Choosing how to receive your prize money after you win the lottery isn’t all that hard. You can pick a lottery lump sum payout, and get all your money at once, or you can choose a lottery annuity settlement, and get a bunch of smaller, annual, lottery payments.
Choosing how to spend your money might seem easy, too, but you should at least be a bit careful. Reckless spending of your lump sum or your annuity is never good. Just ask these lottery winners.
Not Investing It. – Sharon Tirabassi is the sort of person you like to hear about winning the lottery. In 2004, the single mother of six who’d once been on welfare won $10,569,00.10 in the Canadian lottery. However, the story goes sour, because she did not exactly invest it wisely. Instead, she wound up blowing her money on fast cars, nice clothes, a big house, huge parties, exotic trips, loans to friends, and handouts to family. In less than 10 years, Tirabassi went back to renting, working part-time, and riding the bus. Fortunately, she did put some of the money into trusts for her kids, which they’ll be able to claim when they turn 26.
Never Paying Your Debt. – In 1993, Suzanne Mullins won the lottery, and choose to get an annuity over the lump sum. However, she soon wound up in debt, and used her future lottery payments as collateral for a $200,000 loan. Then, she sold her annuity, and never paid the debt back. The loan company filed a suit against her, and won a cool $154 million settlement.
Gambling It Away. – It makes sense. If you win the lottery, why not make the most out of your luck and take a trip to Atlantic City? Maybe you’ll be able to double your new fortune, or — if you’re like Evelyn Adams, who won the lottery in 1985 and 1986 — then you’ll blow it all away and wind up living in a trailer park.
If you know of any other dumb things people have done after winning the lottery, feel free to share in the comments.