If you won $5 million dollars from the lottery what would you do with the money? Would you buy a house? Pay off all your debt? Buy a new car for your mom? Donate to charity? Start a business?
Winning the lottery is something many people fantasize about in the hopes that if it did happen, all of their financial and personal problems would be solved. Lottery winners who have millions of dollars shouldn’t have to struggle anymore right?
The main issue with playing the lottery other than spending money repeatedly on tickets throughout the year, is believing that the prize money will only have a positive impact on your life and eliminate any problem you’ve ever had.
Various previous lottery winners would agree that the grass is not always greener on the other side.
“Everybody dreams of winning money, but nobody realizes the nightmares that come out of the woodwork, or the problems,” said William Post, a 1988 lottery winner who won $16.2 million in the Pennsylvania lottery.
Post claimed to have only $2.46 in his bank account on the day he won the money and was struggling to make ends meet with his disability checks. He spent recklessly after he won the lottery and fell victim to crime, bankruptcy and other financial tragedies. The money he won was lost or spent within 3 short months.
Janite Lee won $18 million from the lottery in 1993 and decided to contribute most of her earnings to her philanthropic efforts. She was widely recognized by popular figures like Bill Clinton and Al Gore and her donations helped fund the Washington University School of Law. Despite her success, Lee still mismanaged her earnings and filed for Chapter 7 bankruptcy in 2001 with less than $700 to her name and $2.5 million in debt.
After winning $3 million in the lottery in England in 2003, Carrie Rogers attempted suicide twice after facing bankruptcy in 2009 and became extremely depressed. In an interview with Daily Mail, she stated: “I just wanted to make people happy by spending money on them. But it hasn’t made me happy. It just made me anxious that people are only after me for my money…My life is in shambles and hopefully now that the money is all gone, I can find some happiness.”
These three lottery winners are just a few that have come to regret winning such a large amount of money. While the lottery is not ‘bad’ and probably does help produce some good and improve many people’s lives, it’s not the only answer to financial success. Plus, it’s not realistic to only consider the positive impact and ignore the negative impact.
You can buy a house in cash, go on a vacation for a month, retire early, or give yourself a shopping spree without winning money from someone else. When you follow some of these steps to help you work smart and manage your finances properly, you have the potential to earn more and enjoy a prosperous life without all the drama.
Here are three key elements to financial success and independence.
1. Spend Less than you Earn and Invest the Difference
Living below your means is the absolute key element to achieving financial independence. If you spend every dollar you earn, you will never have enough to save or invest so you can get ahead financially. By investing and letting compound interest run its course, you can amass $1 million dollars on your own without lottery wins.
2. Work Smart and Establish Passive Streams of Income
Working hard is no doubt the key to success, but the big difference between the rich and the poor is that wealthy people have multiple streams of income and establish passive income as well. Trading your time for an hourly rate will only get you so far.
If you are passionate about a cause or service and have an entrepreneurial mindset, start your own business or create a product that you can sell. You should also build up your investments to earn a solid return for your each year.
3. Realize that you Can Have Anything, but you Can’t Have Everything
Even Beyoncé and Jay-Z can’t have everything. They just had to move out of their house that they were renting in California because it was up for sale. Find out what your passion is and what makes you happy and then prioritize that goal. If it’s a big house, work toward purchasing it. If it’s traveling, save up and go for it.
At the same time, realize that you can’t have it all. Most times you will need to pick what you are most passionate about and spend money on that while refraining from spending money in other areas of your life. The lottery winners mentioned above figured that out the hard way.
Chonce is a freelance writer who’s obsessed with frugality and passionate about helping others increase their savings rate, eliminate debt, and work toward financial stability. She chronicles her journey to becoming debt-free on her blog, mydebtepiphany.com.
