Many people dream of winning the lottery, so it is perhaps ironic that many people end up with little to show for their winnings. Statistics from The likes of the National Endowment for Financial Education, show that anywhere from 30% to 50% of lottery winners, declare bankruptcy within just 3-5 years of hitting the jackpot.
What is the biggest reasons for these stats? Apparently, the biggest “culprits” are:
- Giving too much money away to friends and family
- Not planning how to use the money
- Not investing the money wisely
- Quitting a primary job, so there is no fresh cash coming in, making investing the money wisely even more important than it otherwise would be.
- Sometimes divorce and breakups
- It can complicate tax obligations in some countries
- The euphoria of the win can cloud people’s judgement for years.
They aren’t alone in earning a lot, but going broke. In fact, they have some other high-earners “beat”. 78% of former NFL players are said to go bust or are struggling financially within 5 years of retirement according to sports illustrated
It puts a new meaning to the expression, if you fail to plan, you plan to fail.