know anything about business management, you may want to open a business of your own with your winnings. This can serve as a fair investment if you know what you're doing.

Secondly, you'll want to pay off ALL of your current and past debts which is great and advisable. The smart spender will then take a considerable amount of the winnings (between 1/4 and 1/2) to put into a long-term investment program of some kind. This has become your nest egg to invest in your long-term future.

Now, the first rule of investing is diversity. Invest in several programs of varying degrees of risk and payoff. If you are the type, you may want to donate some to charity. This gives you a tax credit and it's just the nice thing to do. Be CAREFUL!!! Active charity programs WILL be pestering you on the phone and by mail. If you want to donate to charity, pick one or two of your favorite charities and donate a small, but generous, sum to them. Do not be afraid to tell all other charities who contact you, "Sorry, but I have already donated everything I am prepared to donate to charity." and tell them that it is not necessary to contact you any further. Do not let them strike your conscience because you didn't donate to them all! You are not obligated to prove to everyone that you are charitable beyond reason.

After all of this, you can then begin to do some fun things with your money. Open a mortage on a house with a reasonably long duration on it (10-15 years or more), but do NOT pay it off right away. You're asking for tax problems if you do. If you want a new car too, do the same thing there! Remember that you are also keeping your spending limits in mind, so you should NOT be able to do ALL of this in one day or even one week.

These are simple tips and much of it is common sense. I am no financial expert, but I think these are good tips to keep in mind should you ever hit the big one!

Isabella · 03-23-2007, 12:39 AM

You are very wise for your age.

Al Swearengen · 03-23-2007, 03:06 AM

As a general rule, I think everything Anime said makes sense. But what course of action to take would in large part be determined by exactly how much money you've won. A million bucks?... ya might wanna keep that job, maybe scale your hours back, and enjoy having a different attitude about work. Ten million or more?... life is too short to spend even another millisecond doing something you DONT want to do... which in my case would pretty much be anything other than having an absolute BLAST with friends and family, so go ahead, quit the damn job, and become a man, or woman, of leisure. You can afford it. You're free now to pursue your dreams. Improve yourself, body and mind. Devote your time to becoming cultured and traveled, learning new things and helping others. And you can afford to be generous now, so keep your eyes peeled for someone who works their ass off but just cant seem to catch a break, and "make their day"...what could be more fun than that? As long as you're sensible about it and dont try to spend it all in a lifetime, there should still be plenty of money left for your grandchildren to inherit. How many houses do you need? How many cars? See what Im gettin at here? As for the "vultures", just get yourself a personal assistant (butler) to screen your calls, do your bidding, and act as a buffer between you and the world, then ya dont have to worry about it. Or, you could just pick up and move where-ever ya want, not tellin anyone until you're there, give your unlisted phone number out to only the people you want to have it, and take it easy!

Isaac-Saxxon · 03-23-2007, 07:44 AM

Isaac (opinion) ! We work hard all week and only have a small amount of time for ourselves. Then one day the big winner hits and we are rich. We have everything we want we think. Then all this extra time to do as we please and that includes much time to think about bigger things in life such as health and love and death. I have seen very nice people with to much time and to much money become very unhappy people. Not enough money not good

what is enough is different for everybody. What I am saying that some where in the middle and working each day and feeling like hey I did this today and I am better off for it. I may be tired but this I have done. So while we all are waiting on easy street and some may be there just beware of the mind game it can play on you. Be careful what you wish for you just might get it

Words from Isaac

LateNight · 03-23-2007, 07:57 AM

reminds me of the Homeless guy who won the lottery some years back. This guy was living in a brokedown car with his dog. Then won some big lottery.

Reporters asked him: "Is this going to change your life?"

Homeless guy: "Uhh, Hell yes it's gonna change my life. I've been living in my car!"

AnimeSpirit · 03-23-2007, 08:11 AM

Quote:

Originally Posted by Isabella

You are very wise for your age.

Thanks!

I've never hit the jackpot myself yet, but I know pretty well how to manage money. I went into debt while I was in the military and after thorough reflection and a serious change in strategy, I learned how to better manage my finances. I wrote my own budgeting system on my computer about 2 years ago and it hasn't failed me yet. I am slowly repairing my credit, I'm hoping to be completely out of debt by the end of this year.

I have spoken to my sister before what I would do if I ever won the lottery. What I would do is just about everything I discussed above, except for buying a boat (not really interested in that). I'd pay off all of my debts, but I probably wouldn't get an expensive sports car, just one that looks nice and runs efficiently. I'd definitely buy a house because I'm renting right now.

However, I'm a fairly experiences investor. Show $50,000 of spare cash lying around and I'll show you the nearest mutual fund. I know about mutual funds because I once worked for an insurance firm that also dealt with mutual fund accounts. I also play the Foreign Currency Exchange. Given the extra funds, I'd probably play the stock market too. Also, CDs (certificates of deposit) can be very profitable if you know how to deal with them. I've also had college training in business management and would start a business here in Shreveport in a heartbeat given the funds to do so.

