Shocking Revelation About Big Lottery Winners

wallet_burning_money_hg_wht.gifI read with amazement a story by Gary Simpson this morning. It concerned a couple in their early 30’s from Western Australia who won AUD $793,151.87.

Their lotto dream was realized just two years ago. Lucky people huh?

OK. Nothing too amazing about that – so far. Reading on I was shocked to learn that this story is news now because, despite their massive windfall, this couple had never stopped claiming social security benefits. Greedy huh?

That welfare money is meant to be available to disadvantaged people who are in financial difficulty. Essentially it is “survival” money.

But the story gets worse, much worse…This couple spent ALL that money in just seven weeks! Gone. Vanished. Seven weeks! It hardly seems possible. So, what does that tell you?

The first thing that struck me was how utterly irresponsible this pair was. How do you spend $113,307.41 each week for seven weeks? I have great difficulty comprehending that.

What if this pair had spent just the $93,151.87 having “fun” and put the $700,000 into an interest bearing term deposit for three months at 6.00% interest while they got some decent financial advice? At the end of the three months they would have accumulated another $10,500 to play with (less tax, of course).

So many stories abound like this – people with no financial skills suddenly find themselves in possession of a large inheritance or a lottery win and zap! Just like these two, it is gone. How would you have handled it?

For anybody wanting to learn basic financial skills “The Richest Man in Babylon” by George S Clason is a great start. Had these people bothered to read such a book then they would still have a significant chunk of that money left. Maybe they would have even more. As it is they have nothing to show for it and there is a strong possibility of either gaol or massive fines for defrauding the Government.

It pays to educate yourself.

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11 Responses

  1. zakman says:

    QUOTE How do you spend $113,307.41 each week for seven weeks? /UNQUOTE

    Britney Spears ought to be able to answer that one. On a ‘normal’ weekend she allegedly spends over $100,000.00.

    But then of course not every one of us is Britney and not every one will be able to spend like that for seven weeks in a row.

    I, for one, might find it hard to spend $100,000 in a week — simply because (i) my mind is not conditioned to ‘get rid of the money’ (ii) I just wouldn’t know where to spend it and (iii) I wouldn’t have that kinda bread anyway…. haha.

    Well, even if I did have it, I’d probably spend $40,000 on booze, $40,000 on women, $25,000 gambling, and the rest I’d spend foolishly. (Courtesy: http://www.fortunewatch.com)

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  3. Ariel says:

    Unbelivable. ❗

  4. The thing is, the people that are playing the lottery(regularly) are irresponsible in the first place. Why would anyone waste money on a contest with such horrible odds? So it never surprises me when lottery winners spend all of their money gone. But as far as collect the social security, at least in America, we pay into the system, so nothing is going to prevent me from collecting even if I am worth billions.

  5. Robin Bal says:

    Thanks for your comments guys.

    Adam I agree that people who play and win lottery are largely irresponsible. Reminds me of what my dad said, “fools and money part company very quickly”.

    I liked the way you would have spent that amount Zakman. 😆 .

  6. Brian Thompson says:

    I would have called you to help me invest the money and generate a steady income. 😉

    Honestly I cant imagine all that money being blown up in a few weeks. I don’t think I could have spent that so fast, no matter how hard I tried.

    Regards.

  7. Robin Bal says:

    Thanks Brian.I myself would have used the money to generate a steady and secure income.

    Cheers.

  8. Elaine says:

    Adam makes a good point: the lottery is one of the worst bets you can make. But still…

    How about taxes? I’m sure plenty of that money went to pay taxes. Especially in Australia.

    And perhaps they used loans to get the money sooner. There are some real sleazy lenders who loan on things like lottery winnings, inheritance, and legal settlements. They can have outrageous interest rates up to 30% or so! And they prey on uneducated people.

  9. Craig says:

    Not good odds to win the lottery anywhere…but, hey, you can’t win if you don’t play.

    Taxes may not be a huge problem (although definitely should be a consideration). Tax laws in the US state that lottery winnings are taxable, but in some countries (Canada at least) they are not. The interest earned on the winnings are taxable, but not the principal. Maybe this is similar to the Australian system?

  10. YourMaster says:

    My first post was deleted by the website owner. I guess he didn’t like being told that he was a tool. But I will re-post my comments to prove that freedom of speech is persistent (and by freedom of speech, I mean my right to say something you don’t agree with). Here is what I had said:

    “With no other information, you automatically assume that they blew the money frivolously. Did it ever occur to you that they spent all that money on paying off debt? Probably the first thing they paid was their mortgage, which might take a healthy chunk off of that jackpot. Then paid off their cars and credit cards, then dumped the rest into college funds for their grandkids. And just like that, it’s gone! And they probably still need social security just to live day to day!”

  1. March 29, 2007

    […] read the author, Robin, latest blog post about ‘Shocking Revelation About Big Lottery Winners‘ and that kinda struck a chord with mine. It reminds me of the entry I wrote about […]

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