Susan Bradley,
certified financial planner
and sudden money
expert, on winning the
lottery — "One of the
first things a lottery
winner should do in a
perfect world is not claim
the ticket in their name.
You can form a blind
trust, and you can have
the lottery winnings put
into the trust."
Easy Come Easy Go: Be Careful with your Winnings
"Winning the lottery isn't always what it's cracked up to be," says Evelyn Adams, who won
the New Jersey lottery not just once but twice (1985, 1986) to the tune of $5.4 million.
Today, the money is gone and Adams lives in a trailer.
"I won the American dream but I lost it, too. It was a very hard fall. It's called rock bottom,"
says Adams. "Everybody wanted my money. Everybody had their hand out. I never learned
one simple word in the English language -- 'No.' I wish I had the chance to do it all over
again. I'd be much smarter about it now," says Adams, who also lost money at the slot
machines in Atlantic City.
"I was a big time gambler," admits Adams. "I didn't drop a million dollars, but it was a lot of
money. I made mistakes, some I regret, some I don't. I'm human. I can't go back now so I
just go forward, one step at a time."
Do Not Spend It Before You Get It
These sad-but-true tales are not uncommon, experts say. "For many people, sudden
money can cause disaster," says Susan Bradley, a certified financial planner in Palm
Beach, Fla., and founder of the Sudden Money Institute, a resource center for new-money
recipients and their advisers.
"In our culture, there is a widely held belief that money solves problems. People think if
they had more money, their troubles would be over. When a family receives sudden
money, they frequently learn that money can cause as many problems as it solves," she
says.
Craig Wallace, a senior funding officer for a company that buys lottery annuity payments in
exchange for lump sums, agrees.
"Going broke is a common malady, particularly with the smaller winners. Say you've won $1
million. What you've really won is a promise to be paid $50,000 a year. People win and
they think they're millionaires. They go out and buy houses and cars and before they know
it, they're in way over their heads," he says.
Here's what the experts have to say.
If you win, take the lump sum, says Craig Wallace, a senior funding officer for a company
that buys lottery annuity payments in exchange for lump sums.
"People are far better off taking a lump sum and investing it than taking the annuity. It's
bad for my business, but it is definitely the way to go.
"If you choose the annuity, what you're choosing is a fixed amount of money a year for 20,
25, even 30 years down the road. In some states the money will escalate somewhat. For
example, in Colorado, the money grows at 3.7 percent a year on a 25-year payout. In
Florida, the payments are stretched out for 30 years, that's the worst in the country," he
says.
"You are subject to a change in the tax rate. You know what the tax consequences are
now, but you don't know how it will change. The value of your money decreases over time. I
wouldn't take that bet."
"Take the lump sum. That's definitely the way to go. You're better off investing the money
and taking charge of your own destiny."
How to Find a Financial Adviser
* Interview at least two to three financial planners, preferably a CPA or CFP, before
deciding who to work with.
* Ask a lot of questions of the person you are about to entrust with your assets. (How many
financial plans have they prepared, how are they paid, etc.)
* Get a list of three professionals who have worked with the planner. Call the professionals
and ask about the planner.
* Once you make your choice, spend time getting to know your planner. Be certain he or
she has committed both orally and in writing to what you have asked of him or her. CPAs
and attorneys call this an "engagement letter." If the planner is too busy to spend much
time with you or doesn't use a formal questionnaire to gather information from you, walk out
of the office.
* Don't rely totally on the planner. Learn how to budget your money. One good tool is the
groundbreaking book, "The Millionaire Next Door," by Thomas J. Stanley and William D.
Danko.
http://www.bankrate.com/brm/news/advice/20041108b1.asp
LOTTO RANDOM NUMBER GENERATOR
"Winning the lottery isn't always what it's cracked up to be," says Evelyn Adams, who won
the New Jersey lottery not just once but twice (1985, 1986) to the tune of $5.4 million.
Today, the money is gone and Adams lives in a trailer.
