How to Blow Through a Large Windfall

by Justin Weinger on March 11, 2007

I decided to write this post the Friday of the huge Mega Millions lotto drawing, when the jackpot had reached a record $370 million.  Unfortunately, I just never got around to publishing it, so you’ll have to excuse the tardiness of everything.  That being said, some lotto somewhere is going to increase in size and stir up excitement, so I guess this post will always be applicable.

As I’m sure you already know from reading some of my previous posts, I’m not really a big fan of the lotto.  Essentially, I think your money is much better served elsewhere and in the end you’re going to come out ahead of if you just realize that you’re probably not going to hold the 1 in 175 million winning lotto ticket.

As I was following the buzz surrounding the largest jackpot in America, I came across an interesting article that talked about how and why so many people who win the lotto, receive a large inheritance or come into a windfall seem to find ways to blow through the money and end up penniless.

In the article, there was a very interesting and telling quote by Brian Jones, author of Getting Started: The Financial Guide for a Younger Generation.  In talking about how people who receive multi-million dollars yet end up in bankruptcy, Jones says, “You have to work hard to spend that kind of money.  Mike Tyson managed to, but you have to work really hard.”

It seems that the cause for many people losing their fast arriving fortunes is that they fail to get sound financial and legal advice.  Instead of hiring qualified accountants, lawyers and financial planners, many people feel they can forego these necessities and manage on their own.  I’ve always found this a bit perplexing; if you have the money to hire these qualified people, why skimp out and risk everything?

Anyway, I guess what I’m trying to get at is no matter how much money you come into, whether it’s ten thousand or ten million, do everything you can to make sure that’s it’s properly managed – even if it means hiring professionals to do the work for you.

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