It's a funny thing too. Most people don't know that you can hire an attorney and give him an "allowance" and he will invest that allowance for you in any way you request him to. This is the best route for people who know nothing about investing. For them, I'd highly advise screening your attorneys BEFORE you committ to hiring one for this purpose. Soem of them should not be trusted with so much of your money, so take care here! After you hire one, don't let him do ALL of the work. Have him walk you through everything he is doing with your money.

By investing a fraction of your winnings, you stand a far better chance of having money for the rest of your life than if you just go out and spend it all.

joepole · 03-23-2007, 10:10 AM

People that play the lottery aren't, by definition, very savvy so why would it be surprising that they don't know how to handle their business?

Isaac-Saxxon · 03-23-2007, 10:35 AM

Quote:

Originally Posted by joepole

People that play the lottery aren't, by definition, very savvy so why would it be surprising that they don't know how to handle their business?

Your difinition of not savvy ?

joepole · 03-23-2007, 10:42 AM

Not particularly bright or wise.

AnimeSpirit · 03-23-2007, 10:42 AM

Quote:

Originally Posted by joepole

People that play the lottery aren't, by definition, very savvy so why would it be surprising that they don't know how to handle their business?

I agree. People who do not know how to properly manage money are the ones who end up broke and playing the lottery. The ones who win continue managing their money the same way and end up broke again. That's basically how it tends to work.

joepole · 03-23-2007, 10:46 AM

There are exceptions, though. My mom is a relative smart lady who was playing $5 Caribbean Poker at one of the casinos and got a royal flush that paid $130,000. About a year later she got another one for $380,000.

Casinos aren't as bad as lottery tickets, thought, because at least casinos provide entertainment fr your money.

Isaac-Saxxon · 03-23-2007, 10:54 AM

Quote:

Originally Posted by joepole

There are exceptions, though. My mom is a relative smart lady who was playing $5 Caribbean Poker at one of the casinos and got a royal flush that paid $130,000. About a year later she got another one for $380,000.

Casinos aren't as bad as lottery tickets, thought, because at least casinos provide entertainment fr your money.

Joe have you ever purchased a lottery ticket ???

AnimeSpirit · 03-23-2007, 11:26 AM

Quote:

Originally Posted by joepole

There are exceptions, though. My mom is a relative smart lady who was playing $5 Caribbean Poker at one of the casinos and got a royal flush that paid $130,000. About a year later she got another one for $380,000.

Casinos aren't as bad as lottery tickets, thought, because at least casinos provide entertainment fr your money.

That is to say that she is considerably lucky, but that say nothing for her ability to manage money. But yes, there are exceptions. Some people who win the lottery are people who know exactly how to manage money, but were merely down on their luck. Such people shouldn't have much trouble after winning the lottery.

joepole · 03-23-2007, 11:29 AM

The vast majority of lottery tickets are bought by people that shouldn't be buying lottery tickets. It's basically a tax on people that are bad at math.

I have bought lottery tickets before. I didn't win.

AnimeSpirit · 03-23-2007, 11:51 AM

Quote:

Originally Posted by joepole

The vast majority of lottery tickets are bought by people that shouldn't be buying lottery tickets. It's basically a tax on people that are bad at math.

I have bought lottery tickets before. I didn't win.

I don't buy them regularly, but I have before. The chances of winning are, indeed, astronomical, yet people still cling to hope. I guess you can't always blame them.

03-22-2007, 10:31 PM	#1
AnimeSpirit SBLive! Veteran Join Date: Dec 2006 Location: Nowhere Age: 40 Posts: 1,659 Rep Power: 251	Lottery Winner & Bankrupt?! http://articles.moneycentral.msn.com...rMillions.aspx I thought I'd drop a thread about this. A lot of people seriously don't know just how fast money can go when you don't know how to manage large sums of it. Most lottery winners lose their fortunes through various common means. The biggest way to lose your mills is by going out on the first day to buy a house, new car, a boat, and let the taxes eat you alive because Uncle Sam WILL get his share even though he already got some when you collect your prize. Another method to rob you of your treasure is not learning how to say NO to the vultures who come knocking at your door when everyone learns you hit the big one. It takes a whole 24 hours or less before you start seeing the palms of every deadbeat you've ever met. Among the first things you wanna do with your fortune is remind yourself that your money is not going to be limitless if you don't be careful with it. You must set spending limits for yourself and have the self-control to stick to it! The first thing you'll be tempted to do is quit your job. Quitting work entirely is never advisable. It would be best to either continue working a less demanding (or more enjoyable) job. If you know anything about business management, you may want to open a business of your own with your winnings. This can serve as a fair investment if you know what you're doing. Secondly, you'll want to pay off ALL of your current and past debts which is great and advisable. The smart spender will then take a considerable amount of the winnings (between 1/4 and 1/2) to put into a long-term investment program of some kind. This has become your nest egg to invest in your long-term future. Now, the first rule of investing is diversity. Invest in several programs of varying degrees of risk and payoff. If you are the type, you may want to donate some to charity. This gives you a tax credit and it's just the nice thing to do. Be CAREFUL!!! Active charity programs WILL be pestering you on the phone and by mail. If you want to donate to charity, pick one or two of your favorite charities and donate a small, but generous, sum to them. Do not be afraid to tell all other charities who contact you, "Sorry, but I have already donated everything I am prepared to donate to charity." and tell them that it is not necessary to contact you any further. Do not let them strike your conscience because you didn't donate to them all! You are not obligated to prove to everyone that you are charitable beyond reason. After all of this, you can then begin to do some fun things with your money. Open a mortage on a house with a reasonably long duration on it (10-15 years or more), but do NOT pay it off right away. You're asking for tax problems if you do. If you want a new car too, do the same thing there! Remember that you are also keeping your spending limits in mind, so you should NOT be able to do ALL of this in one day or even one week. These are simple tips and much of it is common sense. I am no financial expert, but I think these are good tips to keep in mind should you ever hit the big one!

