Why Do Most Lottery Winners Go Broke?

Source: auriesvilleshrine.com

We frequently hear about people all over the world who have won the jackpot and who instantly made a huge fortune. The highest lottery prize ever won was north of 1500 million dollars, and dozens of people have won hundreds of millions of dollars just by correctly guessing several digits. However, did you know that most of the winners are not rich right now? Keep on reading to find out why most of the lottery winners go broke.

Fast cash

Source: northlakessports.com

Most of us are used to one specific number every month, we earn that cash with our hard work, and we know how to divide it between our bills, utilities, and things that make us happy. When people get a lot of money right away, they don’t know what do to with it.

Yes, we all think that we know what we would do with millions of dollars, and most of us can’t actually imagine how much that is, but when we see more than 9 digits on our accounts, we stop thinking rationally.

It is far easier to spend someone else’s money than the ones that you have earned by hard labor, and winning the lottery is pretty much the same. You feel like the money just fell from the sky, and you feel that no matter what you do, even if you spend it all, you are never going to be at a lower point than what you had before getting those funds.

Unfortunately, this is not always the case, and many people have not only spent all the funds they got from the jackpot, but also all the money they had before winning.

They don’t get as much as you think they do

Source: sacbee.com

When we think of lottery winners, we believe that the number that we see on the “biggest prize ever” lists is the same as the number that the people who got it. Even though this may happen in some European countries, more often than not, in most lotteries around the world, there are huge fees and taxes on this.

People are not aware of this fact, and they start spending without thinking about all the fees and taxes that they need to pay. Soon after, especially if they have to pay the fees on their own, and if they are not deducted from the initial sum, they end up spending even the share for the taxes.

This leads not only to bankruptcy, but also to legal charges and additional problems that make the winner lose everything that they had, and owe their country so much more.

They spend irrationally

Source: cnbc.com

What would you do if you got all the money that you could ever ask for? Most of us would say that we would buy an amazing car, purchase the house of our dreams, and then take a month-long vacation on a tropical paradise island. However, what happens after you do all those things and you still have millions left on your account?

Well, this is where people make the biggest mistakes, and they start purchasing items that they don’t need. They start buying brands that they have never heard of before, they think that now it is okay to get diamonds and crazy expensive shoes, and they don’t pay attention to the price tag anymore. If you click here, you will see that even though it is not easy to be rational when it comes to spending your lottery money, you can make some smart decisions that are not going to cost you your fortune.

On websites like lottonigeria.com, you can see that you don’t have to limit yourself when it comes to getting the things that will make you happy, but this doesn’t have to be irrational spending that will lead to you being broke.


Source: irishmirror.ie

Now let’s talk about something that is not really talked about – the pressure that comes from friends and family members. After you win the lottery, everyone is your friend, and your family members that didn’t even want to talk to you when you were having a Christmas dinner together, now are the people who care about you the most.

Suddenly, everyone needs to borrow some cash, and if you don’t share it with them, you are portrayed as the bad guy who could even give a fraction of their fortune. When we borrow funds from someone, and when we have a limited number on our accounts, they know that they have to pay it back, but when you have millions, no one expects you to ask for the funds back.

So, having the pressure of everyone around, no matter how close they were with you, to share your funds with them, can easily lead to the winner ending up broke. Everyone wants a slice of the cake, and the winner feels like they are not allowed to say no. So, they have the choice between losing their finances or their friends, and they usually choose the former.

Wrong investments

Source: fool.com

Finally, people always want to double or triple their winnings, and they choose to do this by investing. This is actually a smart idea, but as long as it is done properly. Many believe that they should invest in places that are theoretically safe, and could lead to much more cash than places that are well-known and have a smaller return.

This is where huge mistakes are made, and instead of trusting a well-reputed business, and instead of investing in something that will actually give a stable payback and interest, people choose to invest in something shady and they end up losing everything.

Winning the lottery can be much more physically and emotionally tolling than many would think, and it is said that 70 percent of the people who have won a huge prize ended up with nothing no more than several years after their winning. So, if you are ever in a position to have to think about these things, make sure to do it smartly, and if possible, get a financial advisor that will help you think with your head and not just spends irrationally, on everything and everyone around you.