You won! It’s two words that might get your heart beating faster and the excitement level in your body flowing. First, it depends on what it is that you have won. If it’s a small trinket, your excitement level is going to be much lower than if you hit the jackpot in a sweepstakes. Winning can be the worst-case scenario when winners don’t manage their winnings in the proper way. Learn from the mistakes of others, so that their winning worst-case scenarios don’t become your own.
Self Money Management
One of the biggest mistakes that lottery and sweepstakes winners tend to make is trying to manage their money on their own. The problem is that the winning is usually more money than the individual has seen in their lifetime, let alone at one time. Without the experience to invest, manage the spending of the money, and using the money where necessary to pay down and pay off debts, the winner often winds up bankrupt, penniless, or both.
A prime example is William “Bud” Post. Post won $16.2 million in the lottery. Some of his siblings convinced Post to invest in a car business and a restaurant. Both ventures failed. Within a year, Post was in $1 million in debt, declared bankruptcy and was living on his social security checks and food stamps.
Fraudsters Come out of the Woodworks
When people win the lottery or major sweepstakes, their name makes it on every mailing list, calling list, and email list out there. While some of the people that contact winners are reputable, many are fraudsters and shucksters. Any time people are investing money into a business, a stock, bond, mutual fund or anything else, they need to do their homework.
If you win a large sum of money, you need to make sure you understand who your money is going to, what it will be used for and how you can benefit from the investment. In some cases, it is even members of your own family that will try to rip you off for your winnings.
Nobody knows this better than Andrew Jackson “Jack” Whittaker. He won the Powerball in December of 2002 when he won $314.9 million. Jack used this money to build several churches, and even started a foundation for the less fortunate. One night, at a strip club, Whittaker was robbed of $500,000. Whittaker paid his granddaughter $2,100 per week as an allowance. His granddaughter used the majority of this money to fund her drug habit and wound up dead from a drug overdose.
Target for Lawsuits
We already live in a litigious society. It seems to worsen when being the winner of money. People know you have money and look for any excuse in the book to sue so they can take a piece of the pie.
After winning the Florida lottery, one man in Central Florida was hit with three paternity suits in a few months time. Remember William “Bud” Post who the won $16.2 million in the Pennsylvania lottery? After he won, one of his former girlfriends sued him for a share of his lottery winnings. She won and carted off a good portion of Post’s winnings. Some of these lawsuits force the winners to declare bankruptcy because they no longer have any money to live.
Ends Marriages
When spouses have to deal with a large sum of money, it tends to cause squabbles and arguments. One of the top reasons for divorce is fighting over money and financial matters. Having a landfall of money doesn’t seem to make the divorce problem disappear, but on the contrary tends to amplify the problem.
Andrew Jackson “Jack” Whittaker is a case in point. In addition to losing his money to building churches, foundations and funding his granddaughter’s drug overdose, Whittaker also found himself with divorce papers from his longtime wife.
It can be hard to believe that winning the lottery or winning a cash sweepstakes could wind up being a bad thing. People think that money solves problems. Others believe that money is the root of all evil and simply leads to more problems and bigger problems. If you win a lot of money, don’t let yours be a worst-case-scenario.
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