Big winners share lessons, risks of Powerball win
COLUMBIA, Mo. (AP) - So you just won the $550 million Powerball jackpot, the second highest in lottery history. Now what?
Perhaps it's time for a tropical vacation or a new car. There are bills to pay, loans to settle, debts to square.
Past winners of mega-lottery drawings and financial planners have some more sound advice: Stick to a budget, invest wisely, learn to say no and be prepared to lose friends while riding an emotional roller-coaster of joy, anxiety, guilt and distrust.
"I had to adapt to this new life, "said Sandra Hayes, 52, a former child services social worker who split a $224 million Powerball jackpot with a dozen co-workers in 2006, collecting a lump sum she said was in excess of $6 million after taxes. "I had to endure the greed and the need that people have, trying to get you to release your money to them. That caused a lot of emotional pain. These are people who you've loved deep down, and they're turning into vampires trying to suck the life out of me."
The single mother kept her job with the state of Missouri for another month and immediately used her winnings to pay off an estimated $100,000 in student loans and a $70,000 mortgage. She spent a week in Hawaii and bought a new Lexus, but six years later still shops at discount stores and lives on a fixed income - albeit, at a higher monthly allowance than when she brought home paychecks of less than $500 a week.
"I know a lot of people who won the lottery and are broke today," she said. "If you're not disciplined, you will go broke. I don't care how much money you have."
Lottery agencies are keen to show off beaming prize-winners hugging oversize checks at celebratory news conferences, but the tales of big lottery winners who wind up in financial ruin, despair or both are increasingly common.
There's the two-time New Jersey lottery winner who squandered her $5.4 million fortune. A West Virginia man who won $315 million a decade ago on Christmas later said the windfall was to blame for his granddaughter's fatal drug overdose, his divorce, hundreds of lawsuits and an absence of true friends.
The National Endowment for Financial Education cautions those who receive a financial windfall - whether from lottery winnings, divorce settlements, cashed-out stock options or family inheritances - to plan for their psychological needs as well as their financial strategies. The Denver-based nonprofit estimates that as many as 70 percent of people who land sudden windfalls lose that money within several years.
"Being able to manage your emotions before you do anything sudden is one of the biggest things," said endowment spokesman Paul Golden. "If you've never had the comfort of financial security before, if you were really eking out a living from paycheck to paycheck, if you've never managed money before, it can be really confusing. There's this false belief that no matter what you do, you're never going to worry about money again."
David Gehle, who spent 20 years at a Nebraska meatpacking plant before he and seven ConAgra Foods co-workers won a $365 million Powerball jackpot in 2006, used some of his winnings to visit Australia, New Guinea and Vietnam. He left ConAgra three weeks after he won, and now spends his time woodworking and playing racquetball, tennis and golf.
But most of his winnings are invested, and the 59-year-old still lives in his native Lincoln. He waited for several years before buying a $450,000 home in a tidy neighborhood on the southern edge of town.
"My roots are in Nebraska, and I'm not all that much different now than I was before," Gehle said. "I'm pretty normal. I never was the kind of guy who went for big, expensive cars or anything like that. I just want something that runs."
In the first year after he won, Michael Terpstra would awaken many nights in a panic. Had he slept in? Was he late to work the night shift?
"At times I'd wake up and this would all seem like a dream," the 54-year-old said. "I'd have to walk around the house and tell myself, I did win. I'm not working anymore, and I do live here. I didn't get drunk, break into someone's house and go to sleep. This is where I'm supposed to be."
His new home is a roomy, two-story house in south Lincoln with a big-screen television and paintings of Jesus on the walls. He no longer uses alarm clocks and spends his days taking his 92-pound black lab, Rocco, on walks.
He was terrified when he first won, convinced that he would lose all of the money and have to return to work. So he lives carefully off the interest from conservative investments, with help from accountants and lawyers. He bought the new house and a truck, but struggles to name any extravagant purchases.
"I can't buy a super yacht. I can't buy a Gulfstream," he said. "Then again, I don't think I'd use either one, so why would I buy one?"
