I have no interest in winning the lottery. This is a fairly recent development. I’ve never bought a lottery ticket, and have never had a desire to play the lottery for multiple reasons, but that’s not what I’m talking about. Even if you took all of the risk out of the process and literally handed me a winning ticket, I would politely decline. Here’s why.
The Negative Aspects of Winning the Lottery
1. More money than you know what to do with
The first part of that statement is fantastic and I don’t blame you for wanting it. It’s the second part that gets people in trouble. “More money” is fine and dandy, but “more money than you know what to do with” is a problem.
We all believe that we’re smart enough to handle hundreds of millions of dollars. After all, how hard can it be? But, if we can’t handle our current income, the situation won’t end up any better with an extra million in your pocket. At first it will, but if we spend too much now, we’ll spend too much later too. The principles of personal finance remain the same no matter which tax bracket you belong to.
And that’s the problem that so many lottery winners run into. They couldn’t keep track of $40,000, but now they expect to keep track of $40,000,000 dollars.
But, if this were the only problem with winning the lotto, I would be just fine. I know how to handle my finances and would feel very capable of handling much more. That’s not my issue.
2. Damages relationships
You can figure out how to successfully handle a sudden influx of cash by seeking education and proper guidance, but you can’t fix this. Human nature is human nature and there’s nothing you can do about it.
We would all like to believe that our best intentions would be understood by all of our friends, family, co-workers, and acquaintances, but it’s unlikely. Call me cynical, but I prefer to see it as realistic…and inevitable. This certainly isn’t a knock on my family or friends. They’re fantastic and I believe that if anyone could have a level head about that much money, they could. But, there’s more to it than that. I’ll explain in a minute.
One of the biggest problems with winning the lottery is that it’s public – very public. That means that everyone knows how much money you won. You can’t keep it a secret and make your gifts and purchases anonymous. There’s no hiding. This also makes you a prime target for thieves and hooligans. That kind of public wealth doesn’t go unnoticed.
The other giant problem is that it wasn’t earned. You lucked into it. You bought a ticket and it just happened. And that’s why everyone that has ever known you believes that they deserve a portion of your winnings. They earned it just as much as you did – share the wealth!
If you earn an abundant income by starting a successful business or suffering through 8-10 years of college, people look at you a little bit differently. Yes, of course, they would love a hand-out, but fewer people expect it because it’s your money; you earned it. That’s not the case when you win the lottery.
Because the money isn’t earned and EVERYONE knows about it, you’re bound to make enemies. There’s no way around it.
Let’s say you win $20 million. Now what?
Scenario #1: You buy your parents a home, a Lexus, a safari in Africa, and give them $1 million. They’ve put up with a lot over the years, haven’t they?
You buy each of your siblings a new car, pay off their credit card debt, and set up college scholarships for each of their kids.
You finance the coffee shop that your best friend Joe has always wanted and give him $100,000 to have a good time with.
You give $50,000 to each of your other close friends and set up similar deals with your grandparents, uncles and aunts, and cousins.
You’ve blown through an awful lot of money, but it’s OK because you still have plenty left.
Now you have to decide where to draw the line. You gave money to each of your cousins, but what about your 2nd cousins and other relatives that you haven’t seen for a long time? Do you realize that you forgot to give cash to your siblings? Yes, you gave them scholarships and paid off their debt, but it hurt them a bit when they saw Joe get $100,000 and they didn’t get anything. Plus, your sister Sarah doesn’t need the money as much as your brother Mark and his 6 kids. Mark’s wondering why you gave them the same amount?
You gave money to all of your “close” friends, but where do you stop? Does so-and-so make the cut? And if they don’t make the cut, but someone else does, how do you think that’s going to affect your relationship? If you’re going to give money away…and who isn’t?…you’re going to have to draw a line somewhere and EVERYONE will be watching.
Let’s not pretend that jealousy wouldn’t exist. That kind of money changes things. A lottery winner is forever seen as “The Lottery Winner” for the rest of their lives. They are known for their money and I’m sure even their friends have a hard time looking past it when their own finances are less than perfect.
And we haven’t even talked about all of the people in your community that will be asking for money. Do you know how many people are struggling right now? Do you know how many letters the average lottery winner receives from people they know and don’t know alike?
Scenario #2: You announce that only your more immediate family like your siblings and parents will receive substantial gifts in order to avoid scenario #1. You might think that you’re doing the sensible thing by trying to maintain a sense of normalcy among your friends and family, but, right now, that’s not what they want. You want normalcy, but that’s only because you have a fat bank account right now. They don’t want normalcy. They want help. They want excitement. They want money. Again, people don’t see it as your money. When you win the lottery, there’s a good chance that the people around you see it as our money since you didn’t earn it in the first place.
So, your immediate family understands your decision and supports you, but does your best friend Joe? Or your Uncle Frank? It’s not that they’re bad people. They just know that you have the ability to help them and they feel like they would do the same for you.
Scenario #3: You could decide to keep it all for yourself and just explain that you don’t want to hurt anyone’s feelings. That’s fine, but prepare to move and find new friends that don’t know your story.
And that’s really what it comes down to. That’s why I don’t want to want to win. Too much drama. If I won I could afford to travel, live a particular lifestyle, and give millions of dollars away to those who need it. But, I’ll have to go into witness protection and find all new friends. My current relationships will forever change. Even if it doesn’t end up nearly this dramatic, I will always be known as the lottery winner instead of the great husband, dad, son, or friend. It’s not worth it.