Many Americans, for good or ill, dream of winning the lottery. All of their financial problems will be over for good, they will not have to struggle to make ends meet anymore, and they will live on a beach soaking in the sun for the rest of their lives. Right? That’s the dream, isn’t it? Then why do some lottery winners end up divorced, broke, and depressed after winning the lottery? While money does not buy happiness, it can at least reduce stress, right? Maybe not.
Lottery Winners Declare Bankruptcy at a Higher Rate Than
This is actually true. Lottery winners are more likely to declare bankruptcy within the first three to five years of winning than the general public. Why though? Well, you have individuals who are used to worrying about money suddenly thinking that they will never have to worry about money again. This is wrong. The more you buy, the more money you need to insure and keep up the stuff. So you are not just spending $300,000 on a new car. You are spending $300,000 plus insurance costs, plus maintenance, and everything else.
Folks who win this money are not always good at organizing their finances for the long term. They may not be interested in investing the money or turning it into a business venture. When they do turn it into a business venture, they may not be prepared to actually start the business. They are suddenly thrust into the top 1% of earners but lack the resources to ensure that money turns into more money.
So, winning the lottery has become a risk factor for divorce, bankruptcy, and depression.
Mo’ Money, Mo’ Problems
The more money you spend, the more money you have to spend. But that is not what most people who win the lottery struggle with. When you win the lottery, people come out of the woodwork to find you. Everyone you know has financial problems, and they all likely want a piece of your fortune. Your relationships with friends and family change irrevocably after the win.
Folks who get a lot of money out of nowhere do not necessarily know how to manage it properly. If you buy a home, you incur property taxes, maintenance costs, utility expenditures, and luxury taxes. It is not about getting a chunk of cash. It is about maintaining an income indefinitely that can support all of the purchases you recently made. That $4 million may not be enough to purchase a home and continue to own it indefinitely. That is why many lottery winners go broke, and many destroy their lives. They inadvertently assume that they no longer have responsibilities. Those who inherit money often face similar fates.
Talk to an Indiana Bankruptcy Attorney Today
Win the lottery? You may need a bankruptcy attorney. Call the Indiana bankruptcy lawyers at Chris Arrington today, and we can begin discussing your options immediately.