Supposedly studies show 70% of lottery winners go broke within a few years; is that really true?

I can see that happening,money spent is money gone.

So unless they invest the winning and make a revenue stream,they will run out.

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...

Many winners lose it all the first few weeks.  Some are even stupid enough to end up owing huge amount on money.

Those that do so were poor money managers before they won and they are also the ones that take "cash option" instead of "annual payments"

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. 

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.

Stupid? Maybe that is the right word. I know that the first time i gained wealth, i got a big head, thought the rest of my life would be like this, got a bit arrogant and snobby too I think.  Then reality hit, that first time I lost it, it was very humbling. But we rebuilt, this time investing, staying humble and such, being careful not to raise expenses above the low base level, learned that from the first go around. Then, all gone again, in a large part to those brokers those were not held accountable by Obama.  Use the little guys wealth to tide over the larger losses, proved in court, forced to shut down, but no reparations, no one went to jail, the shut down was more of changing names then anything else, yes, I'm very bitter that no one payed. 100's of thousands gone, retirement wiped out along with college funds. Luckily I had also set up small trusts for their college too. At least, that was something.

All I need is $1.5M and I'm set for retirement, early.

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.

It's true.  Time Magazine followed up on over 100 winners, most had spent the money.  Some had donated most of it.