If you win the lottery, you have an amazing opportunity to change your life forever. But if you’re not careful, that newfound wealth could be the source of a lot of pain. Sadly, the vast majority of lottery winners lose most or all of their winnings within five years or less.
One of the biggest mistakes lottery winners make is assuming their money will never run out, so they spend recklessly and give away everything they have. This led to a lot of bad decisions like Evelyn Adams, who won two multimillion dollar jackpots in the 80’s, but ended up losing her entire fortune due to excessive gambling and spending. She even blew her winnings by buying a trailer and living in it.
A big part of the problem is that many people do not understand finance or how to manage their money. The best thing that a lottery winner can do is to learn about finances and how to manage their money, because it’s not as easy as just throwing around millions of dollars.
Another mistake that lottery winners often make is flaunting their newfound wealth, which can lead to problems with friends and family. This also opens the door to jealousy from those who did not win, which can end up costing them a lot of money in the long run.
Some state laws require that lottery winners make their name public and give interviews or press conferences. However, if you want to protect your privacy, you can hide your winnings by changing your phone number and setting up a P.O. box to receive your winnings, and by forming a blind trust through an attorney. You can also invest your money in short term U.S. Treasury securities until you’re ready to make more concrete investing decisions.