The following is a guest post by Tino, a lottery blogger.
Lottery Booth (Photo credit: nep)
The pursuit of happiness. The American dream. It usually involves money. Lots of it. Yep, we associate money with a great life. Do you dream about being rich? I know I do. But, you know what P. Diddy says about money? He says, “mo money, mo problems.” He may be onto something. Winning the lottery, while a tempting dream of the get rich quick sect, is not a legitimate way to get rich. In fact, it’s really no different than gambling away your money in a casino, where the house almost always wins.
Have you ever heard of “sudden wealth syndrome?” Sudden wealth syndrome is a term coined by psychologists that describe some of the problems ordinary people experience when they suddenly become very wealthy. This can happen via numerous ways, like winning the lottery or receiving an inheritance. You’re probably thinking, “Ya right, how can having a lot of money cause problems?” It can. Here’s just a few ways that suddenly coming into a lot of money can cause problems in your life:
• Your friends and family become envious and start to distance themselves from you.
• Your fear of losing the money in bad investments paralyzes you.
• You feel guilty about having so much money when everyone else around you isn’t as rich.
Consider a lottery winner. Let’s say a man that is used to working for a living and just getting by wins the lottery. Suddenly, he’s rich. But his friends aren’t. His friends become jealous of him. Now he can’t hang around them like he used to. So he has to do other things. But what’s he supposed to do? He basically has to start a new life.
Now this lottery winner, without the support of what used to be his friends, has to find other ways to amuse himself. Being a new millionaire, that shouldn’t be too difficult. I mean, he’s got money, so the sky’s the limit. However, when the sky’s the limit, there will be temptations. What temptations might there be? Hmm, how about drugs, parties, women, and, worst of all, shady characters that try to separate you from your money.
It sounds like this new lottery winner might be experiencing sudden wealth syndrome. He’s spending money like crazy, blowing it on things like jewellery, houses, cars, booze, drugs – You name it, he’s throwing money at it. This goes on for a just a few short years until, one day, he wakes up and notices that all of the money’s gone. He’s bankrupt.
Bankrupt. Suddenly. How do you think someone who had all the money in the world would feel when he suddenly finds out that it’s all gone? I have a feeling that would be one enormous crash, like a drug addict running out of drugs. I mean, how could you live with yourself knowing that you had it all, blew it, and the wealth would never come back? P. Diddy might say, “No money, mo problems.” I would say, “sudden bankruptcy syndrome.”
Sudden bankruptcy syndrome is a term I came up with after reading about sudden wealth syndrome. I got to thinking, if people have trouble dealing with a sudden fortune that comes into their lives, I would reason that they would have even more trouble dealing with a fortune that they lost in just a short period of time. Here are just a few issues I think might come up after losing a fortune:
• Feelings of depression and worthlessness.
• Unable to work, knowing that the income from working can’t possibly cover your previous lifestyle.
• Feelings of guilt if you’ve had dependants that depended on your money.
What do you think? You think that something like “sudden bankruptcy syndrome” exists? Perhaps you don’t believe that someone can blow a fortune that quickly. You know what I would say to that? The lottery example that I used above wasn’t a fictional example. It actually happened. It happened to a man named Michael Carroll. Look him up. Michael won $15.4 million in 2002. By 2006, he was bankrupt and, soon after that, on welfare. He had no money, mo problems.
[Kevin] I think that this is sad whenever this happens. It also happens to young athletes and others who get surrounded by sharks, hungry for their money. Sometimes it takes a few rough bumps to learn some financial lessons, but it can be painful when these bumps are in the millions of dollars. What are your thoughts?
This was a guest post by Tino, a lottery blogger.
Great post!
Something like 50% of lottery winners declare bankruptcy 10 years after winning. 60% of NFL & NBA players also are broke 5 and 3 years after retiring (respectively).
Just because you make a lot of money or win/inherit a bunch of money doesn’t mean you’re capable of managing it.
In regards to the sudden bankruptcy syndrome: I do believe something like that exists. I don’t think you have to file bankruptcy to have that happen though. Finances is the #1 cause of stress in this country (depending on the time of the year) and one of the top causes of male suicide.
The feelings of depression, hopelessness, worthlessness, and being overwhelmed are there for most people in this country – whether they file bankruptcy or not.
I can think of about a hundred examples where this is true – from real people to rock stars, movie actors, etc. This is just a classic case of easy come – easy go. Almost anyone who worked and sweat for their money would never let this happen. When you win the lotto or get paid unreal sums of money, I’m not sure if you ever really comprehend how much money you’re working with.
I’m sure this condition exists although it’s rare as the percentage of people who are capable of experiencing this are slim. We’re talking lottery winners and outliers like athletes and rock stars. I’m sure however it’s easy to mismanage an extreme amount of money as it’s easy to develop a unrealistic perception of money, work and reward. If you’re not grinding to get that dollar, you can’t understand the true worth of money. It’s even more unfortunate for people who once worked hard and then got wrapped up in a cycle where money was something that was just there by a highly lucky circumstance like winning the lottery.