Winners Are Losers

Listen to this 'Talk of the Nation' topic

It's a universally appealing fantasy — you win the lottery and get to quit your job as a beleaguered, put-upon radio producer. Or whatever. But that fantasy rarely works out so well in real life. Lottery winners have a really hard time dealing with the sudden change — and often, the sudden windfall wrecks their life. Ed Ugel had the sad job of pouncing on these folks once things really got tough — he worked in the lump sum industry. His stories are really amazing — and he's got the goods on a system that he says allows nobody to win.

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My grandfather won the lottery years ago. A generous but not astronomical amount of money. It was paid out slowly overtime and a portion of the money was put aside by my father for each of his children in the stock market. I still have that money. It is my nest egg for retirement, and when I was younger I was able to take a modest amount out to finance an amazing year of travelling through Asia and Europe. The money has been a blessing. It certainly changed my life by providing me with new experiences and freeing me up from feeling like I would flounder if I did not know where the next paycheck was coming from.

Sent by Claudine | 3:12 PM | 1-8-2008

I agree with the oregon bar owner, the lottery is a tax for people who are bad at math.

Sent by seth | 3:27 PM | 1-8-2008

My favorite saying regarding lotteries: "Lotteries are a tax on people who are bad at math".

Sent by Michael MacIntosh | 3:28 PM | 1-8-2008

I happen to know a couple who live in our neighborhood won a big one from lottery! They are a very nice family, came from a less privileged neighborhood.
Our kids go to the same public school with them.
You have no idea how much "polishing" is going on among parents just to be their "friends" . It is almost disgusting to see that.
By the way this winner is from MI :)
Thanks for the great talk.
I enjoy listening your show, I am a big time NPR junky!

Sent by Sam | 3:30 PM | 1-8-2008

Has any state considered have a lottery game with many winners such as : say a 10 million jackpot is given out to say.1,000 $10,000 winners? Seems a state could sell even more tickets be setting up a game where thousands of medium size winners instead of one or two super prize winners?
Thanks

Sent by Larry Hansen | 3:35 PM | 1-8-2008

The biggest problem of the Nouveau Richie, self-disipline. Learning to say "No!", even to yourself.

Most people have no idea that 100 million is NOT limitless. It is indeed finite! Without proper planning, a fool will waste their money on temporary, rented, or impractical items which they get tired of.

Unlike the (lean days) past, where skimping on everything was not an option. You need to look at that windfall as "the last paycheck your ever going to get". (It probably is for most people that win.)

Don't make ANY sudden changes.
Don't quit your job (before you have private insurance).
Don't buy more house than you want to clean (maids are expensive).
Keep your spending in check (Money burned, never returns).
Don't do business with friends or family (they'll rob you blind).

Sent by Harold | 3:38 PM | 1-8-2008

In response to those that say that "Lotteries are a tax on those who are bad at math", I will agree only halfway...

If you use the 'Expected value theory" (taught in beginning stats classes), if the odds*payout> "price of the ticket", then you are mathematicalyly justified in buying a ticket... using this I only play when over $30M in in play (for picking 5 of 49 numbers plus a bonus) significantly larger for say, MegaMuillions)...

Having said that, I'd rather be in T-Bills as an investment strategy !

Sent by Tone97 | 4:13 PM | 1-8-2008

I have some relatives who buy lottery every week. i think it is a waste of money, i always try to convince them that the probability of winning lottery by buying a lottery ticket is almost same as finding a winning lottery tickets in the street by accident.

Sent by sherpa | 5:04 PM | 1-9-2008

A tax is a charge put on a government's citizens. It would make more sense to call the lotteries a charity (and I by now means call them that) because ultimately some of it ends up in education due to people giving up their money in a completely voluntary way. People that have addictions to these games are given decent enough resources on the web sites that promote them. I feel terrible sorrow for those people but they do not change my view of the games; which remain a chance to put your name in for something big even if it's likely to never pay off.

Sent by Derrick Jackson | 9:08 PM | 1-9-2008