Do dreams of winning the lottery dance in your head?
Do dreams of winning the lottery dance in your head? What if you did win?
With lottery games in almost every state in the U.S., just about everyone has bought a lottery ticket at least once or twice, hoping to be that one individual who cashes in, big time. After all, a lottery ticket costs you just a buck, maybe two. Who knows? Someone wins, eventually. The Powerball lottery is a case in point. When someone wins the whole banana, that’s one newly rich person, with more money than they ever dreamed of, able to buy just about anything they might desire.
Of course, everyone knows that the odds are against them, but what the heck? Someone does win. In the Powerball lottery game, the prize may mount for weeks before someone hits that lucky combination, winning the lottery. In most cases, the person who wins the lottery is an ordinary Joe or Jane. (It’s always irksome when you read about the well-to-do person, not at all in need of money, but then winning the lottery.)
I find it rather odd when someone winning the lottery has a modest income and job, declaring that they’re just going to keep going to work, sitting on their lottery winnings like a hen on an egg. On the other hand, you read of people who win the lottery and just decide to go hog wild, spending their money like there’s no tomorrow. Just for the sake of argument, what would you do with all that money?
I remember reading a series in the San Francisco Chronicle, back in the late 1970s, which sought to follow the adventure and pitfalls of lottery winners, over a period of a couple of years. Most were ordinary people, who had never had any money to speak of, becoming suddenly wealthy beyond their wildest dreams. The temptations, inherent in having so much money, typically, in fact, in almost all cases, proved more than these winners could manage. Very few sought the advice of a financial professional.
One of the first purchases made was of expensive sports cars, clothes and jewelry. Then came an intense round of lavish partying. Money was suddenly no object. The general consensus was that this mother of all windfalls, would never run out. Oddly enough, few people went out home shopping. In those days, you could buy a three-story Victorian in a good neighborhood in San Francisco for just $30,000! Paying cash would make such a purchase the bargain of the century no interest, a rental income and a nice place to live, rent and mortgage free. Plus, this asset would appreciate tremendously over the years.
While being the penultimate extravagant and wasteful spendthrifts, most people, after winning the lottery, were quite generous with family and friends. Incidentally, most winners noted that their circle of friends became suddenly substantially larger.
In those days, people were far less aware of the tax consequences of winning the lottery. The tax man cometh. In a single blow, the government coffers swelled slightly and the winner’s bank account shrunk accordingly. To many, this was a shocking development. However, there was still a lot of money remaining.
How about a retirement fund? An education fund for their kids? Many of the younger people in this study found such mundane concerns to be far, far in the future and did not even think of such things. Likewise, the need for a professional financial advisor was not part of their plan.
So how many people stayed rich? Unbelievably, all of the interviewees were broke in two years! So what would you do, upon discovering your winning the lottery, with more money than you’d ever dreamed of having? Hire the best financial advisor money could buy, of course!
