I heard on the news this morning that someone stepped forward to claim a 1.5 billion prize that had been won last September in a state on the East Coast.
No one knows whether it was a man or a woman because in that state prizewinners are allowed to remain anonymous. And this person or persons has chosen to remain anonymous.
There was a lot of speculation about why the winner hadn't stepped forward. One person suggested the winner had become so excited that they had a heart attack and died when they realized they had won. Someone else said the person probably was drunk when they selected the ticket and lost it. The theories went on and on. And any one of them could have been possible.
My own theory is that the winner behaved very wisely. They probably surrounded themselves with attorneys and financial advisors to help them decide what to do with the windfall. One thing that the authorities in that state did reveal was that the person elected to take the cash option, which amounted to something like $878 million after taxes.
This person's behavior indicates that he or she will probably be one of the winners who successfully live with their windfall. Because statistics show that something like 70% of lottery winners goes bankrupt 5 to 7 years after they win.
And there are all kinds of reasons why they end up bankrupt. Some of them go on spending sprees, living as if the money will never run out. Others become drug addicts or alcoholics. Still, others get ripped off by their families and friends. Others make unwise business investments. There's a wide range of reasons why people don't succeed in living with such large sums of money.
What people who win the lottery don't realize is that managing money is kind of like managing a large business. And those who manage a large business successfully realize that there's a lot of planning about how the money is to be spent and invested. And those managers who don't make wise decisions can bankrupt the company. And lottery winners who don't manage their sudden gains wisely end up right back where they started and sometimes even worse.
Instead of money solving the problems they think they have, the money itself becomes a problem. And more than once we read about lottery winners who say they wish they had never bought the winning ticket.
I believe that those who succeed as lottery winners are those who realize that they entered territory that they've never been in before. And, as such, they realize that they need to seek advice before they get their hands on the money.
And, as for me, I don't buy lottery tickets because I won the lottery 28 years ago the day I got sober.
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