I 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.