$120 million Powerball draw: Expert warning after most lotto winners go bankrupt after a few years
Aussies are scouring for the $120m lottery draw tonight – but past winners have dire warnings.
Hours before the $120 million lottery prize was announced for Thursday night, a financial expert has revealed a sobering statistic.
“Most lotto winners go bankrupt within a few years,” said Adele Martin, a certified financial planner, on news.com.au’s “I’ve Got News For You” podcast.
Speaking to podcast host Andrew Bucklow, she added: It’s all over the world, not just Australia.
“And that’s because, you know, if you’re not good at managing $100,000, you won’t be magically better at managing $120 million.
“It’s the same principles, just more zeros.”
Mr. Bucklow looked into this chilling fact and it didn’t take long to uncover tragic cases of former lottery winners.
Amy McCauley was a bus driver in New York who made US$15 million (A$20 million) in the 1990s.
After the victory, she was besieged by friends and family members demanding money. In the end, she fell out with two of her abandoned brothers, most of her so-called friends, and moved to a town where no one knew her.
Jane Park £1 million ($1.87 million) in the UK when she was just 17 years old.
She bought an apartment, two cars splashed clothes and went on vacation. But she later said the victory left her feeling lonely and miserable.
In an even more extreme case, Britain’s Callie Rogers won £1.9m (A$3.56m) when she was just 16.
She gave half the money to friends and family, then spent another £300,000 on clothes and got three jobs.
But now, 19 years later, she is completely broke and relying on government payments. She tried to kill herself several times.
A man actually lost his life because of his lottery win.
Abraham Shakespeare was 40 when he won US$30 million (A$41 million) in the United States in 2006. He befriended a woman named Dee Dee Moore.
She was convicted of shooting and killing Shakespeare and hiding his body under a concrete slab in her garden.
But it doesn’t always end badly.
Mr Bucklow spoke to Sue*, a Western Australian gym owner who turned $5 into $80million in December last year.
She spent just $5 on a lottery ticket with a syndicate of 54 other women from her gym.
They were lucky and each won $1.45 million.
“You always hear about lotto winners saying that when you win a lot of money, a lot of people come out of the woodwork, family members, friends and ask for money. Has this happened to you?” asked the podcast host.
“No, no, not at all,” Sue replied.
“I hardly had anyone asking me for money. I gave a little bit to the family to help, I helped my kids, but nobody came out of the woodwork that you didn’t expect to ask for money, so it’s been great that way.
She revealed that she still runs the gym, working 12-hour days six days a week.
The group of gym-goers entered tonight’s $120 million lottery again, partly for the sake of those who failed to make it into the union last time out.
As for how to avoid going bankrupt after a big win, finance guru Ms. Martin had some advice.
If you win the lottery, “the first thing to do is keep calm and carry on, which I know is easier said than done,” she said.
“The reason I say that is that you don’t want to make decisions when you’re very emotional.
“Because when you’re very emotional, you don’t make decisions clearly.
“When you’re too happy, you don’t think about all the downside risks or vice versa. If you’re too sad, you don’t think of all the positive things.
“So it’s really important to try to keep as much as you can, you know, in that neutral state and not make big decisions. [until a bit later].”
* Last name withheld for confidentiality reasons