Have you watched the fantastic TLC realty show The Lottery Changed My Life? The show visits a variety of lottery winners including a janitor, truckers, and a team of Midwestern lunch ladies. The show interviewed them about what it was like to win big and strike it rich.
Some spent the money on toys like cars, motorcycles and spa treatments. The young British woman spoiled her sister by paying for her breast enlargement. One family started a foundation in their late son’s honor that helps families dealing with pediatric cancer pay their bills. When it came to the lunch ladies, most were still serving up food at a local school and living very modestly. I was a little surprised that pretty much everyone they featured on the show seemed to have been responsible with their money. Perhaps most heartwarming is the winner who used his money to become a Hollywood producer, then adopted five children orphaned by a tragic accident.
But for some, the incredible wealth they obtained overnight was quickly squandered and actually lead them to financial ruin. According to financial experts, 70% of lottery winners squander their money within a few years. Many winners experience broken families and friendships that are torn apart by the sudden rush of money. Statistics also show that there is a 90% chance that the money will be gone by the third generation. Most lottery winners are know nothing about wealth management, and unfortunately many are naive about even the basics of sound financial planning.
The incredible shock and euphoria of becoming an instant millionaire leaves them very susceptible to questionable investments and especially con-men. In fact, lottery winners are such popular targets for fraudulent schemes that most lottery boards recommend that they immediately change their phone number to an unlisted one. Ironically, lotteries also refuse to let winners remain anonymous for both publicity and public accountability reasons, so they are certainly not hard for the bad guys to find.
If The Lottery Changed My Life has you excited about becoming the next instant millionaire, remember that the odds of that happening are so astronomically small that the chances of few events on Earth even compare. If you do play the lottery, consider it entertainment and not an investment. Use money you would otherwise spend on other fun things and absolutely never spend a dollar that you can’t afford to lose. Alternatively, there are some great free online lotteries that provide much of the same entertainment without the cost. Good luck!