There are smart things you can do after you win the lottery, and there are dumb things you can do.
For example, if you wanted to do something smart after you won the lottery, you would either take your lottery lump sum payout, put it in an account, and let it collect interest for years. Another smart thing you could do is to accept your winnings as a lottery annuity settlement, and collect your lottery payments over the next few decades. You could use this annuity to support yourself as you pursue your passion, such as painting, or writing.
Unfortunately, though, people tend to make dumber decisions with their money. Here are just a few entertaining, but unfortunate examples.
Failing to Read the Fine Print. - Tonda Lynn, a former Waffle House waitress, was not a very nice person. She and her colleagues at the eatery said they’d split the winnings of whatever they won from the lotto tickets the patrons sometimes gave them. When Lynn one, the only thing she split was her job. Since it was only a verbal agreement, it didn’t hold up in court when her former friend sued her. However, being paranoid, she put her winnings in a corporation, and made her family 51% stakeholders. This made her eligible to pay a gift tax of $1,119,347.90 for her $10 million winnings.
Letting the Money Burn a Hole in Her Pocket. - When Suzanne Mullins won the lottery, she took her winnings as an annuity. However, the yearly payments weren’t enough to quench her shopping wants. She used her future lottery payments as collateral for a $200,000 loan, and found herself in debt. She then sold her annuity, but didn’t pay back the debt. Consequently, the loan company slapped her with a lawsuit, and won $154 million.
Doubling Down on Your Luck. - The fact that Evelyn Adams was luck was obvious. Not only did she somehow win the lottery, she won it twice, and all in the span of just two years. However, luck runs out, as she quickly found out. Wanting to ride out her lucky streak, she went to Atlantic City… and gambled her $5.4 million away. Today, she lives in a trailer park.
If you win the lottery, don’t do like these folks did. Make smart choices with your money.
If you have any questions, feel free to share in the comments.