Everyone has heard of the lottery winner that ends up squandering away their winnings. It’s a sad tale but it actually happens more than you would think. Financial experts claim that 70% of lottery winners go broke within 7 years.

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Like Callie Rogers, who worked as a shop clerk earning $5.83 an hour before winning nearly $3 million in the National Lottery in 2003. She bought four huge homes, several new cars and a whole bunch of plastic surgery. By 2012 she had $60,000 left and had picked up work as a housekeeper. 

Or Sharon Tirbass – a single mother on welfare who won nearly $11 million. Sharon splurged on a massive house, threw a ton of fancy parties and went on a bunch of exotic trips. Less than a decade later she was back riding the bus and working part-time. 

The worst may be Evelyn Adams who won the lottery – not once, but twice! Adams won $5.4 million but apparently gambled it all away in Atlantic City and now lives in a trailer park. 


There are tons more stories just like that out there – stories of lottery winners that burned bright and then burned out.

So…what exactly should you do if you win the lottery? 


Winning the lottery is exciting and unexpected and crazy and there are so many things you are dying to do! Don’t do them. Just wait. 

Most mistakes made by people who come into a life-changing windfall are made because they feel they have to do something…anything. This is simply incorrect. The money is an unexpected luxury that now affords you time. If you win the lottery, you shouldn’t change your routine. You should keep living as normal and over time, make it a point to get yourself educated – learn about finance. 

There’s advice out there that will urge you to hire a team of financial professionals to help you. 

Sure, they’ll help you. Help you right out of your money. 

Why hire a team of people all looking to score a piece of your wealth? At the very least, make sure you don’t allow anyone to make decisions concerning your wealth without fully understanding what is transpiring. Educating yourself is so important. You want and need to know exactly what is happening, even (especially) if someone else is doing it for you.

Just park it in a savings account and don’t touch it. The one thing you can do, however, is pay off any debts you have, breathe that sigh of sweet relief, and then go back to not touching it.

You won the lottery and you want to shout it from the rooftop. Don’t do this. Actually, don’t tell anyone.

Seriously, zip it. Don’t tell a soul about the sudden windfall. Of course you will share it with your spouse, but it’s best to keep it from other family or friends. Once it becomes public knowledge, too many people will cozy right up to you and it will become both confusing and frustrating.

If you have the option to keep your name private as a lottery winner, do it. You don’t want your face plastered on the news giving every Tom, Dick and Harry in your town permission to approach you.


Open a trust. Put lottery winnings in there.

Fight the urge to write your name on that lottery ticket. This is going to go a long way towards helping you keep your win quiet. Lottery commissions will gladly publicize the identity of winners if you don’t take steps to fight it.

Hire an attorney who will open a blind trust in order to claim your winnings as an anonymous trustee. All communication should take place through your lawyer and no one will know who the winner is. 

Don’t. Buy. A. House.

Please, please, please don’t do this. Don’t go and buy a house. There are people who win millions of dollars and then instantly go out and spend it all on a big fancy house. 

Don’t forget, a house is a lifelong money sink. And if you spend millions on a house, you can expect the property taxes on that house to be a pretty penny as well. 


This is actually where many lottery winners get tripped up. They spend all their money on the big house but then don’t have any money to handle the hefty upkeep that a giant mansion demands. Property taxes also go up every year so they just get more and more ornery as time passes.

Property taxes are going to be your downfall if you don’t think smart.


This is the meat-and-potatoes section because the choices you make in regards to investing your winnings is what will separate you from the other now-broke lottery winners. 

It can be tempting to spend a lot of your windfall, but a $2,000 trinket here and a $5,000 purchase there adds up quickly. 

Also remember that the amount that you win is quite variable. Not everyone is winning tens of millions of dollars. There are many lottery winners who win between $500,000 and $1.5 million. In the U.K. the upper bound on lottery winnings is about $20 million and no one has ever won that much. 


The point is that a lottery win may not even be that much money in the grand scheme of things. 

Think about it. If you hadn’t won the lottery, how much money would you have wanted to set aside for your retirement? 

A conservative estimate might be $30k/year for every year after you turn 65. If you live to be 90 years old then you need to sock away $75,000. But why would you think you need less money in retirement than you did when you were working? Well, you suddenly have all this free time and studies actually show that people end up spending more in retirement than they did during their working years. 

So you might end up needing $100-150k for retirement. Take a look at the lucky lottery winner in the photo above.  That is nearly half of your winnings!

For a lottery winner it is super, super important to take care of that windfall. 

Investing should be relatively simple because even a conservative dividend (2-4%) will yield you a good return, in the amount of absolute cash you gain. After all, 4% of a million dollars is $40,000. Not bad.

Let’s recap. So if you win a smaller amount of money in the lottery: it’s probably smart to invest all of it, collect the interest and just go about your life as normal. Avoid advertising so you can live in peace and allow the magic of compound interest to take sweet, sweet care of you.

To learn more, head on over to Wall Street Survivor.

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