how can there be that many stupid people?
or is that just a myth? maybe it just seems that way when you hear the ones that make the news.
The source behind that 70% statistic:
National Endowment for Financial Education.
?
Are they self-reporting in the study? 'Broke' to a lottery winner might mean "sh*t I'm down to my last 2 mil".
Also how are they selecting people to include in the study? Maybe 70% of those
lottery winners who have to make pennies doing online surveys are broke...
Christin K
It's true. When people win or gain large amounts of money they tend to think their problems are over. THAT is the myth--that money is an answer to problems--and then they overspend or buy things they will not be able to afford. Or they invest badly. Or they believe that having that large amount of money will be easy to manage. So yes--they do go broke.
D.E.B.S.
Don't forget that the vast majority of people playing the lottery in the first place aren't all that smart and especially not smart with money. If they were, they wouldn't be buying lottery tickets all the time.
Anonymous
Yes that's true. Many also end up divorced, friendless, miserable, alone and often alcoholic.
Most people are crappy money managers even without winning the lottery. What makes you think they will be better money managers once they have money? They now have a much larger responsibility, have no clue about taxes, probably don't know anything about investing, think their money will last forever and then there's all the emotional and social crap that comes with being instantly wealthy. It's a disaster for most people.
People quit their jobs, waste it on a (temporary) lavish lifestyle, impress their friends/family, travel, buy stuff that's expensive to maintain like boats and mansions, and buy depreciating assets like fancy cars. Does anyone keep their current lifestyle and invest their winnings for retirement? Nope.
Elaine M
It's true. Time Magazine followed up on over 100 winners, most had spent the money. Some had donated most of it.