Experts warn lotto winners about going broke after a win
With the $120 million lottery prize winner announced on Thursday night, a financial expert has revealed a sobering statistic.
“Most lotto winners actually go broke within a couple of years,” Adele Martin, a certified financial planner, said in news.com.au’s ‘I’ve Got News For You’ podcast.
Speaking to podcast host Andrew Bucklow, she added: That’s all around the world, not just in Australia.
“And that’s because, you know, if you’re not good at managing $100,000, you aren’t going to magically be better at managing $120 million.
“It’s the same principles, just more zeros.”
Mr Bucklow delved into that scary fact and it didn’t take long to discover some tragic cases of past lottery winners.
Amy McCauley, who was a bus driver in New York, won US$15 million (A$20 million) in the 1990s. After the win, she was besieged by friends and family members asking for money. In the end, she fell out with two of her brothers, ditched most of her so-called friends, and moved to a town where no one knew her.
UK-based Jane Park won £1 million ($1.87 million) when she was just 17 years old. She bought an apartment, two cars, splashed out on clothes and went on a number of holidays. But she later, said the win made her lonely and miserable.
In an even more extreme case, British woman Callie Rogers won £1.9 million (A$3.56 million) when she was 16. She gave away half of the money to friends and family, then spent a further £300,000 on clothes and got three boob jobs.
Abraham Shakespeare was 40 years old when he won US$30 million (A$41 million) in the US in 2006. He was befriended by a woman named Dee Dee Moore. She was convicted of shooting and killing Shakespeare and hiding his body under a concrete slab in her backyard.
However, it doesn’t always end badly.
Mr Bucklow spoke to a Western Australian gym owner who turned $5 into $80 million in December last year.
She spent just $5 on a lottery ticket with a syndicate with another 54 other women from her gym. They got lucky and each took home $1.45 million.
“I haven’t had barely anyone who’s asked for cash. I’ve given a little bit to family to help I’ve helped my children out but not one person has come out of the woodwork that you weren’t expecting to ask for money so it’s been great in that way.”
She revealed she still runs the gym, working 12 hours a day six days a week.
The group of gym-goers have entered again into tonight’s $120 million lottery, partly for the sake of those who missed out on entering the syndicate last time.
As for how to avoid going broke after a big win, finance guru Ms Martin had a word of advice.
If you win the lottery “the first thing you should do is to keep calm and carry on, which I know is easier said than done,” she advises.