Wanczyk of Chicopee, Massachusetts, ignored much of the advice that financial experts typically give to lottery winners. She quit her job, spoke with the press and took her winnings as a lump sum. While she may be able to afford to break the rules, most winners can't.
Lottery winners are more likely to declare bankruptcy within three to five years than the average American. What's more, studies have shown that winning the lottery does not necessarily make you happier or healthier. Economist Jay L. Zagorsky agrees with the research.
He writes for U. News and World Report : "Studies found that instead of getting people out of financial trouble, winning the lottery got people into more trouble, since bankruptcy rates soared for lottery winners three to five years after winning. Harrell was charitable with his millions and purchased homes for himself and family members, and donated generously to his local church. Unlike other people on this list, Whittaker was no stranger to managing a multimillion-dollar bank balance and began organising extravagent donations and investments.
But luck wasn't on his side for long. The Virginia native claims he was robbed multiple times in the early s and three of his family members tragically died in just five years.
As his personal life spun out of control, Whittaker failed to pay his debts and declared bankruptcy by According to TIME, he told reporters that he wished he'd torn his ticket up. Read more: the stolen treasures waiting to be recovered. Do you want to comment on this article? You need to be signed in for this feature.
Lottery winners who blew the lot Gallery View. Expand View. A family acquaintance called Freya Pearson scammed the unfortunate prizewinner out of her winnings, leaving the trusting Wilson with nothing.
Pearson was sentenced to five years in prison for her crime. The hapless drug dealer was caught, and on top of losing his money Music Jr was sentenced to 21 years in prison in April The supermarket checkout girl from Cumbria ditched her job and splurged on cosmetic surgery, drug-fuelled nights out, holidays and gifts.
After failing to pay the money back, she was sued for the missing amount, which plunged her further into the red.
But all was not well in the relationship. Ibi had two 'secret' sons from previous relationships and gifted them the bulk of the winnings. When Joseph found out in July , he killed his wife by injecting her with a cocktail of lethal drugs.
The former gynaecologist served seven years in prison for the crime. This guilt tripping can quickly deplete funds and leave the winner with far less than they started with.
One of the main reasons why lotto winners lose money and run into debt is due to their tax obligations. While some places will exempt lottery winnings from tax, the majority of countries will tax the prize money like any other earnings. Things get worse in the United States, where many states have their own income tax, meaning that winners will have to pay twice for the cash they won.
The biggest misunderstanding over what tax is owed comes from gifting money. This is why it is so important to get a competent tax advisor as quickly as possible. Lotto winners might be surprised by how much money they actually end up with. The vast majority of lotteries allow players to receive their prizes in different ways, like taking yearly payments for a long time or accepting a lump sum. This can leave people will a lot less money than they expected.
A psychological behavior called mental accounting impacts the way people think about their money. It essentially puts perceived value onto cash and other valuable belongings. This means that lottery winners treat the money they have won from the prize draw differently than money they have earned, despite the fact that all the cash has the same intrinsic value.
Imagine the feeling of discovering you've just won a life-changing amount of money. The happiness and excitement would be almost indescribable. This is exactly what happens to lottery winners, and often that spells disaster. Their joy makes them lose their grip on what is sensible, and they make rash decisions because they think nothing can bring them back down to earth.
They lose all sense of reality. They think they're invincible and powerful. They think they're Superman. With lottery winners who have won tens of millions of dollars, this urge to spend becomes even worse.
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