Advice For Lottery Winners

Posted on March 15th, 2009

Winning the lottery can either be a blessing or a curse depending whether that lottery winner is prepared to handle large sums of money. Stories of big lottery winners being broke within a short period of time. Winning the lottery can pose many financial challenges to people unaccustomed to handling large sums of money.

What happens to lottery winners?  Lottery winners can find themselves overwhelmed by requests for loans from family members and some lottery winners have faced lawsuits from ex wives or girlfriends seeking a percentage of the lottery winnings. There are more than enough tragic stories about lottery winners but the story of brad Duke of Idaho could serve as a shining example to future lottery winners. Mr. Duke won a $220 Powerball jackpot and his first act was to assemble a team of financial advisors. Mr. Duke wished to invest a large portion of his winnings with the eventual goal of becoming a billionaire.

Here is what Mr. Duke did with his winnings— $45 million: Safe, low-risk investments such as municipal bonds $35 million: Aggressive investments like oil and gas and real estate $1.3 million: A family foundation $63,000: A trip to Tahiti with 17 friends $125,000: Mortgage retired on his 1,400-square-foot house $125,000: Mortgage retired on his 1,400-square-foot house $65,000: New bicycles, including a $12,000 BMC road bike $14,500: A used black VW Jetta $12,000: Annual gift to each family member Winning the lottery and managing the money can be a real challenge but Mr. Duke while being generous to his friends and family has invested wisely with a secure future in mind.

Note the story of  this big lottery winner bought a used Jetta instead of a flashy and expensive new car. Giving a new lottery winner advice can be challenging. Most lottery winners have a tendency to go on a spending spree with sometimes disastrous results. Lottery winners should immediately seek the advice of a competent financial planner or money manager. Winning the lottery can cause some people to spend unwisely and many lottery winners find themselves broke within a few years wondering what happened.

There are even firms that specialize in lottery winner advice and winners should seek these firms out before going on a spending spree. Winning the lottery does not have to end up in tragedy, use common sense, and seek out the advice of a successful money manager who has a track record of success.