The Lotto! A Joy or a Jinx?
As I write this, someone is waking up in South Carolina to find that they are the winner of the $1.6 Billion lotto. I know one person in South Carolina (a financial planner friend of mine) and when I called him this morning (and yes, I did call him) he said that he was not the winner, and if he was, he would not have answered my call!
As we spoke about what it would mean to win that much money, the weight of what the winner will face began to sink in. I did a quick calculation and investing the after-tax lump sum and withdrawing a small percentage each year, I believe the winner could easily have a daily spending allowance of $37,000. What could we buy with $37,000 each day?
The real question is, what would $37,000 each day cost us? If you have never heard lottery winner statistics, unfortunately, they are pretty dismal. 70% of lottery winners are broke within 7 years. Several past lottery winners have died tragically or lost those close to them. Sometimes it is called the curse of the lotto and a quick internet search will show some very depressing stories.
I think the cost of $37,000 each day would include security, lawyers, accountants, financial planners, and a huge team to help keep things moving smoothly. $37,000 each day will cost us privacy, anonymity, and a quick growing list of “friends” in need. $37,000 could cost us relationships, marriages, friends, and possibly a constant barrage of unscrupulous people hoping to drag our names through the mud in an attempt to collect. If we are not careful, $37,000 can buy us a lot, but it can also cost us a lot!
If I every get to work with anyone who wins the lottery, my first advice would be to do nothing. For a period of time, do not change a single thing.Keep going to work, keep paying your bills, and keep the information QUIET. Why? It is important to protect ourselves from one of our biggest enemies – ourselves. How can we be our own worst enemy? Emotions! Whether that period of time is weeks or months, it is important to spend a good deal of time really considering what it is we would want that money to do for us. $1.6 Billion is enough to provide for generations of family members, our churches, our service organizations, our communities, and/or any other purpose we choose to serve, and if we allow ourselves to get caught up in the moment and the excitement of the win, we can easily allow ourselves to fall victim to the curse of the lotto.
Of course, after that excitement wears off and once the careful plans are laid, a new life can begin!