That said, some mega-winners still can't resist the lure of big jackpots, at least not the two-buck chances. On Tuesday, former ConAgra worker Dung Tran, a Vietnamese immigrant, walked into the same Lincoln U-Stop where he purchased the winning ticket six years ago and bought 22 more from the very employee who sold him the first prize-winner, said cashier Janice Mitzner.
"We joked about it," she said. "I told him, 'Wouldn't it be something if you won again?'"
Hayes is also hoping to strike rich again - she bought 10 tickets at a Dirt Cheap liquor store on her way home Tuesday while speaking with an Associated Press reporter. Unlike many big winners, she has kept a visible public profile instead of going underground, appearing on a 2007 reality TV show ("Million Dollar Christmas"), writing an online Life After the Lottery blog and self-publishing a short book, "How Winning the Lottery Changed My Life."
"We have this drawing tomorrow, and if somebody wins, God bless them," she said. "They're going to need those blessings."
Perhaps it's time for a tropical vacation or a new car. There are bills to pay, loans to settle, debts to square.
Past winners of mega-lottery drawings and financial planners have some more sound advice: Stick to a budget, invest wisely, learn to say no and be prepared to lose friends while riding an emotional roller-coaster of joy, anxiety, guilt and distrust.
"I had to adapt to this new life, "said Sandra Hayes, 52, a former child services social worker who split a $224 million Powerball jackpot with a dozen co-workers in 2006, collecting a lump sum she said was in excess of $6 million after taxes. "I had to endure the greed and the need that people have, trying to get you to release your money to them. That caused a lot of emotional pain. These are people who you've loved deep down, and they're turning into vampires trying to suck the life out of me."
The single mother kept her job with the state of Missouri for another month and immediately used her winnings to pay off an estimated $100,000 in student loans and a $70,000 mortgage. She spent a week in Hawaii and bought a new Lexus, but six years later still shops at discount stores and lives on a fixed income - albeit, at a higher monthly allowance than when she brought home paychecks of less than $500 a week.
"I know a lot of people who won the lottery and are broke today," she said. "If you're not disciplined, you will go broke. I don't care how much money you have."
Lottery agencies are keen to show off beaming prize-winners hugging oversize checks at celebratory news conferences, but the tales of big lottery winners who wind up in financial ruin, despair or both are increasingly common.
There's the two-time New Jersey lottery winner who squandered her $5.4 million fortune. A West Virginia man who won $315 million a decade ago on Christmas later said the windfall was to blame for his granddaughter's fatal drug overdose, his divorce, hundreds of lawsuits and an absence of true friends.
The National Endowment for Financial Education cautions those who receive a financial windfall - whether from lottery winnings, divorce settlements, cashed-out stock options or family inheritances - to plan for their psychological needs as well as their financial strategies. The Denver-based nonprofit estimates that as many as 70 percent of people who land sudden windfalls lose that money within several years.
"Being able to manage your emotions before you do anything sudden is one of the biggest things," said endowment spokesman Paul Golden. "If you've never had the comfort of financial security before, if you were really eking out a living from paycheck to paycheck, if you've never managed money before, it can be really confusing. There's this false belief that no matter what you do, you're never going to worry about money again."
David Gehle, who spent 20 years at a Nebraska meatpacking plant before he and seven ConAgra Foods co-workers won a $365 million Powerball jackpot in 2006, used some of his winnings to visit Australia, New Guinea and Vietnam. He left ConAgra three weeks after he won, and now spends his time woodworking and playing racquetball, tennis and golf.
But most of his winnings are invested, and the 59-year-old still lives in his native Lincoln. He waited for several years before buying a $450,000 home in a tidy neighborhood on the southern edge of town.
"My roots are in Nebraska, and I'm not all that much different now than I was before," Gehle said. "I'm pretty normal. I never was the kind of guy who went for big, expensive cars or anything like that. I just want something that runs."
In the first year after he won, Michael Terpstra would awaken many nights in a panic. Had he slept in? Was he late to work the night shift?