03-23-2007, 12:39 AM	#2
Isabella Advanced Member Join Date: Aug 2006 Posts: 487 Rep Power: 226	You are very wise for your age. __________________ Where there is a will there is a way!

03-23-2007, 03:06 AM	#3
Al Swearengen Advanced Member Join Date: Aug 2006 Posts: 849 Rep Power: 236	As a general rule, I think everything Anime said makes sense. But what course of action to take would in large part be determined by exactly how much money you've won. A million bucks?... ya might wanna keep that job, maybe scale your hours back, and enjoy having a different attitude about work. Ten million or more?... life is too short to spend even another millisecond doing something you DONT want to do... which in my case would pretty much be anything other than having an absolute BLAST with friends and family, so go ahead, quit the damn job, and become a man, or woman, of leisure. You can afford it. You're free now to pursue your dreams. Improve yourself, body and mind. Devote your time to becoming cultured and traveled, learning new things and helping others. And you can afford to be generous now, so keep your eyes peeled for someone who works their ass off but just cant seem to catch a break, and "make their day"...what could be more fun than that? As long as you're sensible about it and dont try to spend it all in a lifetime, there should still be plenty of money left for your grandchildren to inherit. How many houses do you need? How many cars? See what Im gettin at here? As for the "vultures", just get yourself a personal assistant (butler) to screen your calls, do your bidding, and act as a buffer between you and the world, then ya dont have to worry about it. Or, you could just pick up and move where-ever ya want, not tellin anyone until you're there, give your unlisted phone number out to only the people you want to have it, and take it easy! Last edited by Al Swearengen; 03-23-2007 at 04:23 AM.

03-23-2007, 07:44 AM	#4
Isaac-Saxxon SBLive! Veteran Join Date: Sep 2006 Posts: 4,421 Rep Power: 307	The problem with having to much money Isaac (opinion) ! We work hard all week and only have a small amount of time for ourselves. Then one day the big winner hits and we are rich. We have everything we want we think. Then all this extra time to do as we please and that includes much time to think about bigger things in life such as health and love and death. I have seen very nice people with to much time and to much money become very unhappy people. Not enough money not good what is enough is different for everybody. What I am saying that some where in the middle and working each day and feeling like hey I did this today and I am better off for it. I may be tired but this I have done. So while we all are waiting on easy street and some may be there just beware of the mind game it can play on you. Be careful what you wish for you just might get it Words from Isaac

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03-23-2007, 07:57 AM	#5
LateNight SBLive! Veteran Join Date: Jun 2006 Posts: 1,609 Rep Power: 257	reminds me of the Homeless guy who won the lottery some years back. This guy was living in a brokedown car with his dog. Then won some big lottery. Reporters asked him: "Is this going to change your life?" Homeless guy: "Uhh, Hell yes it's gonna change my life. I've been living in my car!"

03-23-2007, 10:10 AM	#7
joepole SBLive! Veteran Join Date: Sep 2006 Posts: 1,606 Rep Power: 248	People that play the lottery aren't, by definition, very savvy so why would it be surprising that they don't know how to handle their business?

03-23-2007, 10:42 AM	#9
joepole SBLive! Veteran Join Date: Sep 2006 Posts: 1,606 Rep Power: 248	Not particularly bright or wise.

03-23-2007, 10:46 AM	#11
joepole SBLive! Veteran Join Date: Sep 2006 Posts: 1,606 Rep Power: 248	There are exceptions, though. My mom is a relative smart lady who was playing $5 Caribbean Poker at one of the casinos and got a royal flush that paid $130,000. About a year later she got another one for $380,000. Casinos aren't as bad as lottery tickets, thought, because at least casinos provide entertainment fr your money.

03-23-2007, 11:29 AM	#14
joepole SBLive! Veteran Join Date: Sep 2006 Posts: 1,606 Rep Power: 248	The vast majority of lottery tickets are bought by people that shouldn't be buying lottery tickets. It's basically a tax on people that are bad at math. I have bought lottery tickets before. I didn't win.

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