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Curse of the lottery: Tragic stories of big jackpot winners


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Lottery winners often blow the money and come to bad ends. They're already super self-selected to be familiar with high-risk behaviors (not least gambling) and not big believers in statistics. Based on my extensive research, I can also say they tend to have really bad taste in furniture.

I have to admit the cat sculpture above is pretty fly. 

But you make a good point. 

From The Atlantic article, winning the lottery does not prevent a person from going bankrupt:

And how do winners manage their finances? The narrative of the short-sighted lottery winner existed as far back as the 1970s. There is indeed some data to back that up. A Camelot survey found that the most popular things Brits spent their winnings on were relatively flashy—properties, cars, and vacations. Similarly, an oft-quoted study of 35,000 lottery winners in Florida found that 1,900 winners filed for bankruptcy within five years—and that while the large infusion of cash reduced the probability of bankruptcy during the first two years of winning, it increased the odds of bankruptcy three to five years out. (However, the researchers only tracked down people who had won $150,000 or less, and these bankruptcy numbers might change with higher sums.) As for the long term, research regarding an 1832 land lottery in Georgia found that the descendants of those winners did not go on to be wealthier after a few generations.

Winners often worry that they will be flooded with requests for money from family and friends, and though there aren’t hard numbers on this, the Camelot survey found that all winners combined had spent over £1 billion on family and friends—a significant amount as that’s 14 percent of the group’s £8.4 billion winnings (investment in their children exceeded this amount). One thing has changed since the 1980s though: Lottery players are increasingly (and disproportionately) from low-income households (though a jackpot of over $800 million gets rich people playing too), and may have less personal-finance knowledge, particularly when it comes to dealing with large sums of money. In the U.K., the National Lottery actually sends legal and financial experts to the homes lottery winners of over £500,000 to offer financial planning advice.

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