"At times I'd wake up and this would all seem like a dream," the 54-year-old said. "I'd have to walk around the house and tell myself, I did win. I'm not working anymore, and I do live here. I didn't get drunk, break into someone's house and go to sleep. This is where I'm supposed to be."
His new home is a roomy, two-story house in south Lincoln with a big-screen television and paintings of Jesus on the walls. He no longer uses alarm clocks and spends his days taking his 92-pound black lab, Rocco, on walks.
He was terrified when he first won, convinced that he would lose all of the money and have to return to work. So he lives carefully off the interest from conservative investments, with help from accountants and lawyers. He bought the new house and a truck, but struggles to name any extravagant purchases.
"I can't buy a super yacht. I can't buy a Gulfstream," he said. "Then again, I don't think I'd use either one, so why would I buy one?"
That said, some mega-winners still can't resist the lure of big jackpots, at least not the two-buck chances. On Tuesday, former ConAgra worker Dung Tran, a Vietnamese immigrant, walked into the same Lincoln U-Stop where he purchased the winning ticket six years ago and bought 22 more from the very employee who sold him the first prize-winner, said cashier Janice Mitzner.
"We joked about it," she said. "I told him, 'Wouldn't it be something if you won again?'"
Hayes is also hoping to strike rich again - she bought 10 tickets at a Dirt Cheap liquor store on her way home Tuesday while speaking with an Associated Press reporter. Unlike many big winners, she has kept a visible public profile instead of going underground, appearing on a 2007 reality TV show ("Million Dollar Christmas"), writing an online Life After the Lottery blog and self-publishing a short book, "How Winning the Lottery Changed My Life."
"We have this drawing tomorrow, and if somebody wins, God bless them," she said. "They're going to need those blessings."
From the documentaries I've seen on tv and from articles I've read most of the people who end up broke are the same people who no matter how much money they make always manage to spend every penny of it. One thing I think would be nice is to keep the winners anonomous unless they want the information out there. It wouldn't be that difficult to deal with the money, I would just hate to have all those moochers following me around.
If you're a democrat, just turn over every last penny to the Government, after all, they know how to manage it better than anyone....right?
NO tax is small enough, more to redistribute....you really don't need it anyway.
Avoid the grief & agony...big Government awaits you donation.
 @Sydthepiper Still mad about the election results?
 @grmpyOlFrt ...not at all, just seeing if they can walk the walk....pay more than their "fair share", but I know that will not happen. Probably will find any & every loop-hole, known & unknown....even though taxes taken out upfront, they'll do anything and everything to avoid paying one .00001 cent more.....then burn all their "we are the 99% paraphernalia.
This is why I don't play the big lottery games. I don't want that kind of money and all that goes with it. Â A little bit would be nice, but you won't see me posing with a giant cardboard check anytime soon.Â
what a nightmare - is there a Lotto Winners Anonymous?Â
If I were lucky enough to win that kinda money, I'd start and run a large 'disaster rapid reaction team' charity. Most of the money would go into that, and I'd be working closely with other charities to make sure that the efforts dove-tail in with the others. That would become my job (not that I don't love what I do, but something like that is far more important than a mere job). There's a lot of things that need done in major disasters that needs done right away and over the weeks, months afterwards. And there's never enough aid available to those in desperate need.
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I'd set aside enough to live comfortably as my own money, get my kids -some- money to help them get started, but not 'set them up for life' - because we all know what tends to happen when you don't have to work for what you've gotten..., get my mom and mother in law taken care of properly in thier old age and not spend money recklessly (I've learned that lesson years ago).
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Now of course to do all that I'd have to win the lottery first. Oh - and actually buy lottery tickets too. I'm not foolish enough to spend anything more than an occasional 'entertainment value' dollar here and there on the lottery.
