The True Story Behind the $314 Million “Powerball Curse”
Jack Whittaker was already a millionaire when he won the $314.9 million Powerball jackpot in 2002.
It was the largest jackpot ever won by a single winning ticket in the history of the American lottery.
And with a pre-win net worth of $17 million, Jack was one of the richest men in history to bank a jackpot win.
But if you’re feeling a little envious of Jack… don’t.
It’s well documented that most lotto winners (about 70%) end up flat broke within five years of their big win.
And while Jack had the advantage of knowing how to manage a fortune of millions of dollars… he fell into all the same pitfalls.
He started off with good intentions, donating over $14 million to charity. But it wasn’t long before he started drinking heavily and losing millions of dollars at casinos.
He got arrested for drunk driving and was sued for assault. And instead of investing his money, he would stash hundreds of thousands of dollars in his car.
One lucky thief made off with $545,000 when they broke into his car outside a West Virginia strip club.
Just four years after his big win, Jack had lost all his money — and his family was beset with legal trouble and personal tragedy.
Jack’s granddaughter, who he promised to spoil with his winnings, died of a drug overdose. And her mother, Jack’s daughter, died just five years later.
“My granddaughter is dead because of the money,” he told ABC. “You know, my wife had said she wished that she had torn the ticket up. Well, I wish that we had torn the ticket up, too… I don’t like the hard heart I’ve got. I don’t like what I’ve become.”
Jack, like many others, believes he was the victim of something called the “Powerball Curse.”
But the truth is simpler than that.
He simply fell into the same psychological trap we all do when we get a big windfall.
We forget the value of money.
Just imagine if someone dumped $300 million on your kitchen table tomorrow morning. Would your first instinct be to sit down and start budgeting?
Probably not.
When you just earned more money than most folks do in a lifetime, it’s hard to imagine a time when all that money will be gone.
So folks quit their jobs and start living like celebrities, buying houses and luxury cars, throwing their money around like there’s an infinite supply of it.
And then, before you know it… it’s all gone.
It happens to most lotto winners. And about a third of folks who receive a big inheritance.
But it doesn’t have to happen to you.
Whether it’s millions of dollars or just a few thousand, a cash windfall is an incredible opportunity to bolster your finances.
You can use it to make yourself more comfortable, protect yourself from financial crisis and make sure it lasts… if you know how.
Read on for my top five tips for managing any future cash windfall the right way.
- Supercharge your emergency fund
Your emergency fund is your last line of defense.
If you lose your income — or it becomes temporarily unavailable to you — you’ll need a backup to pay the bills, feed your family and protect yourself from financial ruin.
I usually recommend an emergency fund of three–six months’ income. But with a large windfall, you could easily expand that to one to two years’ worth.
- Splurge… on debt
Instead of splurging on ritzy vacation homes and talking refrigerators, use your windfall to free yourself from the shackles of debt.
Start by paying off your high-interest debts — like personal loans or credit cards — before moving on to low-interest debt.
If you’re still in debt, you’re never going to be financially secure, no matter how much money you have.
- Don’t forget about your retirement
Keep investing in some form of retirement fund, whether that be your 401(k), an IRA or some low-risk index funds.
With a big windfall like this, you can afford to invest more aggressively. But that doesn’t mean you should neglect your retirement fund. Maybe you won’t need it… but if a crisis wipes out the rest of your wealth, you’ll be glad you have it.
- Keep working
This is the biggest pitfall for lotto winners.
When you stop working, you don’t just lose an income — you lose your sense of purpose.
Then you end up buying boats and cars, doing drugs and drinking to excess just to escape the boredom of total luxury.
And as we all know, that path leads to bankruptcy.
Now, I’m not saying you have to take on a crummy 9-to-5. Far from it.
Instead, use this opportunity to pursue your passion.
If you always wanted to be an artist but the pay wouldn’t support your lifestyle… now’s your chance.
Play music. Sell artisanal pizzas at the local market. Start a small business.
- Buy physical silver and gold
How do you invest your wealth when the next big financial crisis could be around the corner?
A store of physical silver and gold can’t be wiped out by a computer error… It will increase in value with the market value of silver and gold… And it’s perfect for trading in a disaster scenario when your cash and credit in the bank might be unavailable.
As always, we welcome feedback from our readers. If you agree, disagree or have any financial horror stories of your own, you can email me right here.
All the best,
Owen Sullivan
Editor, Money & Crisis
The post The True Story Behind the $314 Million “Powerball Curse” appeared first on Laissez Faire.
Source: http://freedombunker.com/2018/04/20/the-true-story-behind-the-314-million-powerball-curse/
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