"I won the American dream but I lost it, too. It was a very hard fall. It's called rock bottom,"
says Adams. "Everybody wanted my money. Everybody had their hand out. I never learned
one simple word in the English language -- 'No.' I wish I had the chance to do it all over
again. I'd be much smarter about it now," says Adams, who also lost money at the slot
machines in Atlantic City.
"I was a big time gambler," admits Adams. "I didn't drop a million dollars, but it was a lot of
money. I made mistakes, some I regret, some I don't. I'm human. I can't go back now so I
just go forward, one step at a time."
Do Not Spend It Before You Get It
These sad-but-true tales are not uncommon, experts say. "For many people, sudden
money can cause disaster," says Susan Bradley, a certified financial planner in Palm
Beach, Fla., and founder of the Sudden Money Institute, a resource center for new-money
recipients and their advisers.
"In our culture, there is a widely held belief that money solves problems. People think if
they had more money, their troubles would be over. When a family receives sudden
money, they frequently learn that money can cause as many problems as it solves," she
says.
Craig Wallace, a senior funding officer for a company that buys lottery annuity payments in
exchange for lump sums, agrees.
"Going broke is a common malady, particularly with the smaller winners. Say you've won $1
million. What you've really won is a promise to be paid $50,000 a year. People win and
they think they're millionaires. They go out and buy houses and cars and before they know
it, they're in way over their heads," he says.
Here's what the experts have to say.
If you win, take the lump sum, says Craig Wallace, a senior funding officer for a company
that buys lottery annuity payments in exchange for lump sums.
"People are far better off taking a lump sum and investing it than taking the annuity. It's
bad for my business, but it is definitely the way to go.
"If you choose the annuity, what you're choosing is a fixed amount of money a year for 20,
25, even 30 years down the road. In some states the money will escalate somewhat. For
example, in Colorado, the money grows at 3.7 percent a year on a 25-year payout. In
Florida, the payments are stretched out for 30 years, that's the worst in the country," he
says.
"You are subject to a change in the tax rate. You know what the tax consequences are
now, but you don't know how it will change. The value of your money decreases over time. I
wouldn't take that bet."
"Take the lump sum. That's definitely the way to go. You're better off investing the money
and taking charge of your own destiny."
How to Find a Financial Adviser
* Interview at least two to three financial planners, preferably a CPA or CFP, before
deciding who to work with.
* Ask a lot of questions of the person you are about to entrust with your assets. (How many
financial plans have they prepared, how are they paid, etc.)
* Get a list of three professionals who have worked with the planner. Call the professionals
and ask about the planner.
* Once you make your choice, spend time getting to know your planner. Be certain he or
she has committed both orally and in writing to what you have asked of him or her. CPAs
and attorneys call this an "engagement letter." If the planner is too busy to spend much
time with you or doesn't use a formal questionnaire to gather information from you, walk out
of the office.
* Don't rely totally on the planner. Learn how to budget your money. One good tool is the
groundbreaking book, "The Millionaire Next Door," by Thomas J. Stanley and William D.
Danko.
http://www.bankrate.com/brm/news/advice/20041108b1.asp
LOTTO RANDOM NUMBER GENERATOR
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helpful and informative material on the subjects addressed. It is written with the
understanding that the author(s) is (are) not engaged in rendering any other kind of
professional service(s). The reader should consult a competent professional before
adopting any of the suggestions. The author(s) specifically disclaim all responsibility for
any liability, loss, or risk, personal or otherwise, which is incurred as a consequence,
directly or indirectly, of the use and application of any of the contents of this site.
helpful and informative material on the subjects addressed. It is written with the
understanding that the author(s) is (are) not engaged in rendering any other kind of
professional service(s). The reader should consult a competent professional before
adopting any of the suggestions. The author(s) specifically disclaim all responsibility for
any liability, loss, or risk, personal or otherwise, which is incurred as a consequence,
directly or indirectly, of the use and application of any of the contents of this site.