Many people think that winning the lottery is the best thing that could happen to them. After all, who wouldn’t want to suddenly have lots of money? Mega millions winners might assume they have financial security for life, and can stop worrying about bills and start buying new stuff. The appeal of that type of windfall is clear. No wonder so many people play the lottery.
However, matching the winning numbers might turn out to be as much of a curse as it is a blessing. An estimated one third of lottery winners later go bankrupt. Even those people who won the lottery who manage their finances effectively can find they lose out in other areas, whether that means slipping into depression or becoming estranged from family members.
The harsh truth is that there are plenty of lottery winners who have lost their money. As for the reasons why, those can be complicated.
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The Euphoric Feeling Of Winning Clouds Their Judgement
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.
"People who were little, ordinary people all of a sudden become extraordinary," says Steve Lewit, the CEO of Wealth Financial Group. "They're euphoric. They lose all sense of reality. They think they're invincible and powerful. They think they're Superman."
They Spend Uncontrollably On Things They Don’t Need
The easiest trap to fall into after receiving a big cash windfall is to start spending on things you don’t need. With lottery winners who have won tens of millions of dollars, this urge to spend becomes even worse. It's not uncommon for winners to blow cash on extravagant items like luxury cars or gadget-filled mansions. While each individual purchase may not put a dent in the overall bank balance, they can quickly add up if the winners don’t keep a close eye on what they are spending.
Bigger Homes And Fancier Vehicles Mean More Bills
A lottery winner often wants to move into a larger, more luxurious house and upgrade their car. They might even buy a yacht or other lavish vehicle. However, they may fail to consider the fact that these trappings will naturally incur bigger bills.
Regular charges like utilities will rise in price due to the larger home, while that sports car will need a costly insurance policy. When a lottery winner overlooks these types of expenses, they can quickly lose control of their budget.
They Make Bad Investments Trying To Earn More Money
Not wanting to lose their winnings like so many others, many individuals seek to invest their funds to earn extra income. Unfortunately, too many lottery winners don’t put the proper research into these investments or don’t properly understand how they work. Their acquaintances might even take advantage of them by getting them to invest in their own business ideas or companies. This leaves them open to losing large amounts of money.