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there is something to be said...'fools and their money are quickly separated' the rule of any lotto winner should be 'Invest wisely' a car loses value and to me means nothing but transportation - its new for a few years then its old and you got to buy the next new one...not me my cars are all upwards of ten+ years old and they work and run great!...I start with old strictly because people always hit new cars deliberately or out of spite so I no longer buy anything nice for some uninsured moron to destroy or some dirt bag thief to steal and then destroy! - my first and final new car I bought was key'd twice, and hit and run three times all in parking lots!... a boat is a money toilet your better off flushing quarters down the toilet so when it backs up you get a refund... exotic cars again a money pit nice to look at but you cannot drive it anywhere so why bother, then you have to store it, pay taxes on that etc...
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If you invest conservatively there is little reason you should go broke unless you spend stupidly thinking never ending negative deductions will never hit zero...those who know how to manage their money ie. people who still manage to have a little savings at the end of each month to save will make it work for them and prosper. I'm sure my wife and I would be fine as all the help for us would be for her parents and brother, my parents brother and sister would get a small piece of it and not a steady stream of money... I'd make what's left work for me and work some job I enjoy and not worry about what it pays me... oh the stress freedom would be bliss!
"If you're not disciplined, you will go broke. I don't care how much money you have."
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A lesson the Federal government should learn.
 @Rider But they will never learn it, because a) it's not their money, and b) they think they can always print or take more. But, yes, it IS a lesson they should take to heart.
While it may sound cynical I would enjoy telling off the leeches and vampires when they come a begging. Mostly I would ask "Where the heck were you when I needed help?" I am not sure of what I would do with the winnings other than get out of debt and buy a house somewhere. Maybe a restored old Chevy pickup truck too. I do not like the new ones as they have far too much plumbing and garbage under the hood.
I will not worry much about it until if and when I win. Until then I have a two dollar ticket worth two dollars worth of dreams.
I have always wanted to do a Percy Ross thing, helping many people in small ways, a new dryer, a wheelchair ramp, etc.Â
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But I don't play the lottery, and my mother's nursing home care is going to leave my father broke. So I just trudge to work and I can give people smiles for free.Â
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The problem with fancy possessions is it costs money to maintain all that stuff. It would be nice to have a new car for once though.
Some people just aren't smart enough to handle that kind of money or living with that kind of fortune. Â Sometimes you just can't fix stupid.
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It starts when you know you have the winning ticket, be quiet! Â You wouldn't see my face all over the news and I wouldn't tell anyone.Â
 @oledawg Most of the people who are broke when they win a big windfall are broke for a reason - they don't have the smarts / education / self-discipline / whatever to earn decent money, keep it, and make it work for them, so the crash-and-burn spectacularly. If a self-made millionaire wins a lottery, they'd likely put it to work and do fine, because they already have the money-management skills.
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If I won, there would be a couple of educational non-profits set up, the tax man would get narry a cent, and a lot of average folks would get helped and have some fun adventures while we'd be secure and have some fun.
Stick some of it in an investment that guarantees in income of about 200k each year for life, with no way of withdrawing more money from it. At least then if I go crazy with the rest of the cash and spend it all I will live comfortably.
 @therunner but then you'd have all that money left over when you were dead. Where is the fun in that?  I think a balance between the two would be great.  Don't be a fool and build a bowling alley in your 10k sq ft mansion, but don't live like a manager at Best Buy, either. Â
Your whole family tree will be altered ........ is this a curse? I think it is.
There are two types of people out there those who have money and know how to make it work for them. Then there are those who are a slave to it and squander it because they do not know how to master it. it is a trial in life I would love to have to see what type of person I am?
I'll risk it.
I'm thinking those are risks I would be willing to take.
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 @deadcandance I wouldn't want to win more than a few million. Seriously.  Just enough to pay off some bills, buy a home, do a few nice things for family.  No way I'd want the life-altering freak show that you get with the 10 million+ wins. Â
@deadcandance - If one was to actually win that kind of money, one would need to immediately put lawyers between yourself and the 'outside world', and a physical barrier (actual gates, etc, or security guards) if needed to prevent the leeches from coming to your door.   That and an unlisted phone number.
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'Course - close family and close friends would be exempt from the firewall of lawyers - but with an eye out for 'leech' behaviors....Â
@FormerMarineSgt Have you seen how family members can behave over an inheritance? Money changes everything and sometimes family members are the worst offenders.