Why do so many big lottery winners go broke after a while?

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Because they have no idea of what risk is and a single lump sum is worth a lot less than you think which is why cell phone companies will give you a cell phone for free so long as you agree to be with them for three years. Think of it this way, if you had just invested $466 a month into an IRA from the age of 20 till the age of 60, at a rate of 7% per annum, you would have $1,151,738.58 so why is it that everyone seems to retire without a penny saved? You're already a millionaire because of a modest job, you're just spending it all on Star Buck's coffee and financing new cars ( new car purchases over buying used cars for cash usually take out about $850,000 out of your retirement ) , the same would be true if the millions were to just land in your lap and the money would just be spent even more inefficiently then it is before the lottery....Show more

A lot of the same ways a lot of professional athletes go broke and the biggest reason is money mismanagement. That's everything from bad investments, not spending their money wisely by being thriftless, and getting bad advice from a business manager or no advice from a business manager. Buying 10 cars, opening up some kind of bad business, and being taken advantage of by immediate family, distant family, and friends can be enough to lose everything. There have been instances in the past where a lottery winner would carry around large amounts of cash (six figures) and what you're asking for when you do that is to get robbed and that's exactly what happened. Basically it comes down to spending your new money wisely and if you are smart the money will definitely last throughout your life but if you're not then it's very easy to lose most or all of the jackpot....Show more

It's easy really, a fairly simple answer would be.. When you get a million dollars you instantly begin spending it on big stuff, giving it out to friends and family who ask for it, paying off bills and such, people tend to lose track of there money spending and just begin to go wild with it. Before you know it, it's gone. It's just how most people are....Show more

I've never heard of any that go broke after a couple of years.

But mainly it's b/c they think what they win is enough to last forever (which it is), but they don't understand how to make it last forever....Show more

Because they are stupid -- and they have too many relative and friend who want there share of money..
I can see how someone who won one million can go broke -- but 10 million is another story...Show more