From Gain to In Vain: Why Lottery Winners Go Broke

 

Imagine you’re seated on the hot seat at Kaun Banega Crorepati when you hear Amitabh Bachchan yell out “SATH CRORE”. You would feel elated, but imagine all that money without possessing any skill. Doesn’t that feel better? So, you pick up the winning lottery ticket (after several duds). With all the money, you would be able to indulge in lavish spending that you otherwise never would’ve thought of. You may think that this big win has set you for life, but unlike your answers at KBC, you’re wrong. The 7-crore sum is a ton of money, but it isn’t a perpetual cheque. The money runs out eventually. And it leaves you in financial ruin, worse than before you ever got the money. This isn’t a scare to stop you from trying out your luck, but many sources believe that almost 70 per cent of windfall winners eventually go bankrupt.

 

This situation is a lot like an oxymoron. Complete opposite concepts coming together: A broke lottery winner. Someone lucky enough to get so much yesterday suddenly has nothing today. Cash you find lying around, or a cashback you receive after a payment, is not life-changing. Yes, it may make you feel good, but it’s a windfall gain that can actually turn your life around. Everyone dreams of a lot of money, but people rarely know what to do when they suddenly have it all. We have glamourised money to be the answer to it all. And to some extent, that concept is true. However, using money as the solution to everything is what causes the money to run out in the first place. That leaves us stranded in this capitalist world.

 

Lottery winners haven’t grown with all that money. They don’t know what to do with the prize besides using it. First thought, cover up all prior financial issues. Second thought, buy whatever you want. That may be a dream car or this random gizmo you came across a second ago. It doesn’t matter how irrational the purchase is; now that you can afford it, you must have it. All thoughts of saving money go out the window because now shopping is entirely on impulse and the thrill of being rich. This mindset leads to comfort in a lifestyle that isn’t your own. Luxuries are the new normal. Over time, these costs add up and leave you in the financial state you were in before the big win. Maybe in an even worse state. A lottery is a one-time prize, not a generational-long payment. Eventually, it will have to end.

 

If not to spend the money, what should be done with it? The straightforward response: invest! But investing money in stocks is easier said than done for someone with very little financial literacy. We aren’t raised with knowledge of financial definitions like index funds and capital gains. Investing is definitely not something you can master overnight. The masters, financial advisors, can’t all be trusted. After all, they need to make money too. Not all settle for the standard income share or commission fees. In 2006, Abraham Shakespeare won $ 15 million. He hired a financial advisor named Dorice Moore, who took control of his bank account and began stealing from him. When Shakespeare confronted her, she murdered him. Financial illiteracy did not just cost him his money but also his life. With cases like Abraham Shakespeare, not everyone can trust someone else with their money; hence, the only solution is to be good with money themselves. But teaching yourself from scratch is hard, especially with how the trending best-selling finance books all seem to contradict each other. No matter where you search, there’s an overwhelming amount of advice, but what is genuine and what’s not? Financial illiteracy either leads to being scammed or to being intimidated from investing out of fear of being scammed.

 

It's not always you that racks up the bill. It is also the people around you. Winning so much money also means receiving a lot of attention. It is hard to keep this big win a secret as it is heavily publicised. Most wins are showcased on TV broadcasts or covered in local newspapers. With the cheques come the favours from friends and family that you have a hard time saying no to. Sudden expectations of being the provider, amongst other societal expectations, raise expenses. The fear of appearing selfish is what stops the winners from drawing boundaries.   Large sums of money also cause the reappearance of people in your life after years, asking for help. Some winners feel guilty enjoying wealth while others struggle around them. Others question if the people they meet connect with them or their money. Winning the lottery ends up becoming an emotional toll where the winners wish to lose all the money.

 

People distinguish ‘earned money’ from ‘won money’. Since a lottery win is money won, not earned, there’s less seriousness around it. There's an attitude that since it was easily attainable the first time, it will be easy to recover it. There's less attachment to the money, and people start getting reckless with it. An impulsive mentality often leads to destructive habits. People who have never gambled before suddenly turn themselves into regulars in casinos, as they don’t fear losing money anymore. But it's not just the lottery win that they’re gambling with; it's also their hard-earned money from before that they lose. Lottery, to some extent, can also be considered gambling. And since they won once, they believe they can win again, leading their gambling habits to worsen. Gambling addiction is not the only threat to financial prosperity. Addiction requires continuous spending. It not only drains the bank account but also leads the person astray. Substance abuse causes weakened thinking, where they have no concept of consequences and thus leads them to take risky decisions with their money. They become emotionally vulnerable and become victims of exploitation.

 

We’ve always been told that money can’t buy happiness. In the case of 70 per cent of lottery winners, they can’t even buy lasting wealth. Though everyone won different amounts, it was their mindset and actions that determined their financial longevity. Ralph Waldo Emerson once said, “Shallow men believe in luck or in circumstance. Strong men believe in cause and effect.” All of the lottery winners had the luck and circumstance to turn their lives around, but only 30 per cent of them caused it to give them a positive effect. Money may change a person’s circumstances overnight, but it does not suddenly give them discipline, judgment, or emotional stability. Without those, everything eventually disappears.